How do tax code work?

appolons

Can someone help me understand this
So, my tax code is 747L and my tax-free allowance is £7475 in a year, but all this tax year 2011/2012 i have paid tax every week, so where is my tax-free allowance? :cool:

CLAPTON

your tax free allowance is 7475 per annum or 144 per week

so lets say you are paid 200 per week gross

so tax is 20% of (200-144) = 20% of 56 = £11.2
and NI is 12% of (200 -139) = 12% of 61 = £7.32

just put your own figures in

PlutoinCapricorn

You don't keep everything you earn then start paying tax only when you have earned £7,475!

The total amount of tax you will pay in a whole tax year, based on your salary after the personal allowance is deducted, is divided into 12 monthly payments. So you start paying tax immediately. There may be slightly odd amounts in April, as the allowance changes.

McKneff

No reference to the OP so please dont take offence.

Why on earth do they not teach basic things like this in schools,as well as a trillion other things to do with basic life skills.

appolons

thanks for answers!!

oliverW_2

appolons wrote: »

Can someone help me understand this
So, my tax code is 747L and my tax-free allowance is £7475 in a year, but all this tax year 2011/2012 i have paid tax every week, so where is my tax-free allowance? :cool:

I used this little tool on the MSE forums ***.moneysavingexpert.com/family/check-tax-code