Tax question

webbiewebbie

Hi all.

I started a new job (was at uni before) at the end of June. I got paid at the end of July and didnt get taxed but this month I am getting taxed £140 (out of a £1250 monthly salary).

I hadnt worked since the end of 2008 (ie since April 09). I thought I could earn up to £5,035 tax free?

Could anyone clarify this for me??

I'm a little stressed coz I wasnt expecting to be taxed this month, have just gone through a break up and have to pay all my bills myself now which i will manage but wont have much left over!

Thanks

Lokolo

Its done PAYE. So instead of earning £6,475 then getting taxed. You get part taxed along the way.

Each month you get £540 (6475/12) tax free. Then the rest you pay tax on.

CLAPTON

what is your tax code?
what are your total earning to date this tax year
what is your tax to date this tax year


You can earn 6475 per annum (corresponding to a tax code of 647L) tax free.
however this is prorata ed each month so each month you can earn 539 before tax. Its likely that your first pay packet 'used' up your tax free allowances from april, may, june so you paid no tax that month

webbiewebbie

My tax code is 647L M1
Total Earnings this year: 2,615.38
Tax paid: 142

On the up side, I have applied for working tax credits so hopefully will hear about that soon.

Thanks

CLAPTON

Your tax code is incorrect.
It should be 647L without the M1.


I don't really undertand your figures... you seem to say you weren't tax in july but paid 140 in august but your total tax was 250.

CLAPTON

forgot to add
that assuming your 2,615 is your cumulative earnings to the end of August (i.e. month 5 of the tax year) then indeed you should have paid no tax yet.

webbiewebbie

OK, should I contact my HR dept about the tax code? wonder why they would put me on the wrong code?

I wasnt taxed in July at all, thats right. This month I am getting taxed 142, so my total tax so far this tax year is just 142. My monthly salary (before tax or NI is £1250)

CLAPTON

Usually 647L M1 is an emergency code which is someytimes given to new recruits without a P45. If they did this initially then you would have paid some tax in July.. what was the July code?

webbiewebbie

interesting, just checked and my tax code for July is 647L.

CLAPTON

curious .... maybe ask HR why it changed otherwise contact HMRC

webbiewebbie

yeah, will get in touch with HR and find out whats happening. Probably will still have to get taxed :-( *cry*

thanks for the help