How to get a tax rebate inc Tax Code Checker

thefreckle

Hi

My wife's going off on maternity leave at the end of next week and we're trying to work out what we're likely to receive in terms of SMP. (To be more precise, she's taking 4 weeks holidays and then starting maternity leave on 4 August).

The first thing we'll receive is SMP on it's own - approx £575 per month as far as I can tell (give or take a few pounds).

She earns £23k per annum and has paid tax on that amount so far this year (tax code is 944L I think). So she'll have full earnings up to and including July. For August and half of September she'll have 90% of her earnings as SMP. And from mid September on, she'll have SMP at £575 per month.

Taking all that into consideration, I've estimated that her pre-tax earnings up to and including March 2015 will amount to just over £14k.

As she's been paying tax on an assumed annual earnings of £23k, I think she'll have overpaid substantially. Up to end the end of September, the tax paid will amount to £2150 approx - however, on an annual income of £14k I think she should only be paying tax on approx £4.5k, and that should amount to £900 ish. So that will be an overpayment of £1250.

I have a few questions based on that:

1) Whilst my calculations aren't exact (I think they're close enough though), is my logic correct in what I'm thinking?

2) If by September we have made an overpayment of approx £1250, will that be returned to us in a lump sum at the end or in monthly installments along with the SMP payments? Or a mixture of both? (NOTE - returned to us )

ie. From October, will we receive:

£575 per month SMP + £1250 in April 2015
£575 per month SMP + £200 tax rebate
£575 per month SMP + £100 tax rebate + £650 in April 2015

3) Will we lose 20% tax on the SMP payments? I've complated the calculations above assuming we'll receive the £575 without any tax applied to it.

Thanks

jem16

thefreckle wrote: »

She earns £23k per annum and has paid tax on that amount so far this year (tax code is 944L I think).

944L was last year's tax code. She should be on 1000L this tax year.

As she's been paying tax on an assumed annual earnings of £23k, I think she'll have overpaid substantially. Up to end the end of September, the tax paid will amount to £2150 approx.

I'm not sure how you work that figure out. £23k with a 1000L tax code would see £216.67pm. So in September she would have paid £1300.02 tax. For the whole tax year it would have been £2600.

Even on a 944L tax code it would only have been £1355.10 for 6 months.

however, on an annual income of £14k I think she should only be paying tax on approx £4.5k, and that should amount to £900 ish. So that will be an overpayment of £1250.

£14k would see tax of £800.

I have a few questions based on that:

1) Whilst my calculations aren't exact (I think they're close enough though), is my logic correct in what I'm thinking?

2) If by September we have made an overpayment of approx £1250, will that be returned to us in a lump sum at the end or in monthly installments along with the SMP payments? Or a mixture of both? (NOTE - returned to us )

Provided your wife is on a cumulative tax code, each month will look at what she has been paid and what tax she should have paid. If she has paid more she will get a refund but it may possibly be over a few months as it recalculates each month. By the end of the tax year her tax will be correct.

Anatidaephobia

thefreckle wrote: »

My wife's going off on maternity leave at the end of next week and we're trying to work out what we're likely to receive in terms of SMP. (To be more precise, she's taking 4 weeks holidays and then starting maternity leave on 4 August).

The first thing we'll receive is SMP on it's own - approx £575 per month as far as I can tell (give or take a few pounds).

She earns £23k per annum and has paid tax on that amount so far this year (tax code is 944L I think). So she'll have full earnings up to and including July. For August and half of September she'll have 90% of her earnings as SMP. And from mid September on, she'll have SMP at £575 per month.

Taking all that into consideration, I've estimated that her pre-tax earnings up to and including March 2015 will amount to just over £14k.

If her tax code is 1000L and she is paid monthly, that means she can earn approx £833 each month without paying tax, then 20% tax on any earnings above £833. If the code is cumulative, then the tax will be worked out throughout the year so that it is correct by April 2015.

So, for talking's sake, let's say by the end of August, her earnings in the year so far have been £9500. August is the fifth month of the tax year so 833 x 5 = 4165 allowances approx. So, 9500 - 4165 x 20% = £1067 tax (approx).

Then, let's say she earns £575 in September so that takes her total income in the year so far to £10075. September is the halfway mark so she'll have 5000 allowances so far. £10075 - 5000 x 20% = £1015 tax. So, based on these figures, in the wage at the end of September she a) wouldn't pay any tax and b) would get £52 refunded to her via her wages because she has overpaid tax so far (she had paid £1067 so far but is only due to pay £1015 so gets the difference back). These are only very rough figures of course but this is the sort of calculation that will continue every month to ensure that her tax is correct by the end of the year. You can work out a rough estimation of the tax due each month by simply establishing how many allowances you've got at that point in the year.

Tinkysmith71

Hi there,

I was employed for 20 years, made redundant, had a few months off, worked a 6 month contract, had a couple more months off and have now for the last 14 months been self employed working two days a week in consultancy. If I don't have a tax code now, how do i check that tax I've paid over the last few years is correct?

hirtes

I started my first job 8 days before the end of March (I had no earnings in the 2013/14 tax year) and was told by my employer that as I had started just after their "cut off point" for payment of wages that month, I would not receive any pay (including a small sign on bonus) until the end of April. When my pay slip arrived, there is nothing to indicate the earnings for March, and I have therefore been taxed on the whole lot in April, in the new tax year. I feel that I should be able to claim the tax paid for earnings in the 2013/14 tax year back but my employers say that it is irrelevant and it is when the wages are paid that determines if you pay tax. HMRC say that I can claim it back if my employers issue a statement showing the earnings separately for the previous tax year, whcih they will not do. Who is right please???

ska1982

Hi everyone!
I am trying to work out why I am on tax code 842L and have been for a while. Wondering if I need to ring up about it.
What could be reducing my personal allowance down?
I have just changed jobs from £12500 to now £19500, still on the same tax code. As far as I can see I don't get work benefits. I pay into a government pension, but I thought that was 'tax free', comes straight out of my salary.
So confused! I keep reading the allowance is £10000, am I missing out and overpaying?

Xen6

I am a student and had a summer internship (working for 10 weeks) totalling £3400, however I was taxed £262. This is all my earnings for the year. The tax code on the payslip is 1000L.
Do I need to do anything to reclaim or will the money just come back to me at the end of the year?

zygurat789

Xen6 wrote: »

I am a student and had a summer internship (working for 10 weeks) totalling £3400, however I was taxed £262. This is all my earnings for the year. The tax code on the payslip is 1000L.
Do I need to do anything to reclaim or will the money just come back to me at the end of the year?

Look at your tax code again, I think you will find it is 1000L wk1 (or maybe M1 if you were paid monthly.
This is a holding code which ensures that you do not underpay tax, it is given to all who are starting their first job and effectively means you massively overpay tax as you have done.
Will the money come back to you at the end of the tax year, well as I write there is a flock of pink pigs flying overhead, you should claim it back by sending your P45, you do still have your P45 don't you Xen6? But you can't actually say that you won't earn any more until after the end of the tax year, 5 April 2015.

chrisbur

If you complete a P50 form you can declare that you will not have any taxable income for the rest of this tax year and any rebate due will then be based on the figures from the P45 as if they were year end figures.

idrewuk

I wonder if you could help me figure something out.

I was made redundant from my last role and received a payment which was under the taxable threshold, plus my three month notice period paid in one sum.

Fast forward a month later and I've started my new job. I got my P45 across to my new employers on my first day and as far as I know it was processed correctly.

I've had two letters from HMRC to tell me my new tax code for 14-15, and 15-16 is D0.

I was paid today and, lone behold, I've been taxed a considerable amount and my take home pay is much lower than I'd anticipated. I read up and it looks like the D0 is mainly used when somebody has a second job. Which I don't have.

I'm guessing a call to HMRC will help clear this up? And I can get back what I've overpaid?