Am I supposed to pay tax?

1886travel

I started my placement at the beginning of august and didn't pay any tax until this month when I received my payslip today.. The salary is 14k PA which means what I get paid was lower than personal allowance (£9440). My placement will be finished by the end of August and according to personal allowance for 2014-2015 tax year, I don't think I am supposed to pay tax...

Did I calculate it wrong? Can I get tax back when I go back to uni if it's correct?

Lokolo

The tax year is April -> April.

For the 13/14 tax year you earned 7 months worth of £14k, which is £8,200. This is less than personal allowance, no tax would be due.

If you earn less than £10k from now until April next year, you can reclaim any tax you overpaid. Pay systems are automated, as you are working at the start of the tax year it assumes you are working around the whole year, it doesn't know you are leaving in August, of which you would end up paying tax (20% of £4k), so it takes out a bit each month. When you leave you will get a P45 and you can use this to claim the tax back.

http://www.hmrc.gov.uk/incometax/stop-work-refund.htm

If you're unemployed for at least four weeks or you retire or return to studies
If you think you've paid too much tax, you'll need to claim a tax refund from HMRC if any of the following applies:
you've been unemployed for at least four weeks
you stopped working because you've retired and you're not getting a pension from your old employer
you've returned to studying
You can claim a tax refund by filling in form P50 Claiming tax back when you have stopped working. Send this to HMRC, together with form P45, Parts 2 and 3 - and keep Part 1A for your own records.
HMRC will send you any tax refund you're entitled to by post. They'll also send you a new form P45, Parts 1A, 2 and 3, if necessary.

McKneff

You don't even need to fill any forms in. Give HMRC a ring, they should have all your tax years details by now.


They will know while you are talking to them if you have overpaid any tax and will send you a cheque.
Simple as that.....

agrinnall

McKneff wrote: »

You don't even need to fill any forms in. Give HMRC a ring, they should have all your tax years details by now.


They will know while you are talking to them if you have overpaid any tax and will send you a cheque.
Simple as that.....

Obviously you can't do this yet, you didn't overpay in 2013/4 as you paid no tax at all (which was correct), but you can do the reclaim for the tax you are paying now once you finish the placement as long as you have no intention of working again before April 2015.

1886travel

McKneff wrote: »

You don't even need to fill any forms in. Give HMRC a ring, they should have all your tax years details by now.


They will know while you are talking to them if you have overpaid any tax and will send you a cheque.
Simple as that.....

This is really helpful and I may try both if necessary! Cheers:)

1886travel

Lokolo wrote: »

The tax year is April -> April.

For the 13/14 tax year you earned 7 months worth of £14k, which is £8,200. This is less than personal allowance, no tax would be due.

If you earn less than £10k from now until April next year, you can reclaim any tax you overpaid. Pay systems are automated, as you are working at the start of the tax year it assumes you are working around the whole year, it doesn't know you are leaving in August, of which you would end up paying tax (20% of £4k), so it takes out a bit each month. When you leave you will get a P45 and you can use this to claim the tax back.

Thanks for the explanation as I was worried before. Also will talk with my manager when I leave

1886travel

agrinnall wrote: »

Obviously you can't do this yet, you didn't overpay in 2013/4 as you paid no tax at all (which was correct), but you can do the reclaim for the tax you are paying now once you finish the placement as long as you have no intention of working again before April 2015.

I may ring them to claim the tax I am paying now. What if I am going to take a part-time job when I come back to uni?

agrinnall

I don't think you will be able to reclaim tax while you are working because as far as HMRC are concerned it is being taken correctly - they aren't to know for certain that you will stop earning before you reach your personal allowance. And if you do intend to do more work in this tax year then I suspect they will refuse a refund until April 2015 when they will have the full year's figures.

Lokolo

1886travel wrote: »

I may ring them to claim the tax I am paying now. What if I am going to take a part-time job when I come back to uni?

You won't be able to claim back until next year (which starts April 6th).

You get a P45 from your old employer (the one you are working for at the moment), and hand it in to your new employer (part time job). They will then update their PAYE systems with your earnings, tax amounts etc., then at the end of the year you will get a P60, which, if due, means you can claim back any overpaid tax.

amiehall

You are paying the correct amount of tax at the moment, as it is calculated on the assumption that you will continue to earn at that rate for the rest of the tax year.

When you leave, you have two options:
Fill in a form P50 to have the tax refunded immediately http://www.hmrc.gov.uk/pdfs/p50.pdf

Or if you are going to get another job (even part time), you can hand in your P45 to them and the tax situation will sort itself out automatically.