Phd and overpaid tax?

timkdavies

Hi all,

Any tax rebate experts out there? I've totally confused myself here...

For the first six months of this financial year I worked and paid tax at the appropriate rate.

However, as of October 2010 I've been a PhD student, with my tax-exempt salary being paid from a research grant. I didn't need to hand over a P45 or any other form, the College just started dishing out my grant to me!

My cumulative earnings from the first six months were around or just above the basic tax-free allowance, so surely I must have overpaid tax? My question therefore is: Do I need to claim for a refund, or will I automatically get a rebate in April?

Secondly, and perhaps not related - I'm not sure - I have earned a small amount through teaching, probably less than £500 in all, over the last 6 months. This has been added to my grant salary on the months I have worked, but how does the tax man know this small part is not tax exempt, and should count as potentially taxable pay?

Any thoughts?

Tim

scottishblondie

You'll need to reclaim any tax at the end of the year. You can fill out an R40 form, or just write a letter to the tax office with the figures etc.

The taxable portion should show up separately - at least it does on my pay slip. Either way, the college should be dealing with it appropriately. If you didn't give them a P45 then they should be taxing it at the basic rate anyway. A quick emali/call to your payroll department should clear things up either way. You will also receive a P60 at the end of the tax year showing any taxable pay.

ceeforcat

Not sure you are correct scottishblondie - a form P50 would be more appropriate if with box 5 ticked and the second box on the right hand side of page 2 if no further taxable income in the tax year. Repayment should come a lot more quickly.

http://www.hmrc.gov.uk/pdfs/p50.pdf

jennifernil

As the OP is presumably still getting work from his Uni, or might get work, he cannot say he is not working right now.

If he had handed in his P45 to the Uni, then would any earnings not have been taxed correctly and a tax refund sorted via PAYE?

Presumably too late to do that now, so he will have to reclaim after 5th April.

jennifernil

OP, some info here......

http://www.hmrc.gov.uk/incometax/overpaid-thro-job.htm

timkdavies

Great - thanks for the advice and the link... I'll have a look at that info and see how I go.

BoGoF

So to clarify, the teaching element is paid to you tax free as well ?

If this is taxable earnings (and it appears so) then the employer will have to notify HMRC off this, usually by submitting a P14 - the HMRC equivalent of a P60 which you should get.

scottishblondie

As far as I can see a P50 would not be appropriate as OP is still working when he does teaching etc at the college. This income is not covered by the same tax free status as the stipend, and so it is taxable income. I would have expected this to show on your pay slips (it is listed separately on mine), but it will certainly be on your P60 at the end of the tax year.

Once you have received your P60 from the college, use that and the P60 from your old job to check how much tax you have paid and work out what you are due back then either write a letter detailing the amount earned and the tax paid, or fill out the R40 form.

Also, next tax year you should register your bank accounts to receive interest tax free with an R85 form seeing as you (presumably) will not have enough taxable income to pay tax at all.

timkdavies

Thanks for the additional suggestions. So, to clarify, I should do the following:

Firstly look at the p45 (or p60 - does it matter?) from my old job and work out 1) what my total earnings were and 2) the total tax I paid on those earnings.

Secondly, look at the p60 from my uni and again work out my total earnings (ignoring my tax-free stipend).

Finally, add the earnings together and write to my tax office with all of this info and state that I've overpaid tax?

jennifernil

First you need to ascertain exactly what your situation is. No point claiming you are overpaid if this is not the case.

Write down what you earned from your previous job, add on what the Uni has paid you, NOT including stipend.

Remember to add any bank interest.

Then work out the tax you should have paid by deducting your personal allowance (usually £6475 for 2010/2011), then calculate 20% on the taxable amount.

Now look at the tax paid in your previous job plus any deducted by the Uni, plus tax deducted on interest taxed at source.

Have you paid too much or too little?

Then either write to them, or, possibly better, fill in the R40 if you have tax to reclaim.

But you need to wait till after 5th April.

If unsure, post the figures here and someone will assist you.

timkdavies

Excellent, thanks so much for the advice.

p.s. Bank interest... I wish! My relationship with my bank works very much the other way around