New Income Tax Checker

polymaff

JohnMRG wrote: »

Hello,
For many years, I have been aware that in order to calculate my PAYE correctly, I need to add £9 to what is usually quoted as my Personal Allowance.
For example, last tax year, my tax code was 1150L suggesting an allowance of £11,500, but to get my calculations right, it seems I should use the value £11,509.
This seems to have been the case as long as I can remember.
I have just always assumed this, but I have two questions:
1) Am I actually right here, or is something else going on that I'm not aware of?
2) If this IS right, why don't they quote the correct value (e.g. £11,509) :doh:

https://forums.moneysavingexpert.com/showpost.php?p=73655744&postcount=123

Dazed_and_confused

For many years, I have been aware that in order to calculate my PAYE correctly, I need to add £9 to what is usually quoted as my Personal Allowance.

For many years you've been under a misapprehension.

chrisbur explains it very well.

Domwhite123

Hi I’m after some advice I am thinking of becoming a self employed cleaner part time I also have a part time job as a payee (employed) cleaner. So my income will be £11880 a year with both which just takes me over the personal allowance for paying tax . I used the tax calculator and it say I would only pay £4 in tax for the year and £415 national insurance. But am I right in thinking until I have earnt over £1000 from my self employment I don’t have to declare it . It would mean I can do 9 weeks to see if it works out before setting myself up. Also is there a way of paying national insurance so you pay weekly/monthly.
I am very new to this so any advice would be helpful.
Many thanks

polymaff

Domwhite123 wrote: »

Hi I’m after some advice I am thinking of becoming a self employed cleaner part time I also have a part time job as a payee (employed) cleaner. So my income will be £11880 a year with both which just takes me over the personal allowance for paying tax . I used the tax calculator and it say I would only pay £4 in tax for the year and £415 national insurance. But am I right in thinking until I have earnt over £1000 from my self employment I don’t have to declare it . It would mean I can do 9 weeks to see if it works out before setting myself up. Also is there a way of paying national insurance so you pay weekly/monthly.
I am very new to this so any advice would be helpful.
Many thanks

To be clear, not earnt, but received gross income, i.e. without accounting for expenses.

shds87ydshiun

Hello,

Does anyone know if/when this amazing tool will be updated for the 2019/20 year?

Thanks, and keep up with the great work MSE

RG2015

chrisbur wrote: »

Putting a 9 on the end of your tax code gives a close approximation of the figure used to calculate your tax deductions.The actual figure that is taken from tables A of the HMRC Pay Adjustment Tables for tax code 1150 is 11509.68 for weekly paid and 11509.08 for monthly paid. These tables can be seen here....
https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/503683/Tax_Tables_A__2016-17__12_15.pdf

Why is the actual figure taken from tables rather than calculating the exact amount?

molerat

RG2015 wrote: »

Why is the actual figure taken from tables rather than calculating the exact amount?

Because PAYE does not use the exact amount but the amount from the tax tables, chrisbur's explanation. which you have quoted from, seems quite clear.

RG2015

molerat wrote: »

Because PAYE does not use the exact amount but the amount from the tax tables, chrisbur's explanation. which you have quoted from, seems quite clear.

I do not understand.

Why does PAYE use an inexact amount when it would be quite easy to use the exact amount?

molerat

RG2015 wrote: »

I do not understand.

Why does PAYE use an inexact amount when it would be quite easy to use the exact amount?

It does use an "exact" amount, just not the exact amount of your tax code as the tax code is not an exact reflection of your tax allowance. Someone with an allowance of £10000 gets the same 1000 code as someone with an allowance of £10009 (or £10001 or £10002 or ..........). The person with the higher allowances would lose up to £9 of tax free earnings, the tables gives that code an allowance of £10009.08 so the higher allowance person is not disadvantaged.

RG2015

Thank you molerat.

It is strange though that we have a tax system that uses approximations and ‘exact’ amounts that are not real exact amounts.

Is it any wonder that HMRC are unable to deliver decent IT systems when the basis for their calculations is so illogical.