Tax on backdated Pay

immy257

Please help my query

I have a commulative salary this year is 45875 in 10-11.

i.e. 33075 2010-11 Salary
and 12,750 backdated pay from November 2008 to March 2010. I received this settlement in April 2010.

I understand that I have to pay

0% on 6475£ and

20% on 37400

and the rest £2000, do i have to pay 40% ? Although the excess was a part of previous years?

Please answer.

Thanks

dzug1

Backdated pay is normally taxed in the year it is received, not when it was due.

When did you receive it in April? Up to the 5th it will be last year's pay and yes you will pay 40% on part of it. 6th onwards then it falls into this year's pay and the tax depends on pay this year. Still potentially 40% on part though

immy257

I received in April 20t 2010.

I received my p60 now and final salary is over 45k which includes the backdated pay of 13k.

its a bit unfair to pay more tax on the salary which should be taxed in last tax year..

jem16

immy257 wrote: »

I received in April 20t 2010.

I received my p60 now and final salary is over 45k which includes the backdated pay of 13k.

its a bit unfair to pay more tax on the salary which should be taxed in last tax year..

Did you make £2000 or more pensioon contributions?