tax pay questions

chemer

Hello,
I am new to that site, in a fact that is my first post . I am really happy to find out that site. I am also new to UK. I am from Latvia. I spend hours to understand how do the taxes counted. But whatever I have some questions left unanswered . I am new to UK, never worked here before, never been in UK too. I arrive in July and now work on some warehouse through the agency. I regularly got paid to my bank acc in Tsblloyds. I have NI number and Home Office already. Everything seems fine. But my payslips makes me wonder. I have 647L Tax Code (I am already find out about it on this wonderful site, and I like to say many thanks to people who write about it). According to that code (as I think) my personal allowances need to be 6470 (correct me if I wrong). But I started to pay deductions at 3500 (or near it). I am not earning much in a fact I am lucky to get 256 for gross pay...sometimes even less. I am charged by my agency for money I owe them and for accommodation they provide to me, and the tax pay . Taxes counted from all sum of 256 or whatever it is. My friend in same situation like me was charged for 0.60p tax for 27( 5.8 pound per hour gross) hours of work. I think there is something wrong or not?
Can anyone please help? Any advice is highly welcome!

Hopes my English was not too bad...

Lokolo

The £6475 is per year.

However, with the system most companies use it depends on how often you get paid. If you get paid monthly, your tax allowance is £539.58 per month (£6475 / 12). If you get paid weekly, your tax allowance is £124.52 (£6475 / 52).

How often is the £256 pay?

chemer

In a week....but why they take tax from all sum then ? I am confused now... )

Lokolo

Your pay is weekly. This means each week you can earn £124.52 before you pay tax.

You earn £256. So £256 - £124.52 = £131.48. That is how much can be taxed. 20% tax on £131.48 is £26.30.

You will pay £26.30 in tax each week. You will also pay some National Insurance.

It is worked out like this because it is easier when you have the same pay each week for all weeks in the year.

If you had tax allowance -> all tax, it would be more complicated as you would not pay any tax for 6 months, then pay loads of tax for 6 months.

chemer

aaaaaaaaa I get it now!!! Thank you very much!!!