Tax refund if reducing salary mid-tax year

leicsmark

Hello,

A relative has reduced her salary midway through the tax year (by a third), she will still be in the same basic tax rate.

Am I right in thinking that she will have now paid too much tax on the income earned before the change (as her final yearly salary will be closer to the threshold?). She has gone from 22k to 15k.

If yes, will that end up as a refund on her payslip or as some sort of adjustment to the tax code?

Thanks everyone.

chrisbur

leicsmark wrote: »

Hello,

A relative has reduced her salary midway through the tax year (by a third), she will still be in the same basic tax rate.

Am I right in thinking that she will have now paid too much tax on the income earned before the change (as her final yearly salary will be closer to the threshold?). She has gone from 22k to 15k.

No she will have paid the correct tax on her earnings so far, her tax will reduce as her earnings have reduced but no rebate will be due unless for some reason her gross falls below the monthly tax allowance; about £675 assuming tax code of 810L