First payslip, no tax - correct?

qpop

Common tax code letters and what they mean


Letter Reason for use L For those eligible for the basic Personal Allowance - 747L for the 2011-12 tax year. It is also used for 'emergency' tax codes (read more in the section 'If you're on an emergency tax code')

If you're on an emergency tax code

Sometimes your employer or pension provider will have to use an 'emergency' or 'special basis' code until HMRC has worked out what your tax code should be. This can happen if you start a new job and don't have a P45 for example. While you're on an emergency code you'll get the basic Personal Allowance - this may or may not be right for you. Once HMRC has details of your previous income and tax paid for the tax year, they send your employer (and you) your full (correct) tax code. Your employer will deduct the tax in future and refund any overpaid tax. That’s why it’s very important that you give HMRC any information they ask you for.

source: http://www.hmrc.gov.uk/incometax/codes-basics.htm


The "L" after the number doesn't denote that the tax code is emergency, whatsoever.


I've had a ***L tax code since I started working.


To the OP: the link above provides a complete and accurate description of the way tax coding works. Better to read the HMRC information and make up your own mind, rather than pay any attention to forum members on here squabbling over the intricacies of the UK tax/coding system.

CLAPTON

thenudeone wrote: »

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)

actually October is the 7th month

if he correctly fills in the P46 then he should start with a 747L (cumulative ) taxcode immediately

drjones

CLAPTON wrote: »

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

Thank you (and Totebag) that answers my question exactly. Looks like I'll get roughly 2 months tax free than, that's a nice surprise

drjones

AirlieBird wrote: »

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

My apologies, I wasn't paying adequate attention when I posted this!

drjones

qpop wrote: »

source: http://www.hmrc.gov.uk/incometax/codes-basics.htm


The "L" after the number doesn't denote that the tax code is emergency, whatsoever.


I've had a ***L tax code since I started working.


To the OP: the link above provides a complete and accurate description of the way tax coding works. Better to read the HMRC information and make up your own mind, rather than pay any attention to forum members on here squabbling over the intricacies of the UK tax/coding system.

Cheers of the link, I did Google and ended up here http://www.hmrc.gov.uk/incometax/emergency-code.htm , my assumptions came from quick skim through of that page.

AirlieBird

drjones wrote: »

My apologies, I wasn't paying adequate attention when I posted this!

No need to apologise. I just wondered if there was an erroneous link somewhere that was pointing to this board for tax questions instead of the tax board.