I do not seem to be paying tax

cutefinger

I found this forum while searching for my taxcode through Google.

Please i need clarification in regards to my new job.

I just moved to the UK as a spouse of a British Citizen in July 2011 and didn't get a Job until last month (October 2011).

In my first week, my cumulative earnings was £284.63 and i was placed on a tax code OT. a tax of £56.80 + £17.47 NI was deducted.

I rang my agency to complain that i think i was paying too much tax and they asked me to fill a P45. I chose the option A (my first job since April).

The following week, i recieved my payslip and only £17.47 was deducted. No tax deducted.

Same thing happened again this week. I rang my agency again and was told that its the right taxcode i have.

I want to ask if this is right as i don't want to be evading tax in the UK as i REALLY want to be a law abiding migrant.

Will appreciate every help i can get in regards to this.

chrismac1

This is correct. You have a tax-free allowance of 7,475 which the payroll system will round to 7,479 so until your earnings between 6 April 11 and 5 April 12 exceed 7.479 there is no tax to pay.

jem16

cutefinger wrote: »

In my first week, my cumulative earnings was £284.63 and i was placed on a tax code OT. a tax of £56.80 + £17.47 NI was deducted.

Tax code OT means that you were given no tax-free personal allowance and all of your earnings were taxed - in this case at 20%.

I rang my agency to complain that i think i was paying too much tax and they asked me to fill a P45. I chose the option A (my first job since April).

You would have been asked to complete a P46 - a P45 is what your employer gives you when you leave.

By not handing in a P45 or completing a P46, this was the reason for the OT tax code.

The following week, i recieved my payslip and only £17.47 was deducted. No tax deducted.

Same thing happened again this week. I rang my agency again and was told that its the right taxcode i have.

Doesn't sound like the correct tax code to me. If it was the correct cumulative tax code, you would have received an automatic refund of the £56.80 that you paid in tax the first week.

What exactly is the tax code? I will assume it's code 747L but is there anything after the code like Wk1?

I want to ask if this is right as i don't want to be evading tax in the UK as i REALLY want to be a law abiding migrant.

Will appreciate every help i can get in regards to this.

You're not evading tax so don't worry.

You have a tax free personal allowance of £7475 which is plit over the whole year. This would allow you to earn £143.75 each week without paying any tax. However by October you are allowed 7 months of tax free allowances and as you haven't worked at all since the start of the new tax year in April, you will get the benefit of those tax-free alllowances which by now amount to around £4025 depending on exaclty what week your pay was for. At the moment you haven't been paid that much so you shouldn't be paying any tax.

What was the week number on your pay slip?

jem16

chrismac1 wrote: »

This is correct. You have a tax-free allowance of 7,475 which the payroll system will round to 7,479 so until your earnings between 6 April 11 and 5 April 12 exceed 7.479 there is no tax to pay.

That makes it sound like you pay no tax until you earn £7479 and then suddenly start paying tax.

Each week or month you receive a part of your tax free allowances.

chrismac1

Yes sorry that was poorly worded, your 7,479 is divided into either 52 or 12 parts depending on whether you are weekly or monthly paid. So as of today, you'd have had 31/52 of it (4,458) if weekly paid and 7/12 (4,362) if monthly paid.

cutefinger

Thanks everyone for all your comments.

Yes i filled a P46 (not P45). The taxcode on my payslip is 747L, it doesnt state if its week 1 or 2 or anything like that. And i was actually refunded the tax that was taken out for the first week when the tax code was OT.

jem16

cutefinger wrote: »

And i was actually refunded the tax that was taken out for the first week when the tax code was OT.

If you were refunded the tax then you are on the correct tax code. You didn't say that though.