Help with tax please

Kiay

Please can anyone tell me the calculations to work out what my husbands national insurance contributions should be? I do not want a link to calculators as I need to see how the working out is done if possible please.

We are currently having alot of bother with my husbands pay. For the past three months they have paid him alot more than usual (which we are not spending as cannot see how it could be ours) but his payslips are really complicated, they include travel and subsistence, london weighting, health club and sports council memberships etc etc. We have been trying to get answers from the pay department but what they appear to be saying is that because the expenses take him over the 40% threshold then they are paying even more to counteract the extra tax so we dont lose out. I could understand this, but I do not see why his NET pay has been affected- surely that should remain the same? Currently his annual salary is 24364. He has bought home 1944 a month for the last three months. That cannot be right yet they are adamant it is. Its getting quite stressful as this extra money is going to affect tax credits- and its not even ours to keep

Details on his payslip are:

Before he started getting expenses paid through his wage slip

Gross salary 2030.33
London allowance 225.00

Deductions
Pension £78.94
NI £166.38
PAYE £327.40
Healthclub £15
Sports council £3.60

Net pay £1664.36

In April this year

Gross salary 2030.33
London allowance 225.00
Travel and subsistence 2619.88

Deductions:
Pension 106
NI 335.20
PAYE 1064.36
Healthclub 15.00
Sports 3.60
Travel &S 1684.39

Net Pay = £1666.66

(They pay the expenses as a seperate payment and not through his payslip even though they are shown on there)



Since May this year

Gross pay 2030.33
London allowance 225
Travel and subsistence £3147.48

Deductions
Pension 106
NI 345.76
PAYE 1275.57
Healthclub 15
Sports 3.60
Travel & S 1712.00

Net Pay £1944.88!?

I dont understand, we have been contacting them for three months and they say its because they are grossing up the travel so that when the tax is deducted we wont lose out... but we shouldnt be being better off?? I really dont understand whats changed and they are adamant they are right!?

Can anyone please help?

jem16

Kiay wrote: »

I dont understand, we have been contacting them for three months and they say its because they are grossing up the travel so that when the tax is deducted we wont lose out... but we shouldnt be being better off?? I really dont understand whats changed and they are adamant they are right!?

Can anyone please help?

What should your husband be getting for travel and subsistence?

Kiay

The amout he gets in his travel and subsistence bring home is between £1650 and £1750 mark depending on how many weeks were in the month

CLAPTON

usually travel and subsistance are outside the tax system as they merely reimburse business expenses.

is there something different here?

jem16

Kiay wrote: »

The amout he gets in his travel and subsistence bring home is between £1650 and £1750 mark depending on how many weeks were in the month

To me it looks like they are putting it through as part of his taxable pay, then deducting PAYE and NI from it.

As that would take your husband partly into 40% tax bracket and also make him due to pay more NI, they then seem to be paying back that extra tax and NI.

However your husband is only paying 40% tax on part of those expenses and they seem to be refunding 40% on all of it as opposed to 20% on some of it and 40% on the rest.

At least that's what i think is happening.

Kiay

CLAPTON wrote: »

usually travel and subsistance are outside the tax system as they merely reimburse business expenses.

is there something different here?

Apparently since the end of last year it now has to go on to payslips or something to keep HMRC happy?

They are supposed to gross up the amount they put into the T & S payment, so that once extra tax has been deducted he still has the right amount of expense money and also the correct pay. But whatever they have done the last three months has increased the Net. We had this email supposedly explaining it :

The grossing is being correctly calculated. Mr S basic salary is below the 20% threshold (huh??? we arent BELOW it, we are in it?) but the payment of T&S takes his total taxable pay above the 40% tax threshold. In April the normal amount of tax was deducted from his basic salary, in May and susequent months he recieved a refund of tax on his basic pay and then additional tax was deducted on his T7S payment which the company pays on Mr S behalf, so the net increase is an increase in his net pay.

I still dont get it, if they were taxing too much then his net should have taken a hit, he didnt get a payrise at any point- he just started to get T&S in the payslip. I understand the need to increase that payment to cover the extra tax they were incurring but not so that we are paying no tax virtually ourselves? Can you explain in Jem? Is the money ours?

xylophone

http://www.hmrc.gov.uk/incometax/relief-travel.htm
http://www.direct.gov.uk/en/moneytaxandbenefits/taxes/beginnersguidetotax/nationalinsurance/introductiontonationalinsurance/dg_190048

Does anything here clarify? Otherwise, your husband will need to contact HMRC?

jem16

Kiay wrote: »

Can you explain in Jem? Is the money ours?

My explanation - and I have no idea how accurate it is - is this.

Without the expenses, your husband would have a taxable pay of £2176.39pm. This is minus his pension which appears to be taken gross so reduces the tax he pays. If this was paid your husband would pay £300.19 tax and £194.72 NI.

With his expenses (assuming £1750 net) his taxable pay per month has risen to £5296.48 - again minus pension. Tax paid was £1275.57 and NI of £345.76.

So he has overpaid £975.38 in tax and £151.04 in NI which is £1126.42 in total that he's due to make up for loss.

Gross expenses paid was £3147.48. Assuming net expenses of £1750 this would be £1397.48 extra being paid.

£1397.48 - £1126.42 = £271.06.

If you add that to his normal net pay of around £1690.95 you get £1962.01 which isn't far off what he is now getting.

Is it correct? I think he's getting too much but that's only my opinion.

Kiay

I think I understand Jem thankyou- but I do not know why they have started grossing up the expenses so highly? We dont actually pay any of the extra tax, its grossed up to cover it so they are in the wrong and we should just keep squirreling the money away until they realise or someone can confirm whats happening.

The most frustrating thing is the lack of anyone seemingly able to write a letter/email just saying this is what we have done, this is why and yes/no the money is yours/not yours. We are getting passed from pillar to post and not one person can deal with it without referring it to someone else, its the worst pay system EVER. Thankfully come the end of the month he changes positions (although in the same company) and will no longer incur expenses so hopefully everything will be alot simpler!