Please can someone advise??

notgotenough£

Hi I hope someone can help as we can't get through to the Tax Office after numerous attempts!

We are a bit confused about my husbands salary and the tax he pays. The situation is this:

Basic Salary - 2010/2011- £26750, 2011/2012 - £28,999
Annual Bonus 10% - 50% of his salary for 2010/2011 he got a really good bonus of nearly 50% which was about £13,000. (just point out he isn't a banker before we start getting hate mail!!).
So this took his total earning for the year £39, 750

He has now been given a payrise which takes his annual salary £28,999.

Now we always thought that you had your tax free PA, then up to £40,000 was at 20% and anything over that £40,000 is 40% tax. It seems this is wrong and its anything over £35,000 is 40%.

He has just had his first payslip through and he has been charged £200 more in tax than the previous month???? I don't understand esp when the PA's have all gone up to the budget? So basically the extra he is earning from having a a payrise is being taken off him!

Is this right? His tax code is 362L on his payslip and 344L on letters from the inland revenue.

I don't understand how they can put him in the higher tax band before he actually knows what he will earn, for eg he could get a 10% bonus which would mean his earning for the year are under the £35,000.

I know all this doesn't make much sense if only you could actually get through to the tax office:mad:

Any explanations would be of help.. thanks

pipscot

notgotenough£ wrote: »

Hi I hope someone can help as we can't get through to the Tax Office after numerous attempts!

We are a bit confused about my husbands salary and the tax he pays. The situation is this:

Basic Salary - 2010/2011- £26750, 2011/2012 - £28,999
Annual Bonus 10% - 50% of his salary for 2010/2011 he got a really good bonus of nearly 50% which was about £13,000. (just point out he isn't a banker before we start getting hate mail!!).
So this took his total earning for the year £39, 750

He has now been given a payrise which takes his annual salary £28,999.

Now we always thought that you had your tax free PA, then up to £40,000 was at 20% and anything over that £40,000 is 40% tax. It seems this is wrong and its anything over £35,000 is 40%.

He has just had his first payslip through and he has been charged £200 more in tax than the previous month???? I don't understand esp when the PA's have all gone up to the budget? So basically the extra he is earning from having a a payrise is being taken off him!

Is this right? His tax code is 362L on his payslip and 344L on letters from the inland revenue.

I don't understand how they can put him in the higher tax band before he actually knows what he will earn, for eg he could get a 10% bonus which would mean his earning for the year are under the £35,000.

I know all this doesn't make much sense if only you could actually get through to the tax office:mad:

Any explanations would be of help.. thanks

Have you put the figures into a PAYE calculator? and if so - are they different to what he actually received?? [I make the tax payable on £28999 to be approx £422 based on the 362L tax code]

jem16

notgotenough£ wrote: »

He has just had his first payslip through and he has been charged £200 more in tax than the previous month???? I don't understand esp when the PA's have all gone up to the budget? So basically the extra he is earning from having a a payrise is being taken off him!

You will need to clarify for anyone to help.

Last month - what tax code was used and what was the gross monthly payment and how much tax was taken off.

This month - same questions as above.

Is this right? His tax code is 362L on his payslip and 344L on letters from the inland revenue.

What does his P2 coding notice say his tax code for 11/12 will be?

I don't understand how they can put him in the higher tax band before he actually knows what he will earn, for eg he could get a 10% bonus which would mean his earning for the year are under the £35,000.

They don't put him in any tax band. He pays tax on the amount he is paid each month.

For example;

Month 1 - first £622.92 ( if you were entitled to the full £7475 which it appears he is not going by his tax code) is tax free. (£7475/12)

Next £2916.66 at 20% ( £35,000/12)

and so on.

notgotenough£

Hi
Thanks for the answers.

Yes I did put the figures into the tax calculator and it all seemed about right. I just don't understand how his salary has gone up by £200 a month, his tax free allowance has gone up, but the tax he has paid this month has gone up from £255 per month to £422 per month?? Am I missing something?

jem16

notgotenough£ wrote: »

Hi
Thanks for the answers.

Yes I did put the figures into the tax calculator and it all seemed about right. I just don't understand how his salary has gone up by £200 a month, his tax free allowance has gone up, but the tax he has paid this month has gone up from £255 per month to £422 per month?? Am I missing something?

Until you give us the figures I asked for no-one can tell you the answers.

dawyldthing

put in the full yearly amount in here:

http://www.listentotaxman.com/index.php

on the 39750 he would have paid £6,455.00 tax and £3,902.64 National insurance leaving £565.24 per week

on 43500 (if he gets the full bonus again) his tax would be £7,410.00, national insurance £4,251.04 and he would come out with £612.29 per week after tax. Basically your better off just averaging it out over the year

browniej

notgotenough£ wrote: »

I just don't understand how his salary has gone up by £200 a month, his tax free allowance has gone up, but the tax he has paid this month has gone up from £255 per month to £422 per month?? Am I missing something?

The most obvious answer is that his tax code has gone down.

Post the figures that jem16 asked for.

jem16

notgotenough£ wrote: »

Is this right? His tax code is 362L on his payslip and 344L on letters from the inland revenue.

His tax code is lower than the normal tax code of 747L. If his tax code was higher than 326L last tax year then that would account for the higher tax this month.

However without those figures we are only guessing.

property.advert

Looks like he may have underpaid tax and is having it claimed back this year through his tax coding.