How to get a tax rebate inc Tax Code Checker

jem16

Northerness wrote: »

However, I'm confused because I was unemployed from October up until a few days ago and I understand that JSA is a taxable benefit - does this affect this rebate at all?

Yes it does. JSA is taxable.

What you should do is add up the total income from your earnings plus the JSA. Then deduct the personal allowance of £7475. Everything left is taxed at 20%.

Compare that amount with the total tax paid from your earnings and the JSA.

Northerness

jem16 wrote: »

Yes it does. JSA is taxable.

What you should do is add up the total income from your earnings plus the JSA. Then deduct the personal allowance of £7475. Everything left is taxed at 20%.

Compare that amount with the total tax paid from your earnings and the JSA.

But I would have been taxed on the JSA automatically for the past six months, right? I've been on the BR tax rate all year so in my six months in work I was taxed 20% on everything I earned. So surely the £1495 I thought I was owed from the first six months is still applicable - even though I was unemployed for the past six months.

Haven't actually got access to documents about what I earned in JSA right now so I'm looking for some clarity really. The MSE post/calculator about reclaiming income tax has no mention of JSA, so this is why I'm a bit confused.

Northerness

Also how do I know what tax I paid from the JSA? Where would this info be? Doesn't everyone over 25 get paid exactly the same benefit when on contribution based JSA?

I understand tax in relation to wage/income, just not in relation to JSA. is JSA taxed at source? Does what you earnt previously in the tax year affect this? These are the queries I have if anyone can help....

jem16

Northerness wrote: »

But I would have been taxed on the JSA automatically for the past six months, right?

Did you hand in your P45 from work?

I've been on the BR tax rate all year so in my six months in work I was taxed 20% on everything I earned. So surely the £1495 I thought I was owed from the first six months is still applicable - even though I was unemployed for the past six months.

Possibly but without knowing what tax code the JSA used no-one can say for sure.

Northerness wrote: »

Also how do I know what tax I paid from the JSA? Where would this info be?

On a P60U from the Job Centre.

Doesn't everyone over 25 get paid exactly the same benefit when on contribution based JSA?

Gross yes but not net. That depends on your tax code and previous tax during the tax year.

Northerness

Hi Jem16, thanks for your help, but this still doesn't make any sense to me. I'm a creative-type person and although I can usually get by with numbers/percentages etc, I really can't get my head around this.

1. I did hand in a P45 to HR on the first day that I started my last job but I have checked all my payslips and I was on tax code BR/0 for the entire six months that I worked there. (April-October 2011).

2. Do the JSA actually use a tax code? I've never heard this before. I know the DWP give you a tax code for the year but JSA using a tax code is new to me.

3. I haven't received a P60U, I guess we're only just in the next tax year and I only signed off a few days ago. As it's a bank holiday and I can't call HMRC, I'm looking for some clarity online.

4. As I said, my income tax was paid at basic rate for the entire six months I worked during last tax year- I paid 20% on everything (On 12k of wages)!

I would hope I'm owed the £1495 back that I overpaid as standard - it isn't my fault my employers put me on emergency tax. If I had been on an L tax code, I would have still got the same JSA payment for the six months I was unemployed (and not have to give them any money back either). This is what I don't understand

amiehall

If you received even £1 of JSA, then you will be owed less than £1495 tax back. Basically as you mentioned, JSA is taxable but, if you didn't pass your P45 on to the job centre, you're unlikely to have been taxed on what you've been paid. So imagine you were paid £800 JSA, the tax due is (11943+800-7475)*0.2=1053.60 so £2388-1054=£1334 refund due. This is just as an example.

Once you've found out how much JSA you were paid gross, you can substitute this number for the 800 to work out how much you should get back.

Northerness

I'll break it down and hopefully someone can help, calculation is not my forte!

05/4/11 - 03/10/11 (total income from this period)
Taxable pay YTD - 11, 943
NI - 977.70
Tax paid YTD - 2,338
Tax code BR/0

From October 2011 - present (total income from this period)
26 weeks of JSA
67.50 per week from 03/10
71.00 per week from 13/04
The claim finishes tomorrow as I'm starting a job in two days.
An estimation of this JSA income based on these figures would be around £1765

The problem with the tax code is that my employer from the six months I was in work obviously didn't do anything with the P45 I gave them when I started. I definitely gave them it as I had to make a special trip across the site where I worked.

I can't remember if I gave the Job Centre my P45 but I've done everything they asked and if they asked for a P45 I would have given them one. I do remember taking some documents in because they photocopied a load of stuff.

I would still like someone to explain as if I'm a two year old how tax is applied to JSA? What if I hadn't have been emergency taxed in the first place? How do you find out if you have been taxed? I've only received two letters from the Job Centre in the entire six months I was on JSA - no mention of tax or codes.

Northerness

What I'm trying to say is that Contribution based JSA is a flat rate benefit, how on earth can it affect the fact that back in October, based on my earnings at the time, I was technically going to be owed a £1495 tax refund.

If I hadn't have been owed £1495, I would have still received the full JSA regardless of tax paid April-October. In fact, even without being on an emergency code, I would have still being owed tax this April as my earnings would have been far lower than expected throughout my 26 weeks on JSA.

amiehall

Well if you imagine the JSA is wages from a job. You worked 10 hours a week or whatever and earned 67.50 per week. You would understand that the earnings for the WHOLE year are relevant to working out how much tax is due for the year overall.

If you'd claimed the tax refund after you left your previous job, you could have had the £1495 back but you'd have been taxed 20% on every penny of the JSA. While it is flat rate, it is taxable.

I'm confused as to why the JSA was at 2 different rates? I've never claimed contribution-based JSA, I'm not totally sure why that would happen. Not withstanding that that seems odd to me, you should be owed about £1150 back (presuming no tax has been deducted from your JSA). You know that any JSA paid since 5th April shouldn't be included for the calculations for last year?

amiehall

I would add that even if you hadn't been overtaxed in the first place, many people end up being owed a tax refund when they claim JSA. This is because, HMRC don't treat your personal allowance as one chunk and let you earn up to that amount then start taxing you. They split your allowance into chunks and give you part of it each time you're paid. So if you'd been taxed properly on your earnings, you'd have had about £625 paid tax free each month then paid 20% tax on anything in excess of that.

Obviously being on JSA doesn't bring in £625 a month for you, so some of those chunks in later months aren't fully used. In an ideal world, the job centre would have refunded a bit of tax each time they gave you JSA so over the year as a whole it evens out.

This has obviously not been possible. The good news is that sorting it out is likely to be simple. If you call your local tax office, they will tell you if they can process the refund automatically or they might need you to post in your P45 and P60 if they don't have records. They should just post you a cheque with a sheet explaining the calculations they've done.