Tax code change...

chrisbur

castortroy31 wrote: »

hi there,

cant see any x mark checked on the form.

so if the tax is consistent then for the year after 2013-2014, then surely my tax is reset so to speak and i get the full allowance again?

Regards,

Cas

You probably have the simplified version that does not mention week 53. The best way to check is to look at your payslips. Do you have your payslips for wages paid to you between 25/03/13 and 14/04/13? What are the gross, tax, week number and tax code on these payslips?

Judging by the figures it is highly likely that you did have a week 53 so the following assumes that is the case.
Last year you earned £43719 your tax allowance was 8260 and your 20% tax band was £35031 (these are based on the normal allowances divided by 52 and multiplied by 53 to allow for a week 53) This gives a total of £43291 so you paid 40% tax on only £428 of this income which increased you tax by £85 over what would be due on 20%. About £54 of this would be on the week 53 payment and the rest spread over, at a very rough guess the previous 20 weeks so adding about £1.50 to the tax bill.
When you started the new year and earned £1088 you get 1/52 of your allowances each week so for week 1 you get 181.63 tax free and 615.58 at 20% so 797.21 before 40% tax is due. So £290.79 has 40% deducted which is about £58 extra above 20% tax.
If during this year you had time off and your earnings instead of being about £56500, as they will be if you continue to earn £1088 a week, they dropped to around the same as last year then you would get tax rebates that would reduce your end of year tax bill to about what it was last year.
Essentially you are paying more tax because you are earning more.
One last point regarding the week 53 there have already been cases of people getting a re-calculation of tax from HMRC based on the normal annual tax allowance and the tax owed being spread over this year. I do not know if this will happen in your case but it might, I have seen suggestions that it is now the standard practise.

TaxSaviour

This may seem simple, but if you started part way through the tax year 2012/13 then you would be able to earn more weekly from your start date paying slightly less tax as it averages out over the tax year. This tax year 2013/14 you are starting from 6 April and will have 52 weeks of pay, the tax will be higher as your earnings for the entire year will be higher!

Maybe

castortroy31

TaxSaviour wrote: »

This may seem simple, but if you started part way through the tax year 2012/13 then you would be able to earn more weekly from your start date paying slightly less tax as it averages out over the tax year. This tax year 2013/14 you are starting from 6 April and will have 52 weeks of pay, the tax will be higher as your earnings for the entire year will be higher!

Maybe

Hi there,

Sorry am confused even more now... if i go onto listen to taxman or salary calculator... then the numbers they give me are going to be wrong? i pay off my student loan as well ... but how can the numbers be different
/

chrisbur

castortroy31 wrote: »

Hi there,

Sorry am confused even more now... if i go onto listen to taxman or salary calculator... then the numbers they give me are going to be wrong? i pay off my student loan as well ... but how can the numbers be different
/

These tax calculators assume that you are being paid in equal payments through the year but last year you were getting nothing for several weeks then very high earnings for some weeks and low or no earnings for a few weeks. Under these conditions salary calculators will give the wrong answer on a week by week basis and only give the correct tax figure for the year end (though they do not tell you what you will have paid on week 53 cases).

castortroy31

chrisbur wrote: »

These tax calculators assume that you are being paid in equal payments through the year but last year you were getting nothing for several weeks then very high earnings for some weeks and low or no earnings for a few weeks. Under these conditions salary calculators will give the wrong answer on a week by week basis and only give the correct tax figure for the year end (though they do not tell you what you will have paid on week 53 cases).

I see. Right if thats the case since i just moved to new company about a month ago. my tax now should be calculated correctly right?

i understand its done based on what i get paid during the year in equal parts.

I guess I should see my pay inline with the calculator this month?

chrisbur

castortroy31 wrote: »

I see. Right if thats the case since i just moved to new company about a month ago. my tax now should be calculated correctly right?

i understand its done based on what i get paid during the year in equal parts.

I guess I should see my pay inline with the calculator this month?

"my tax now should be calculated correctly right?"
Your tax has almost certainly been calculated correctly in the past, it has been the comparison with the tax calculator sites that has shown a difference in the week by week figures as these cannot be relied on with the calculators.

"i understand its done based on what i get paid during the year in equal parts."
Your tax is calculated each week/month on what you owe in tax at that point and from it is deducted the tax paid so far. So for example in week 20 your tax is calculated on your total earnings for week 20 allowing you 1/20 of your tax free allowance and 1/20 of your 20% band allowance, from this is deducted the total tax you have paid up to week 19 and what is left is the tax you pay on week 20. This goes on week by week so week 21 is tax due to week 21 less tax paid at week 20 etc.

"I guess I should see my pay inline with the calculator this month"
Assuming that your earnings do not change greatly from week to week then the calculators will give the correct answer.

castortroy31

chrisbur wrote: »

"my tax now should be calculated correctly right?"
Your tax has almost certainly been calculated correctly in the past, it has been the comparison with the tax calculator sites that has shown a difference in the week by week figures as these cannot be relied on with the calculators.

"i understand its done based on what i get paid during the year in equal parts."
Your tax is calculated each week/month on what you owe in tax at that point and from it is deducted the tax paid so far. So for example in week 20 your tax is calculated on your total earnings for week 20 allowing you 1/20 of your tax free allowance and 1/20 of your 20% band allowance, from this is deducted the total tax you have paid up to week 19 and what is left is the tax you pay on week 20. This goes on week by week so week 21 is tax due to week 21 less tax paid at week 20 etc.

"I guess I should see my pay inline with the calculator this month"
Assuming that your earnings do not change greatly from week to week then the calculators will give the correct answer.

Hi there,

thanks very much for your help.

Regards,