Tax Codes

katies_mum

Hi, I`m wondering if anyone can help:

My husband worked for same company for 19 years and was made redundant on 4 September.

Upto being made redundant his tax code was 818L

At the end of September he was paid outstanding holiday pay and wages owing etc the tax code used was BR M1 (not sure what this means and why 818L wasn`t used)

He has been lucky and managed to get a job 27.5 hours with a local firm only minimum wage, but its a job they have put him on tax code 810M

Today he has received some outstanding wages from June from the firm that made him redundant (we have been chasing these for months) and they have used code 0T M1 and taken a fair bit of tax off him when he is not earning enough to pay this much.

We are just really confused because as he is now earning minimum wage the amount of tax he has been paying is quite small, surely the tax paid on the wages owing should be minimal?

I hope this makes sense, if anyone can help we would be very grateful. Many thanks.

chrisbur

The normal tax code at the moment is 810L this suggests that there was a small added allowance for something at the old job. This should show on the tax code notice sent each year.
I would assume that on leaving a P45 was issued; has this been handed in to the new employer or if on job seekers benefit was it handed in to job centre?
The tax code 810M sounds like the emergency tax code which is 810L month 1. On the payslip is there a pay to date figure and if so does this equal only the pay in this employment?
I would assume that the late payments were made after the P45 was issued and are not included in the P45 figure, is this correct?
If that is the case then the tax office will not know about these untill after the tax year end when there would allmost certainly be a rebate due.
If the extra tax allowance is no longer due then the tax office should be advised but it will not make a lot of differance to tax paid as only worth about £16 a year (on 20% tax)

katies_mum

Thank you for replying.
Yes a P45 was issued and this was given to his new employer. Yes the pay to date figure is the amount he has been paid by them.

With regards to the payments from his previous employer I would have assumed that they would have calculated his pay before issuing the P45? but might be mistaken (as they have messed up everything they have done so far) the payslip he received this morning for payment tomorrow is in respect of money they owe him from June but was only sorted 3 weeks ago, so that is definitely after the P45.
I think the extra tax allowance could have been for uniform washing, can`t think of anything else, he also has a uniform for this new job as well.
Will we have to tell the tax office of is it something that will be sorted by them at the end of the tax year?
Many thanks, am grateful for you explaining it.

chrisbur

As the P45 is not being used yet I would check with employer on that, perhaps missed the payroll deadline and will be applied next month. Assuming that the P45 has a cumulative code (will have no X at section 6) then should be some tax back or at least reduction when it is applied. You have made no mention of being on job-seekers so I am assuming that he did not recieve any payment, if he did then this will affect the tax position.

You can check if the first payment was included in the P45 by comparing the gross to date figure on the last payslip before that payment was made with the gross on the part 1A of the P45. If they have the same gross then the payment following that is not on the P45.

Not sure if you have to claim the overpaid tax or not; but I certainly would to be on the safe side.

katies_mum

He is due his second pay from new employer tomorrow so will be able to check code applied to his wages and see if its changed from 810M.

He did not claim any job-seekers.

I`ll get him to did out the P45 copy and we`ll check the gross pay to date figure.

I`ll let you know about both. Many thanks.

CLAPTON

tax is all about detail

without seeing the figures it's imposible to say.
However assuming he will earn more than 8105 in the tax year it may well be that

-the holiday pay received in september and taxed at 20% (BR) is correct

-his back wages just received and taxed at 20% (0T M1 ) is correct

-his current code 810M (presumably meaning M1) although technically wrong actually gives the correct tax


if you would like to post the actual figures we maybe could check them

katies_mum

Which figures do you need? is it the total earnings on each payslip?

CLAPTON

basically yes

P45 figures.. gross and tax paid
final salary slip from previous employer figures gross, tax and tax period
how much redundancy pay

again gross and tax for the september payment of his holiday entitle

again gross and tax for his june back pay

his current gross pay and tax

katies_mum

Not got all that info to hand but will get it get back to you. Thank you.

katies_mum

Hi Clapton
Here is the info, hope I have everything its so confusing:

Made redundant on 4.9.2012 (redundancy is being paid over 4 months and he has received 3 instalments so far) he has had no payslips or anything for this just the redundancy figures ages ago.

P45 issued 25.9.2012 and its says
total pay £4770.30
total tax £817.40
tax code at leaving date BR

pay 30.9.2012
which was outstanding holiday pay, wages etc
Earning £1042.68 tax deducted £206.40
NI £49.04
Tax Code BR M1
According to this payslip the Running totals are:
Tax Year to Date
Gross Pay £9743.38
Taxable pay £9742.38
Tax £1402.20
This Employment
Gross pay £4770.30
Taxable pay £4770.30
Tax £817.40

___________________________________________________

New Employer - £6.20 per hour 27.5 hours week

31.10.2012
Salary £261.95 Net Pay £261.95
Tax code 810LM

30.11.2012
Salary £732.12 tax £213.60
Overtime £336.35

katies_mum

Sorry didn`t mean to press send

30.11.2012 (new firm)
Salary £732.12 tax £213.60
Overtime £336.35 NI £52.32
Net pay £802.55
Tax code BR M1

(they have his P45)

____________________________________

Pay 30.11.2012
Money owing from June 2012 - old company (they mislaid paperwork)
other pay £431.77 tax £86.20
net pay £345.57 NI 0.00

Tax code OT M1
Also on this payslip it says
Tax year to date
gross pay £5637.93
taxable pay £5637.93
tax £717.60

This employment
gross pay £5737.93
taxable pay £5637.93
tax £717.60
NI £368.47
NI £427.81

We are absolutely baffled as didn`t think he would pay tax on his wages this month from the new company as nearly all his overtime has been taxed.

Any help you can offer would be wonderful.

Thank you it is much appreciated. (please ask if I havn`t given you all the info)