Am I being taxed correctly.

jizba

Hi

I'm new to the full time employment arena and I am seeking to find out if I'm am paying too much tax and NI contributions etc.

For the first two weeks at my new job I earned £492.30 gross, however tax amounted to the total of £108.24 and NI was £6.30 leaving me with £377.76 net to take home for my first two weeks pay.

I have done a couple of checkes on the Internet and these deductions do not seem to add up with what I found so I thought I would enquire on this board to get an absolute answer.

I am single and 23 years old and the tax code seems to be BR M1.

Any help would be greatly appreciated.
Thanks.

Ebany

If this is your only job, then no, you are not being taxed correctly. If you do not have a P45 then you need to ask your payroll department for a P46 so that you can get onto the correct tax code. At present, you are not getting any of your tax allowances, you are being taxed at 22% on all your earnings, rather than being allowed a certain amount tax free and another bit at 10%.

Once you have filled out a P46 and given it back to payroll (or given them your last P45 if you have one) keep an eye on your payslips as your tax code should change to (probably) 522L M1, which will be a start - after a while the M1 should go and you will get a refund of the excess tax you paid in the first month, as this is when the Inland Revenue tell your company how much tax you have paid so far this tax year - though thinking about how the P46 is, you might get onto this straight away as we are right at the start of the tax year .

jizba

Thanks very much for that response.

This is indeed my only job however before I joined I did submit a P45 from my previous employer which was just over a year old. It was only a temporary position I had while at college and the earnings were around £1000.

What exactly do I need to do next, do I need to fill out a P46?

Thanks again.

liney

Fill in a p46, and your employer should change your tax code to M1 and then the tax office will send you both a notice of codeing to adjust your tax code, and take you off the M1 status.

You will recieve the overpayment of tax back through your wages, and the filling of the p46 will remove the BR status meaning you will not pay additional tax, but will not recieve the overpayment back until the tax office write to you both.

This is assuming you havent underpaid tax last year, naturally.

Savvy_Sue

There's a link to download a P46 here.

jizba

Hi

Thanks for the responses, do I still need to submit a P46 to my emloyers even though I have submitted a p45?

If the answer is yes what happens once I submit it to them?

liney

Yes, because they would not have been able to use the P45 you submitted as it was a year old: this is why you are on Basic Rate status. I think the P45 figures needs to be used within 6 weeks, or a similar time frame.

A P46 is definately what you need. You can DL from the link above if your payroll department dont have any in stock.

See my previous post re what will happen next.

papito

hi, you can also call your local inland revenue office, this will be in the city your employer is and can be found on your payslip as a code, call IR and ask them for help and once you know what office to call they will be able to sort out the correct Tax code and advice your employer too.

jizba

Perfect, I will get my p46 sent into my employer tomorrow, that will hopefully sort out this entire saga.

Thanks to all who helped.