tax and ni

weary

i've returned to work after 5 years and am being taxed was i wrong to think i wouldnt be taxed until i've earned x amount

Mudd14

Depends on what tax code you are on?

You should be on a normal 647L code if you have not worked this tax year so you would have to use your tax free allowance upto date before being taxed.

molerat

If you have only just started you are probably on code BR until the tax office get it sorted out and you get a repayment. Did you fill in a P46 when you started ?

weary

i filled lots in so i think i did i'll check my wage slip now
thanks

Debt_Free_Chick

weary wrote: »

i've returned to work after 5 years and am being taxed was i wrong to think i wouldnt be taxed until i've earned x amount

In simple terms "yes".

Rather than let you earn "£x" before you pay tax, you are allowed to earn "£x" divided by 12 so that the tax you pay this month is roughly 1/12th of the tax you would pay for the whole year.

Over the course of the year, your tax ought to be "about right", so that if you earn for 7 months of this tax year, the tax you pay is about 7 months worth.

NI is different ... if your pay this week/month is over the NI threshold, you will pay NI.

weary

thanks, now i get it my code is 647L
thanks all

chrisbur

weary wrote: »

thanks, now i get it my code is 647L
thanks all

You also need to check your tax basis, this may be cumulative or week1/month1. If you chose box A on your P46 it should be cumulative, if you chose box B it should be week1/month1.