Query re tax

TomandBarbara

Hello

I wonder if someone can help me....my sister left her work last month due to redundancy and started back at the same workplace on agency last week. Her tax code is 647L the same as it was when she left...she only worked 7.5hrs the first week and was deducted £33.40 from her gross amount of £42.98 leaving her with just £9.58 for a days work.

Last week her tax and ni was correct, still on same tax code 647L.

Our payroll dept have said the following;

It would appear that she was taxed, including her P45 figures. The P45 would have stated TW08 and as you are aware, tax week 08 on the 4 weekly payroll would have only been actual tax week 06 on the weekly calendar of 09-10 tax year they have taken her final taxable pay of £2196.91 and added her payment of £42.98 tax. I have calulated her tax and it appears that she taxed at TW07 and therefore her tax is correct.

Hope this makes sense to you, its the way the 4 weekly payroll works here, she has been paid upto 09/05/09, which is actual tax week 06 of the tax year, although we have worked her tax out as at tax week 08 of the tax year, due to our accounting periods here

I actually work here too and input the payroll data but have nowt to do with tax and ni and find it utterly confusing

thanks in advance!

fengirl_2

I understand what they are saying.
As you know, everyone has an annual tax free allowance. For PAYE purposes this is divided into 52 and you get 1/52nd of your tax free allowance against each week's pay.
In your sister's case, she was paid up to week 6 (of the tax year) but the employer used the tax free allowances up to week 8 (it looks as if she may have been paid 4weekly) and so has received a total of 8 week's free pay. When she went to the agency, her first pay was in week 7, but as she had already received her tax free allowance up to week 7 (and indeed week 8), she cannot have that tax free allowance twice, so tax would need to be deducted at basic rate for that week.
In subsequent weeks, she is due her tax free allowance again and her tax will reduce. At the end of the year (and indeed at this stage of the year) her tax is therefore correct.

reddevilled

I thought they could only deduct 50% of your gross income maximum through payroll, or has that changed?

TomandBarbara

fengirl wrote: »

I understand what they are saying.
As you know, everyone has an annual tax free allowance. For PAYE purposes this is divided into 52 and you get 1/52nd of your tax free allowance against each week's pay.
In your sister's case, she was paid up to week 6 (of the tax year) but the employer used the tax free allowances up to week 8 (it looks as if she may have been paid 4weekly) and so has received a total of 8 week's free pay. When she went to the agency, her first pay was in week 7, but as she had already received her tax free allowance up to week 7 (and indeed week 8), she cannot have that tax free allowance twice, so tax would need to be deducted at basic rate for that week.
In subsequent weeks, she is due her tax free allowance again and her tax will reduce. At the end of the year (and indeed at this stage of the year) her tax is therefore correct.

Brilliant that makes perfect sense, just got to explain that to my sister!