First payslip, no tax - correct?

drjones

Morning all,

I recently started a new job after previously being a student. I've jut got my first payslip and I haven't been taxed. I'm on the 747L tax code, which as far as I understand is an emergency code given if a P45 hasn't yet been received from the previous employer (I filled in a P46 when starting) and ensures I get the personal tax allowance. Does this mean then that it is correct that I haven't been taxed so far, As I haven't earned more than the personal allowance yet this year? And that in a few months I'll be put on a non-emergency tax code and it'll all pay itself correctly?

Or is this a balls up that I need to contact the taxman about?

Cheers.

qpop

747L isn't an emergency tax code, it's the standard.
BR is an emergency tax code
or 747M1W1 (from memory)

It really depends what money you're on, and what you're expected to earn overall for the year.

If your total income, when added to your previous income, won't exceed £7,475 by April 5th, you won't have to pay any tax.

totebag

747L is not an emergency tax code, it is a single persons code giving you the basic tax free earnings allowance. 747L means that you can earn £7470 before you pay tax. This is about £143 a week. As you were a student earning nothing previously you have all the weeks from the start of the tax year to use, so depending on what you earn, you won't pay tax for a while yet.
You will still have to pay N.I. though. They get you one way or another!

qpop

totebag wrote: »

747L is not an emergency tax code, it is a single persons code giving you the basic tax free earnings allowance. 747L means that you can earn £7470 before you pay tax. This is about £143 a week. As you were a student earning nothing previously you have all the weeks from the start of the tax year to use, so depending on what you earn, you won't pay tax for a while yet.
You will still have to pay N.I. though. They get you one way or another!

Class 1 N.I is payable from the Primary Threshold (£7,225PA for '11/'12)

Between £5,304 and £7,225 NI benefits are accrued but contributions aren't paid.

http://www.hmrc.gov.uk/paye/rates-thresholds.htm

CLAPTON

7475 is the standard tax free allowance for the tax year

it is allocated, however on a monthly (or weekly if paid weekly) basis and is accumulated over the year

so each month you get 7475/12 = 623 per month
if you don't use the allowance one month it is carried over to the next

so if e.g you are paid monthly and started work in October you can earn 623 x 7 (months) = 4,361 before being taxed


so depending upon your salary you will probably pay no tax for a few months

CLAPTON

qpop wrote: »

Class 1 N.I is payable from the Primary Threshold (£7,225PA for '11/'12)

Between £5,304 and £7,225 NI benefits are accrued but contributions aren't paid.

http://www.hmrc.gov.uk/paye/rates-thresholds.htm

this isn't appropriate for PAYE employees

PAYE pay NI if they earn more than 602 per month at a rate of 10.4% or 12% depending whether they are in an opted out pension scheme

qpop

CLAPTON wrote: »

this isn't appropriate for PAYE employees

PAYE pay NI if they earn more than 602 per month at a rate of 10.4% or 12% depending whether they are in an opted out pension scheme

...which is what I said, and the link provided states

CLAPTON

qpop wrote: »

...which is what I said, and the link provided states

I'm sure the OP now knows the full facts and the difference between accumulative tax and non-cumulative NI

AirlieBird

qpop wrote: »

747L isn't an emergency tax code, it's the standard.
BR is an emergency tax code
or 747M1W1 (from memory)

totebag wrote: »

747L is not an emergency tax code

Not relevant to the OP here, but worthwhile to correct these incorrect statements for other people visiting this tread: 747L is the emergency tax code which can be operated on a cumulative or non-cumulative basis; it is also the standard tax code for people under 65. As I assume the OP stated this was their first job this year you will have been placed on a 747L cumulative tax code.

As an aside, why have we seen an increase in tax posts on the savings board lately?

itrade

YOu are not eligible for income tax unless you earned over £6k in you first pay packet.

thenudeone

itrade wrote: »

YOu are not eligible for income tax unless you earned over £6k in you first pay packet.

What a load of rubbish.

If you have standard single person's tax code; and start work in October, and have never had any taxable income in that tax year, then the maximum you could possibly earn in the first month before paying tax would be 7475 / 6 mths = £1245.83 per month

But without a P45 from a previous employer it's much more likely that you will only get 7475/12= £622 per month (at least initially)