New job: which tax?

Ellie83

Hello everyone!

Please bear with me as I try to explain my situation in my very clumsy English . I will try to talk to someone from IR/work tomorrow, but I could do with a bit of explanations beforehand or I am afraid I won't understand half the things I may be told on the phone.:o

I have been in employment until the end of August 2009, when I quit to go back to uni. While in employment, I paid my taxes through the PAYE system: roughly £9000(gross salary)/£1200(taxes) for this financial year.

I managed to find a very small part-time job, earning £38/week. I filled in all the HMRC paperwork sent by my employer and also gave them my P45. When I received my first wages, I was surprised to see that they had not deducted any taxes.

I think they might have made a mistake, because surely I should be taxed, having earned that much in my old job? But I am really useless with taxes, so I just would like to know what you think before I ask them/HMRC the question.

Thanks for your help. I feel a bit ashamed that after 2 hours reading the HMRC website, I still don't understand how taxes should work in my situations.

jem16

Ellie83 wrote: »

I managed to find a very small part-time job, earning £38/week. I filled in all the HMRC paperwork sent by my employer and also gave them my P45. When I received my first wages, I was surprised to see that they had not deducted any taxes.

Each month you receive one twelfth of your personal allowance, so basically you would be able to earn approximately £539 ( £6475/12) each month before paying tax. If you are earning £38pw this would be below the threshold for paying tax so it would be correct for no tax to be deducted.

What tax code was used?

Ellie83

Thanks Jem! I think I understood what you said, (although my brain is now dangerously sore _I told you I was a hopeless case!). My concern is I have already earned around £9000 (on which I have already paid taxes) between April on August (as written on my P45) and this is beyond my personal allowance?

I don't know which tax code is used, as my employer has not sent me any pay slip: are they obliged to send one or do I need to request it?

jem16

Ellie83 wrote: »

Thanks Jem! I think I understood what you said, (although my brain is now dangerously sore _I told you I was a hopeless case!). My concern is I have already earned around £9000 (on which I have already paid taxes) between April on August (as written on my P45) and this is beyond my personal allowance?

Your earnings as you say are already beyond the personal allowance. However you have, as yet, not received all of your personal allowance. You have only received 7/12ths of your personal allowance. Indeed you may not actually have had the benefit yet of September's alllowance if you were not working then.

It's not a case of getting all £6475 of your personall allowance in the first month of the tax year and then nothing thereafter. You get a bit each month. As you were earning more in the first part of the tax year you would probably have paid too much tax considering your wages are much lower now. If you continue earning £38pw from now on you will pay no tax and may be due a rebate at some point.

I don't know which tax code is used, as my employer has not sent me any pay slip: are they obliged to send one or do I need to request it?

You should be entitled to one automatically. If you have not received one ask them where it is.

Ellie83

I get it! Thank you Jem! You should be the one writing for the HMRC website

I will give them a call tomorrow to ask where my payslip is.

Thanks again

trevormax

Due to the fact you have such a low income, you will actually start to get some tax back each pay day. If you continue to earn £38 per week then you will get roughly £17 per week back in tax. So although you will only be earning £38 per week you will actually get paid £55 per week.

6475 / 52 = 124 allowances per week.
124 - £38 (your weekly wage) = £86
£86 x 20% = £17.20.

Ellie83

trevormax wrote: »

Due to the fact you have such a low income, you will actually start to get some tax back each pay day. If you continue to earn £38 per week then you will get roughly £17 per week back in tax. So although you will only be earning £38 per week you will actually get paid £55 per week.

6475 / 52 = 124 allowances per week.
124 - £38 (your weekly wage) = £86
£86 x 20% = £17.20.

Thank you Trevormax. Is it taxback on what I have already paid? (I am trying to understand as much as I can )
So when is one given tax back? Do I need to fill the tax back form?

jem16

Ellie83 wrote: »

Thank you Trevormax. Is it taxback on what I have already paid? (I am trying to understand as much as I can )

Yes it is. As I already said you will have paid too much tax in the first half of the tax year. I didn't know how to calculate that extra but trevormax kindly has.

So when is one given tax back? Do I need to fill the tax back form?

If you have been put on a cumulative tax code it will be paid automatically. If it's a Wk1/Mth1 tax (which it shouldn't as you have given in your P45) then it would need to be claimed at the end of the year.

That's why I asked your tax code.

Ellie83

Thanks Jem! I'll ask for my payslip and look at the tax code :beer:
In the event that my employer did not use the right tax code, will it be too late for them to change it? Or will I have to deal with HMRC myself to prove my low earnings, etc?

I am sure they did things properly, it is just that I like understanding things like this . I do not have family in the UK to help, but my father started his career as a taxman in France, and I have always been told to check and double check :rolleyes::D (If he knew how clueless I am, he'd be horrified )

trevormax

If your employer is using a W1/M1 tax code then you can contact HMRC and ask them to issue a cumulaative code to your employer. You can do this right up until the end of January I think after which time it will be too late.

Ellie83

Thanks Trevormax! I'm lucky you told me that! Actually, I am lucky you both helped me :j

Thank you very much for your help