Income Tax & NI

Stilettoqueen

Hi Guys

I wonder if someone may be able to help me. I've recently started a new job (been here 8 weeks) and have passed over my P45 etc.

Out of curiosity I checked how much I would take home after tax using the income calculator on this site, and the difference between the figure on the site and waht I receive in my payslip is £124.00! Overpaying!!

Do you think I am on the wrong tax code? On my pay slip it says 'BR' next to tax code so I am assuming this is 'Basic Rate'.

I dont get any tax credits or anything, just get the standard tax deducted and NI.

Thought I'd ask for advice here rather than make myself look like a complete idiot infront of the new employer! :rotfl:

noh

Assuming this is your only income from employment then your tax code is incorrect.
BR is, as you say basic rate, and means that 20% tax is being deducted from all your income.
You are being taxed as if you are working at a second job.
Your payroll department hasn't for whatever reason obtained your correct tax code from HMRC. It should be something like 747L.

CLAPTON

if you have been there 8 weeks then you need to check your details for 2010-11 tax year as they are likely to be incorrect too

Stilettoqueen

Thanks guys!!

I've just done a quick check and it seems that they have just taken 32% off my gross salary (12% NI and 20% Tax), and then divided the remaining between the 12 months. But shouldnt I have an allowance of £7475 on which I dont pay tax?? I thought I got that tax free and then paid tax and NI on the remaining part of my salary.

Any

Stilettoqueen wrote: »

Thanks guys!!

I've just done a quick check and it seems that they have just taken 32% off my gross salary (12% NI and 20% Tax),

Yes, that is what happens on BR... and unless you have any other income such as job or pension it is wrong. You do get PA of £7475 tax free, this is divided by 12 so you get 1/12 of this amount every month (suposing you don't get any taxable benefits such as company car?).

Is this on your latest payslip? ie mth 1 of tax year 2011/12? Or on the old one...

What was your tax code on the P45?

If different from BR - ask your payroll department why you were put on BR, even though you put in your P45. Did you put the P45 in before the first payroll processing?
And if this is latest payslip, ask them why you are still on BR even though it is new tax year.

It seems someone have over looked it. Once they change it the tax for this tax year (the excess paid) will be refunded in the next pay packet.

Stilettoqueen

Update!!

Rang HMRC, seems that my last employer (of eight years) changed my tax code to Basic Rate for some reason. Turns out I have been on Basic Rate for 2 years and am now due a rebate of around £3000, and £280 from the last two months with my new employer.
Need to wait for my P60, then write to the HMRC and hopefully will receive a cheque six weeks later.

Thanks so much for your help guys, I would never have even thought to check the tax code, always assumed the employer had it correctly set up! x

Any

Stilettoqueen wrote: »

Thanks so much for your help guys, I would never have even thought to check the tax code, always assumed the employer had it correctly set up! x

NEVER assume this. Tax code change with changes in circumstances and these might have absolutely nothing to do with your employer, therefore your employer most of the time only does what they are told by HMRC without questioning it (and sometimes they just make a mistake). And any mistakes are just carried from employer to employer (such as happened here)... Because it is not their job to question your private tax affairs.

Your tax affairs are only your responsibility.

Glad to hear you are sorted.