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40% Higher Tax Bracket. Will this affect me?

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  • Gambler
    Gambler Posts: 3,283 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Combo Breaker
    my basic salary is less than £30K. But because I have just had a backdated payrise and also some overtime pay, my gross for the month of April was £3254.

    I have been charged more tax than I expected so i assume the tax is worked out as

    gross monthly pay £3254 x 12 = £39,048

    so the IR thinks I earn £39K (I wish!!)

    Will my tax be corrected next month or do I have to wait until the end of the year?
  • Paul_Varjak
    Paul_Varjak Posts: 4,627 Forumite
    Part of the Furniture 1,000 Posts Photogenic Combo Breaker
    Gambler:

    The taxman uses tax tables to work out any tax due. We have only just started a new tax year so it looks to the taxman that you are earning a lot.

    Had you got these payments later in they year it probably would not have taken you (temporarily) into a higher tax bracket

    However, over the next few months it should even out OK and you will not have to claim any 'rebate'.
  • cash99
    cash99 Posts: 274 Forumite
    Part of the Furniture 100 Posts Combo Breaker
    Gambler

    If you have a cummulative tax code then the extra tax will be returned to you next month. Your gross pay year to date will then be £3254 + 2500 - an annual rate of £30754, well below the higher rate limit.

    Your tax code is cummulative if it does not have WK1 or Mth1 after it.
    if i had known then what i know now
  • isasmurf
    isasmurf Posts: 1,998 Forumite
    Part of the Furniture 1,000 Posts Name Dropper Combo Breaker
    cash99 wrote:
    Your tax code is cummulative if it does not have WK1 or Mth1 after it.
    Ah, so I guess that's what the !!! after my tax code stands for. That's been puzzling me for months.

    Edit: The profanity checker doesn't like that! The !!! is C U M (without the spaces)
  • nmbash
    nmbash Posts: 73 Forumite
    donsaini wrote:
    ...however also remember that you can 40% tax relief on all pension contributions. also 40% relief on any tax deductible items needed for work

    also can you add any tax credits to your tax code

    hope that helps

    understood all the above, then got lost about the 40%tax relief on pension.

    Is this automatically done via payroll ?

    I normally have to fill in a tax return to include my PD11 benefits, but have never included anything about my pension.

    Help appreciated. This is a Great site.

    .... Ignore above - found answer on another thread - What should a P60 show? re pension etc
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