confused with p45

freebieholic · 25 July 2006 at 10:37AM

i walked out of a job on june 5th this year after 6years in that employment. aftrer several phone calls to the company i have finally received my p45. iam completely confused by the figures that are written on it. it says total pay

to date £854..33

total tax to date £0.50

can this be right???

i sureley have paid more than 50p in tax over that ammount. i dont have a payslip to check as it was very small family business and payslips were sporadic to say the least.

please help. do you think i should go into the tax office?

katie_boo · 25 July 2006 at 1:24PM

I'm in a similar situation, I'm about to be made redundant from my current job in a very small company where I have never received any paperwork, no P60's or payslips, and have discovered that although my boss has been deducting Tax and National Insurance from my wages since I began here almost 4 years ago he has in fact never paid a penny of it to the Inland Revenue and I am not even registered as an employee of the company. I am obviously rather worried about this but I have spoken to my local tax office a few times and they've been really helpful. They told me to write a letter detailing the situation but I haven't got around to it yet as I don't want to cause any problems before I have my redundancy money as I'd be in a lot of trouble without it.
I think you'd be best calling your local tax office and discussing it with them, they'll be able to tell you what to do.

grade15 · 25 July 2006 at 1:29PM

is this p45 for this tax year?
the first £4,895 is personal allowance, therefore..845.33 is free from tax..
but you would have to check with your NI payments as they differ..they are worked out weekly..
so how much tax have YOU paid..maybe you can claim your tax and NI back?

check the http://www.hmrc.gov.uk for more info.

WeirdoMagnet · 25 July 2006 at 1:59PM

Have a look at this page on the HMRC website. It gives all your rates for the tax years 05/06 and 06/07.

I think I'm right in saying that your employer should have taxed you based on what you were going to earn over the whole tax year. Based on what you've said (£845 for two months work), you'd earn roughly £5070 for the whole 06/07 tax year. That means that for the whole year, only £35 is taxable - and as the first £2150 is taxed at 10%, that'd only be £3.50 tax (for the whole year), so for the two months worth, I think it'd be about 58p.

Hope this makes sense!

freebieholic · 25 July 2006 at 2:05PM

Georgina wrote:

Have a look at this page on the HMRC website. It gives all your rates for the tax years 05/06 and 06/07.

I think I'm right in saying that your employer should have taxed you based on what you were going to earn over the whole tax year. Based on what you've said (£845 for two months work), you'd earn roughly £5070 for the whole 06/07 tax year. That means that for the whole year, only £35 is taxable - and as the first £2150 is taxed at 10%, that'd only be £3.50 tax (for the whole year), so for the two months worth, I think it'd be about 58p.

Hope this makes sense!

so going on that basis my p45 is correct. am i right in assuming this

freebieholic · 25 July 2006 at 2:08PM

just had another thought the £845 i earnt was rather low because i had taken sick days in the 6 week period. so should this figure have been used given that it was less then the average of antipipated earnings.

WeirdoMagnet · 25 July 2006 at 2:18PM

Yes, your P45 is about right.

I'm going to clarify what I said in my earlier post by saying that your tax code is calculated based on what you are likely to earn in a tax year.

Taking your tax code into account, with PAYE, you would only be deducted on the amount you actually earnt, so if you didn't receive sick pay, then you wouldn't be taxed on it.

I found a nifty little tax calculator online the other day, but when I needed it again I couldn't find it. I'll look again now for you.