Help Request, I'm Confused on how I can work out if I have under or over payed my Tax

matt.j_3

Hi All,

I am looking for some advise from anyone who has checked the Tax they have paid over the years. I have just seen Martin Lewis on Daybreak and thought that it was something I should do.

But, I am a little confused on how to I go about this. I understand where to find my tax code via my pay slips but this where my understanding stops due. This is my situation.

I have all my pay slips & P60's since I was an apprentice at 16 (1996). So, I have all my 2004/2005 to the current 2010/2011.

I worked at my first company from Aug 1996 - Jan 2007. (so from 2004 onwards) within which I had a number of pay rises from job promotions throughout those years. I paid into a company pension scheme and the only allowance I ever had above salary was being paid 40p per mile if I used my own car for company business, which I understand is tax free and not counted in an annal salary calculation. I did get small annual bonus's some years.

In Jan 2007 I changed jobs but left in May 2009 for my current job. Within this job (Jan-07 to May-09) my salary, according to my pay slips increased twice from the original negotiated starting salary. I didn't pay into the company pension, but I did have to use my own car to travel for work which I was paid 40p a mile for. I did get annual bonus's some years.

In May 2009 to present day I have entered into my 3rd company. My salary has remained constant. I drive a lot for my job but do not get a company car. I get 40p then 25p allowance for all miles covered, which as I can see from my expenses report, shouldn't be taxed. I do not pay pension via the company, but I did get a bonus in Dec 2009, and Dec 2010.

So, my question really, is, how do I go about checking whether I have paid the right tax level or not as I see there are many changes within my PAYE circumstances? I am confused on the basis that I have had pay rises during a tax year (which I assume is April to March). Each pay rise with the same company has changed my tax code. I've moved jobs mid tax year which again change my tax code, plus I have had taxable bonuses, (not much, only £500 etc, no bankers bonus) but they do get taxed.

All in all, I reckon I have over paid or under paid my tax due to the amount of changes. So, as this excellent website suggests, I can check my tax from the 2004/2005 tax year and onwards to see if I owe or am owed money. But, how do I go about it?

I thought about plotting my salary from April 2004 onwards, noting the tax band, including the point of change and bonuses, for each tax year to see what changes happened and when so that I can see my annual total salary per tax year on one page.

I thank you for any advise you can offer.

Regards
Matt

dzug1

You may be trying to complicate things too much. You really need only look at the P60 for each tax year and see if the tax code then is correct and on the right basis. If it is any 'errors' during the year will have been corrected.

I realy don't understand though why your tax code changes when you have a pay rise or change jobs.

CLAPTON

if you only have one job at a time then broadly speaking, if your tax code is correct then it's likely that your tax for the year is correct
expense can often create difficulties but yours seem straightforward ... presumably 40ppm for the first 10,000 then 25ppm?

so start with your last P60 and check that
... post up the figures here and we can comment...

matt.j_3

dzug1 wrote: »

You may be trying to complicate things too much. You really need only look at the P60 for each tax year and see if the tax code then is correct and on the right basis. If it is any 'errors' during the year will have been corrected.

I really don't understand though why your tax code changes when you have a pay rise or change jobs.

Hiya,

Thanks for your reply.

I am most probably complicating it way to much LOL.

I have no idea way it goes up, but that is down to my understanding of it all.

Matt

CLAPTON

matt.j wrote: »

Hiya,

Thanks for your reply.

I am most probably complicating it way to much LOL.

I have no idea way it goes up, but that is down to my understanding of it all.

Matt

just post up the P60 figures ..gross pay, tax paid, taxcode

matt.j_3

CLAPTON wrote: »

if you only have one job at a time then broadly speaking, if your tax code is correct then it's likely that your tax for the year is correct
expense can often create difficulties but yours seem straightforward ... presumably 40ppm for the first 10,000 then 25ppm?

so start with your last P60 and check that
... post up the figures here and we can comment...

Thanks for your reply.

Yeap, I've only ever had one job at a time, no multiple incomes, and with expenses, it is that 40ppm, then 25 ppm over 10,000. Which to be honest, only really comes into play in the 2009/2010 tax year as previous years is very negligible.

I'll have to have a look at my P60's to understand what they are saying as I don't really understand them. Cheers.

Matt

matt.j_3

CLAPTON wrote: »

just post up the P60 figures ..gross pay, tax paid, taxcode

A Flavor

2009 = 609L, 31188.75, 5017.80
2008 = 527L, 29965.02, 5163.10
2007 = 508L, 29124.99, 5029.70
2006 = 494L, 25691.85, 4312.44

CLAPTON

matt.j wrote: »

A Flavor

2009 = 609L, 31188.75, 5017.80
2008 = 527L, 29965.02, 5163.10
2007 = 508L, 29124.99, 5029.70
2006 = 494L, 25691.85, 4312.44

for tax year ending 2009 the normal tax code would have been 603L
so you seem to have a small adjustment in your favour.. you will need to look at your notice of coding for that year to see why

again, for the tax year ending 2008 the normal tax code would have been 522L; again you have a small adjustment in your favour

similarly for the other years
otherwise your tax seems about correct

as an example for year ending 2009
on gross 31188
tax on a normal code 603L would have been
6039 tax free
then 20% tax on 31188-6039 = 20% of 25149 = 5,029

but on your taxcode of 609L
then you get 6099 tax free
then 20% on 31188-6099 = 20% of 25,089 = 5017