Tax Help

mattybully

Im usually really good with tax but im really stumped on this one.
Without disclosing my wage i usually get taxed around 18% of my gross monthly wage. This is based on a tax code of 227T which hasn't changed at all. (Tax code is due to Company Car and Fuel benefit along with medical insurance)
However this month I have just received my bonus and i have been taxed 28% of my Gross pay.
Can someone explain why I would experience a change like this even though my tax code hasn't changed. The only thing i can see is that M1 was added to the end of this last month and still stands there this month

jem16

mattybully wrote: »

However this month I have just received my bonus and i have been taxed 28% of my Gross pay.

Without actual figures we could only hazard a guess. Your bonus may have pushed part of your wage for that month into the next tax bracket so you are paying 20% on some of it and 40% on the rest.

The only thing i can see is that M1 was added to the end of this last month and still stands there this month

I would be more concerned as to why you are now not on a cumulative tax code as any overpayment in tax die to the bonus would not be refunded automatically.

Do you know why the M1 has been added?

mattybully

jem16 wrote: »

Without actual figures we could only hazard a guess. Your bonus may have pushed part of your wage for that month into the next tax bracket so you are paying 20% on some of it and 40% on the rest.



I would be more concerned as to why you are now not on a cumulative tax code as any overpayment in tax die to the bonus would not be refunded automatically.

Do you know why the M1 has been added?

I have no idea why the M1 has been added. It just appeared in the last 2 pay slips.
My usual Gross is £2300 however this month it was £6000

chrisbur

Are you sure that your code before the last two months was the same. The usual reason for a month 1 code to be used during the year is because the code has been put down. This avoids a large tax deduction when it is first applied.

The percentage of your gross that you pay in tax allways increases as your wage increases if you have a positive tax code. In your case it has also increased as you have gone into the 40% band. If your tax code really has been 227T all year then contact the tax office to get the month 1 removed and you will get some, possibly all of the 40% tax converted to 20%.