How to get a tax rebate inc Tax Code Checker

Northerness

amiehall wrote: »

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?

RE the changes in rates: I got a letter on 21 Feb saying "from 9 April 2012 the rates of Social Security benefits will change, from 13 April 2012 your Jobseekers Allowance will be 71.00 a week". They didn't explain why, I guess this happened to everyone.

I still don't understand though, I'm flummoxed by it! It seems unfair that if my employers had got my tax right April-Oct than I would have had more money in the long term. I was doing PAYE and I've never heard of anyone on PAYE getting a tax bill after being on JSA, in fact usually people in this situation get a refund without even being on emergency tax as they're earning much less than projected.

Anyway....I guess I'll see what HMRC say, although I don't particularly trust them. ( e.g Once they continuously emergency taxed me for all my brother's earnings and insisted we were the same person - all because he has the same initials and a consecutive NI number....doh!)

Northerness

amiehall wrote: »

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.

Thanks, very helpful

jem16

Northerness wrote: »

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).

Why didn't you do something about the BR code during the 6 months you worked there? The BR code is not an emergency tax code. It is a tax code used either in the absence of a P45 or P46 or for a 2nd income.

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.

It depends on circumstances. Normally JSA is paid gross as the amount paid is below the normal weekly/monthly tax free allowance limit. However if your P45 showed an unusual tax code, tax may have been deducted. Probably unlikely in your case though.

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.

You should also receive a P45 from the Job Centre to give to your new employer so they can get this year's tax correct.

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.

As I said BR isn't an emergency tax code. However it is partly your fault as you didn't do anything about having a BR code for 6 months.

jem16

Northerness wrote: »

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

These are the gross rates. How much was actually paid into your bank account? That should tell you whether any tax was deducted or not.

Northerness

I actually didn't realise about the BR tax code, as I'd given my employers my P45 from my last role I thought it must be right. I've only just realised after using the MSE reclaim tax tool, seeing that I'm probably owed money and then checking my tax code. After all, isn't that what the tool is for?

The tool doesn't mention anything about JSA impacting tax though, perhaps it would be helpful if from MSE could add something on this. There are a lot of people who have claimed JSA who will really benefit from this.

Thanks for your help but saying it's my fault isn't exactly fair - the average person isn't particularly knowledgeable about tax codes. Plus, we don't know the reason I'm on Basic Rate, they may think I had a second job again - which isn't correct.

jem16

Northerness wrote: »

The tool doesn't mention anything about JSA impacting tax though, perhaps it would be helpful if from MSE could add something on this. There are a lot of people who have claimed JSA who will really benefit from this.

There are a lot of things the tax tool doesn't mention which will impact your tax code. It's only a guide.

Thanks for your help but saying it's my fault isn't exactly fair - the average person isn't particularly knowledgeable about tax codes.

The average person should be knowledgeable about the basic tax codes. After all if you have money taken off your salary each month, do you not want to know that it's correct?

Everyone should know that they have a basic tax-free allowance which gives them their tax code. If it's any different they should be checking to see why.

Plus, we don't know the reason I'm on Basic Rate, they may think I had a second job again - which isn't correct.

You say second job again. Did you have a 2nd job before?

Northerness

No, i have never had a second job - as I said in an earlier post, HMRC once thought me and my brother were the same person and taxed me as if I had a second job. They taxed me for his pay a well as my own. How they made this mistake when we lived 200 miles apart, I have no idea.

I know the tax tool is only a guide but unemployment is one of the biggest problems in the UK right now and so I'm offering them a suggestion to improve their tool to help others.

Not everyone knows about tax codes,they don't teach you this stuff at school - you have to learn it from somewhere and that's why people like me come on sites like MSE.

jem16

Northerness wrote: »

No, i have never had a second job - as I said in an earlier post, HMRC once thought me and my brother were the same person and taxed me as if I had a second job. They taxed me for his pay a well as my own. How they made this mistake when we lived 200 miles apart, I have no idea.

Perhaps there was a mix up with NI numbers?

Not everyone knows about tax codes,they don't teach you this stuff at school - you have to learn it from somewhere and that's why people like me come on sites like MSE.

Now that you do know more about it, make sure you get your P45 from the Job Centre and get your tax code sorted out for your new job. Keep an eye on the first few payslips and make sure it is correct. More than likely to be 810L - no Mth1 after it. If it's not get onto HMRC right away.

Good luck with your new job.

Northerness

Hi, yes there was a mix up with NI numbers, we have consecutive numbers and the exact same first and middle initials and last name - it was a few years back but took some sorting out.

Thanks for your help, yes I'll be making sure my tax code is correct this time!

amiehall

Also to clarify, this situation will NOT leave you worse off in the long run. You still owe the exact same amount of tax for the year and you will get any excess back although you may have to chase it up.