Income tax refund before maternity

kentaur30

Hello,

I hope I am posting this thread into the right category.

A question started to puzzle me regarding my wife's income tax.
She is due to go on maternity early May. She's currently on £43K a year and will get her normal pay in April. For May and the first two weeks of June, she should receive 90% of her normal salary and than the SMP from the middle of June for the remaining 7.5 months. She is planning to take a year off.

My question is: having some rough calculations, she will receive around £18K gross in the 2013/14 tax year (april 13 to mar 14) instead of her normal salary of £43K. The Apr and May income tax on her salary will be based on a £43K annual income instead of the (rough) £18K she will actually receive, and she will pay the normal higher tax rate for these two months.
Would the tax code need to be changed from her April salary to reflect on the new (estimated) income of £18K instead of the £43K.

Thank you in advance for all your advice.

George

notanewuser

kentaur30 wrote: »

Hello,

I hope I am posting this thread into the right category.

A question started to puzzle me regarding my wife's income tax.
She is due to go on maternity early May. She's currently on £43K a year and will get her normal pay in April. For May and the first two weeks of June, she should receive 90% of her normal salary and than the SMP from the middle of June for the remaining 7.5 months. She is planning to take a year off.

My question is: having some rough calculations, she will receive around £18K gross in the 2013/14 tax year (april 13 to mar 14) instead of her normal salary of £43K. The Apr and May income tax on her salary will be based on a £43K annual income instead of the (rough) £18K she will actually receive, and she will pay the normal higher tax rate for these two months.
Would the tax code need to be changed from her April salary to reflect on the new (estimated) income of £18K instead of the £43K.

Thank you in advance for all your advice.

George

Assuming that her tax code has a 'L' at the end it will sort itself out by the end of the tax year.

Suggest you read up about how tax codes work. They have nothing to do with salary or projected earnings.

Horseunderwater

No she will stay on the same code as she was on before uprated to this years allowance. Yes she will pay less tax, but that self adjusts during the year. Congratulations on the coming baby.

Dazed_and_confused

notanewuser wrote: »

Assuming that her tax code has a 'L' at the end it will sort itself out by the end of the tax year.

Suggest you read up about how tax codes work. They have nothing to do with salary or projected earnings.

Maybe you would also like to read up on how tax codes work.

Although not necessarily relevant for OP that are lots of elements to some codes which are entirely related to salary/projected earnings eg gift aid relief, pension relief and investment income being three quite common ones - basic rate relief might be given at source (or deducted from interest) but higher rate taxpayers often have adjustments which give extra relief or collect extra tax purely because they are liable to higher rate tax.

OP - your wife's salary is borderline for these type of adjustments, if she is on code 944L it should sort itself automatically via payments after May but if she has a different code you might want to check why it's different to the standard code and does it need changing to reflect the drop in income this coming year.

notanewuser

Dazed_and_confused wrote: »

Maybe you would also like to read up on how tax codes work.

Although not necessarily relevant for OP that are lots of elements to some codes which are entirely related to salary/projected earnings eg gift aid relief, pension relief and investment income being three quite common ones - basic rate relief might be given at source (or deducted from interest) but higher rate taxpayers often have adjustments which give extra relief or collect extra tax purely because they are liable to higher rate tax.

OP - your wife's salary is borderline for these type of adjustments, if she is on code 944L it should sort itself automatically via payments after May but if she has a different code you might want to check why it's different to the standard code and does it need changing to reflect the drop in income this coming year.

I've been a higher rate tax payer for most of my working life. Only alterations needed have been for P11d benefits such as private healthcare and company cars etc.

None of the things you mentioned relate to salary.

Dazed_and_confused

notanewuser wrote: »

I've been a higher rate tax payer for most of my working life. Only alterations needed have been for P11d benefits such as private healthcare and company cars etc.

None of the things you mentioned relate to salary.

You may not have needed these allowances or deductions in your code but plenty do, there are regularly posts on the Cutting Tax board that refer to these adjustments which often seem to mean there is no need to complete a self assessment tax return

for example my salary is 19k and i have £500 of taxed interest -my code wouldnt need to change but if my salary was 50k I could have an extra entry in my code to collect the extra tax due on the interest.