Complicated Tax situation - Help pls

stevo_r83

So im trying to cut out the tax I pay and I wondered if anyone could elucidate on the following for me.

My situation: I have just started a 3-year PhD for which I get paid a tax-free stipend of £15000 (£1250 pcm). I also have a sunday job where I earn about £200 pcm.

My questions:

1) Since the beginning of this financial year I have earnt about 6k in a part-time job before I started my PhD. I have been paying tax during this time. Because my stipend is tax-free and different to most other jobs in that sense, will my first 6k be counted seperately and my tax be refunded?

1) My stipend is tax free but will my earnings on top of that fall into the untaxed allowance (i.e. under 6k a year or whatever it is) or will it be calculated on top of my stipend and therefore be taxed at whatever the rate is over 15k?

Thanks in advance.

Rolo_Tomasi

See the following link:

http://www.hmrc.gov.uk/manuals/eimanual/EIM06265.htm

Provided you fall into one of these categories then the stipend is not taxable as employment income. This means that you will still be able to earn £6475 this tax year before you have to pay tax.

Will your earnings on top of the stipend be with the same employer as previous? If so you should get any excess tax paid back through your wages.

LucyTheDwarf

In answer to questions 1 and 1, if your stipend is tax free it will not be included in your taxable income, therefore your personal allowance will not be used up on this, so you will have 6475 tax free of your £6k, then anything above that will be taxed at 20%.

The tricky bit as far as I can see is establishing whether it is actually tax free - do you know this for certain?

stevo_r83

I am 100% it is tax free, as are all stipends of this sort. If I have already been paying tax will i need to request to get this back or will it be recalculated automatically? If the latter, does this occur at the end of this tax year? I think I have paid a few hundred alredy.

Thanks again.

stevo_r83

Sorry just read the rest of ur post Rolo. Yes it will be the same employer.

LucyTheDwarf

stevo_r83 wrote: »

...as are all stipends of this sort.

Stipends paid can sometimes be considered as taxable earnings.

Firstly, you need to sort out your tax code by contacting HMRC. We have completed 6 months of the tax year thus far, so roughly half of your personal allowance. Therefore you should have had about 3.2k tax free so far, and 20% tax on earnings above this. Once you've established that you're on the right / wrong tax code, if a refund is due you will receive it in your wages.