Am I paying too much tax?!

Pork89

Hi there,

I finally recieved my pay cheque from work today for my October hours. I know from signing my timesheets off in the office that my final gross pay for that month would be £950.

The cheque I have just recieved is for £666.87! This is FAR less than what I expected!! (£283.13 tax payment)

I am earning a lot more this year, I earned a total of £1200 last year and wasn't taxed at all, with the exception of a few quid on NI tax each month.

Before phoning work, I wanted to get some advice and do some reasearch to find out where I stand.

There is no way I will exceed the £34,800 tax limit, so I should be paying the basic rate of 20%. This means my tax payable would be £190 for the month, not the £283.13 I've just paid!

I've calculated that the tax that I am paying is at 29.8%, what the hell rate is this?! (950 / 283 * 100).

I don't know what my tax code is this year as I haven't phoned the office about this problem yet as (as mentioned earlier) I wanted to get a little bit of reasearch done first!

It would be good if anyone could perhaps shed some light on what is going on, and what I can do to fix this!

Many many thanks! :-)

tinkerbell84

What does your payslip say? It should say what tax code is being used.

20% tax, plus 10ish % NI would be around 29.8% deductions

Sounds like you are on BR tax code. Did you give a P45/fill out a P46 when you started?

Pork89

I'm guessing, that as I earned £950 in my first month of work this tax year the taxman will estimate my earnings in a similar way to the website below:

http://www.listentotaxman.com/index.php?c=1&yr=2008&student=1&age=0&add=0&code=&pension=0&time=12&ingr=950&vw[]=yr&vw[]=mth&vw[]=wk

So surely, as the website has calculated, I should only be paying around about £90 per month on tax?

Pork89

tinkerbell84 wrote: »

What does your payslip say? It should say what tax code is being used.

20% tax, plus 10ish % NI would be around 29.8% deductions

Sounds like you are on BR tax code. Did you give a P45/fill out a P46 when you started?

They haven't actually sent me a single payslip yet, which is annoying. As they lost my original cheque for October, all I have recieved to date is the replacement cheque that arrived this morning, which does not state my tax code. :-(

Earlier this year I recieved my P45 which stated that my "tax code at leaving date" was 543L.

Thinking about it, why did they even send me a P45? I wasn't leaving the job, and I'm working for them again this year!

Oops, reading my P45, it says "Give this form (parts 2 and 3) to your new employer, or you will have tax deducted using the emergency code and may pay too much tax".

Argh, is this perhaps where I've gone wrong? I work part time at the university I study at you see.. Last year we were both in the understanding that I would be working again the next academic year, and I even asked again this year if they needed any details and they said no!

tinkerbell84

There's your problem then.

Pork89

I'm hoping people are still looking at this thread, as I have another question:

This tax year I will only be working for 7 months, earning on average no more than £700 per month.

Because of this, I predict it is VERY unlikely that I will breach the £6035 lower limit. Is it possible to tell Inland Revenue this, and to change to my old tax code of 543L? Or am I expected to stay on the base rate of 20%, and then get a tax refund at the end of this tax year?

tinkerbell84

The 543L tax code is now 603L (can you spot the pattern?)

And no, you can't. You need to send your P60(s) to the tax office at the end of the year and they'll refund any over paid tax.

How is your average wage £700 per month if you've just been paid £900+?

Pork89

That's what I estimate my earnings will be, I worked far more hours than I usually would in October, so I earned £950. In November I worked slightly less and only earned £800.

This month, I've worked even less, and will only be getting around £600! January I have exams, so I doubt I will be working at all.

So, on average, I don't think I will be earning more than £700 a month.

Thanks for all of your help tinkerbell! I guess I'll just have to be slightly out-of-pocket each month untill I get my tax refund!

Damn tax man...

tinkerbell84

Pork89 wrote: »

Damn tax man...

Following the instructions on the P45 would have minimised the problems

jem16

Pork89 wrote: »

I'm hoping people are still looking at this thread, as I have another question:

This tax year I will only be working for 7 months, earning on average no more than £700 per month.

Because of this, I predict it is VERY unlikely that I will breach the £6035 lower limit. Is it possible to tell Inland Revenue this, and to change to my old tax code of 543L? Or am I expected to stay on the base rate of 20%, and then get a tax refund at the end of this tax year?

If you hand in your P45 now as you should have done earlier, your tax code will be amended to the correct on of 603L. If this code is applied by end of March at the latest you will get any refund due automatically.

The longer you wait until doing this the more likely you are to have to apply for a refund after the end of the tax year.