Tax

njo86

Hi,

I started a new job a couple of weeks ago and understood that I may have to go on emergency tax, however the tax I've paid is way over 20% I wondered if someone could help me understand what's happened. Here is info from paylsip:

Total Gross Pay: £1151.17
Gross for Tax: £1151.17
Earning for NI: £1148.00

Payment period 4 weekly

PAYE tax £766.00(!)
National Insurance £78.08

Year To Date (this includes earnings from job I left which I provided P45 for)
Total Gross Pay TD £6714.63
Gross for Tax TD £6714.63
Tax Paid TD £1148.00
National Insurance TD: £1148.00
National Insurance TD: £78.08

Net Pay: £307.09
Tax Code: BR
My manager has contacted pay roll but whilst we wait for the reply wondered if anyone could spot what's gone wrong!

Gertie_Walker

If this is your only job, then you should not be on code BR, which gives you no tax free allowances. You should be on 647L at least.
You need to ask your payroll dept to chyeck the code number shown on the P45 from the previous job and correct it if necessary. If not, then ask for a P46 which you sign to say this is your only job and you will be put on 647L.

chrisbur

Can you give full details that appear in boxes 6. 7 and 8 on your P45 part 1A?

njo86

Here is the info from P45:

4: Leaving date: 13/08/2010
5: Student Loan Deducations: Y
6: 642L
7: Month Number: 5,
Total Pay to date £5563.46
Total Tax to date £476.80

Thanks for you reply Gertie. Does that mean essentially what they're doing is applying basic rate to all earnings to date so I'm paying tax on my old job too? I'm still a bit confused as I've paid about 66% tax on this months wage which is higher even than higher rate! I can only guess that therefore they take it from all pay to date. Or they've just made an error!

njo86

Just realised I missed part 8:

Both sections are blank and there is a note which says if no entry here the amounts are those shown at box 7.

alice011178

Mmm. I don't think you should still be paying tax on the wages from your last job. You only earned £5563.46 during your last job, which is below the annual tax allowance on your P45. It isn't as though you have underpaid tax.

If your total taxable pay to date this year is 6714.63, then you should only have paid £47.93 in tax in total, so it looks as if you have overpaid, not underpaid!

If you were paying BR tax, you should only have paid £249.27 (www. listentotaxman .com ) in tax this month, and on the regular tax code you should only have paid £141.50. Have a look at the listentotaxman website - sorry about the spaces but I can't post links - and have a play with your figures. It is very helpful when trying to calculate tax, NI, student loan payments, etc.

There is no way you should be paying tax at that level. It sounds like an inputting error on the part of payroll. Good luck getting it sorted.

chrisbur

njo86 wrote: »

Here is the info from P45:

4: Leaving date: 13/08/2010
5: Student Loan Deducations: Y
6: 642L
7: Month Number: 5,
Total Pay to date £5563.46
Total Tax to date £476.80

Thanks for you reply Gertie. Does that mean essentially what they're doing is applying basic rate to all earnings to date so I'm paying tax on my old job too? I'm still a bit confused as I've paid about 66% tax on this months wage which is higher even than higher rate! I can only guess that therefore they take it from all pay to date. Or they've just made an error!

Very much looks like they have applied the earnings figures from the P45 but not the tax code. As you say you are paying tax on your previous earnings due to this.
The figures do not quite fit though, you have prev tax 476.80 tax paid on this wage 766.00 which adds up to 1242.80 but payslip shows tax to date 1148.00 so would be worth asking them to check if tax from P45 has been entered correctly. You may be able to check yourself payslips often have a prev employment tax column on them.

With regard to listen to the taxman and other tax calculators, there is a major problem with them. They usually only give the correct answer when you earn the same every month and nothing changes in your circumstances. If your earnings vary a lot, your code changes, you change jobs, you change how often you are paid, or any of several other changes a tax calculator will not give you the correct tax figures most of the time.

njo86

Ok, it looks like the copy that pay roll (parts 2 and 3) have of my P45 has the BR code on it, but mine (part 1) has 642L. Unfortunately they're are in a diffferent region so I can't see it and stupidly I didn't take a copy before sending it off (I know _pale_ ). So I am going to copy my part and forward that on. Is it likely/possible that the 2 parts have different codes on?

Gertie_Walker

As parts 2 and 3 are carbon copies of part 1a, I can't see how this has ended up like this. It looks more like you have had 2 p45's. Can you tie up the P45 figures with your final payslip from your old employer?

njo86

I'm still not quite sure what's happened but I forwarded photo's of my part and pay roll are posting a cheque on Monday! Thanks to all for all your help, I'll post if/when it's worked out quite what's happened for the curious amongst you! Thanks again, so nice to know there's somewhere to go to get free advice and support!

chrisbur

njo86 wrote: »

Ok, it looks like the copy that pay roll (parts 2 and 3) have of my P45 has the BR code on it, but mine (part 1) has 642L. Unfortunately they're are in a diffferent region so I can't see it and stupidly I didn't take a copy before sending it off (I know _pale_ ). So I am going to copy my part and forward that on. Is it likely/possible that the 2 parts have different codes on?

This is very, very, unlikely; and even if it was the case your new employer should not have used that tax figure. They should have worked out a tax figure based on the gross and the tax code and advised the tax office that they were using a different figure, that's what section 13 on part 3 of a P45 is for.

My guess is that when you were set up on their payroll system they had not recieved a P45 or P46 so put you down as BR tax code, they then recieved the P45 put the figures onto your record but forgot the tax code itself.