Confused about emergency tax refund

MilK13

Hi there,

Today I received my tax refund quote of £400. I had initially asked for a quote 5 weeks ago and was told it would be a much higher £730.

The change was apparently due to the fact that I had earned more since my last pay slip and so therefore wasn't entitled to as much.

I will explain my situation and if anyone can shed some light I would be very very happy :T.

I started working in the UK last August (2011). Initially I freelanced, under the employment of an Umbrella Company. Constantly feeling as if I was being taxed too much, I left them to try another Umbrella Company. My P45 from them stated:
Total Pay = £2838.37
Total Tax = £355.60

I joined another Umbrella Company in October, who discovered I had been on a emergency tax code (647 L) and had therefore not been receiving my tax-free allowance. I December I was offered a fulltime position so chose to leave the 2nd Umbrella Company. P45 stated:
Total Pay = £5420.78
Total Tax = £858.80

Initially I told my new payroll department that I was on an emergency code, but they just had me fill out a new P45 and gave me a new tax code (647LM1). I was told that usually, the employer would reimburse the money I had lost, but because I had changed employers twice, I was told that I would receive every penny back in my tax refund.

My P60 End of Year Certificate states:
Total Pay = £5967.96
Total Tax = £869.20

Clearly £400 does not seem enough. While I was freelancing, some weeks my before tax pay would be £900 but I would receive only £500. I had friends who had started working around the same time and were paying hardly any tax, because they were able to take advantage of the tax free allowance. I never got this, so surely I am entitled to that money now??

I know this is a long post but if anyone can help clarify things for me I would be so thankful. Surely there must be a method in my madness! :eek:

Thanks

McKneff

How much money did yu earn in the whole year, (I presume we are talking about the tax year 2010/2011.

Other peoples tax status is irrelevant so dont cloud the issue thinking about them. Taxation is personal to you.

Murdina

When you start a job you must give new employer form P45 from last job. He then uses the tax code on that and the pay and tax on that to work out what tax you pay in the new job.

If you do not have a P45 you fill out a P46. Then depending on what answers you give one of 3 codes may be applied - which last year were 647L, 647 M1 and BR. 647L means you will get the basic personal allowance or tax free amount of 6475.

HMRC should in due course perform a reconciliation and based on that you would get a refund for 2010/11. If you want to try and speed that up then we need as stated above to know your total income for the year.

Employer can only operate either the code on your P45 or one of the default codes (there is a new one of these now 0T). If you think your tax code is wrong ring your tax office. Make sure they are aware of all the jobs and income sources you have.

CLAPTON

if you are saying that your total gross pay was 14,225
and you paid 2,082 in tax

then you have paid too much tax as you should have paid about 1,550

you need to speak to the HMRC

(and by the way you didn't fill in a P45 you filled in a P46
and in relation to your first job 647L is a standard rate tax code .. you were probably on 647L M1 )

MilK13

Thank you everyone.

CLAPTON, you're correct, my total gross pay was 14,225
and I paid 2,082 in tax. So is the £400 she quoted correct? It just doesn't sound like enough.

Also, I'm now confused as to why the Umbrella Companies told me I was on an emergency tax code when I wasn't? Does anyone know what the 'M1' means on the end?

Thanks

CLAPTON

reread you own posts

your reference to 400 isn't very clear

many payroll people don't actually understand tax

M1 means that you are paid on a non cumulative basis; that is although you are give a tax free allowance of 6475/12 each month. you don't gain the tax free allowance for April thru August

anyway the important thing is that you contact the HMRC and get the overpaid tax back.

also check your current tax code is 747L (with no extras like M1)