Understanding P60 help please

pandora205

Sorry if this isn't the correct forum - please move if need be.

I've just received my P60 and understand the basics, such as tax code and deducted but not some of the terms used.

Edit: sorry just realised the following are National Insurance not Tax as I had thought! It's still pretty confusing though, so interpretation for a lay person would be helpful!

Can anyone throw light on:

Lower Earnings Limit (LEL)
Primary Threshold (PT)
Upper Accrual Point (it actually says Accural) (UAP)
Upper Earnings Limit (UEL)

I'm trying to work out how much 40% tax I'm paying, as I contribute to AVCs to reduce this/save for the future but I'm confused by the terms.

The actual columns on the P60 are:

Earnings at the LEL where earning are equal to or exceed the LEL
Earnings above the LEL up to and including the PT
Earnings above the PT up to and including the UAP
Earnigs above the UAP up to and including the UEL
Employee's contributions due on all earnings above the PT

Thanks

zygurat789

To find out your 40% tax band:
Take your code number off the P60, multiply by 10 and add £32,010. Take the answer off your taxable earnings. That's it.

xylophone

It's still pretty confusing though, so interpretation for a lay person would be helpful!

http://taxaid.org.uk/info/national-insurance/national-insurance-for-employees-and-employers/national-insurance-thresholds

http://www.hmrc.gov.uk/rates/nic.htm

CLAPTON

pandora205 wrote: »

Sorry if this isn't the correct forum - please move if need be.

I've just received my P60 and understand the basics, such as tax code and deducted but not some of the terms used.

Edit: sorry just realised the following are National Insurance not Tax as I had thought! It's still pretty confusing though, so interpretation for a lay person would be helpful!

Can anyone throw light on:

Lower Earnings Limit (LEL)
Primary Threshold (PT)
Upper Accrual Point (it actually says Accural) (UAP)
Upper Earnings Limit (UEL)

I'm trying to work out how much 40% tax I'm paying, as I contribute to AVCs to reduce this/save for the future but I'm confused by the terms.

The actual columns on the P60 are:

Earnings at the LEL where earning are equal to or exceed the LEL
Earnings above the LEL up to and including the PT
Earnings above the PT up to and including the UAP
Earnigs above the UAP up to and including the UEL
Employee's contributions due on all earnings above the PT

Thanks

in simple terms
if you earn less than LEL you pay no NI and do not accrue NI credits
if you earn between LEL and PT then you pay no NI but your are credited with NI credits
if you earn over PT you pay 12 % over that PT
over UEL you pay 2% NI over the UEL

pandora205

zygurat789 wrote: »

To find out your 40% tax band:
Take your code number off the P60, multiply by 10 and add £32,010. Take the answer off your taxable earnings. That's it.

Thanks - do I then take off my occupational pension and AVCs (deducted by my employer)?

zygurat789

pandora205 wrote: »

Thanks - do I then take off my occupational pension and AVCs (deducted by my employer)?

It depends on the type of scheme you are in.
You need to check between your last payslip of the year, Month 12 or week 52, and your P60. Usually you will find your gross pay is NOT what you have been taxed on because they are allowable and the taxable amount on your P60 is your gross pay less pension.
Alternatively you may find that the amount you have contributed to your pension and AVCs is the net amount and HMRC have put your tax relief into your pension. So £80 deducted from salary, £20 from HMRC tax relief = £100 total contribution to pension/AVC.
Two totatally diferent ways, if you can't fathom out which is applicable to you ask your wages and salaried dept at work.

pandora205

I'm a Local Authority employee. I'll work backwards on this - having checked my P60 using the method above it looks like I would be paying much more tax than I do, so I'm assuming they haven't taken off the pension or AVCs. I calculated my AVCs to take me out of 40% rate a few years ago, so I shouldn't be paying much at that rate. So I'll check my March pay slip, and also recalculate taking off superannuation + AVCs to see if the P60 makes sense.

If I get stuck I'll call our payroll department.

Thanks

zygurat789

pandora205 wrote: »

I'm a Local Authority employee. I'll work backwards on this - having checked my P60 using the method above it looks like I would be paying much more tax than I do, so I'm assuming they haven't taken off the pension or AVCs. I calculated my AVCs to take me out of 40% rate a few years ago, so I shouldn't be paying much at that rate. So I'll check my March pay slip, and also recalculate taking off superannuation + AVCs to see if the P60 makes sense.

If I get stuck I'll call our payroll department.

Thanks

They don't do this it is done, automatically, by the saaries computer program, they may have input your details wrongly but I would have thought that unlikely.
If you have paid your AVCs net then you would not achieve this.
What is your code number?

jem16

pandora205 wrote: »

I'm a Local Authority employee. I'll work backwards on this - having checked my P60 using the method above it looks like I would be paying much more tax than I do, so I'm assuming they haven't taken off the pension or AVCs. I calculated my AVCs to take me out of 40% rate a few years ago, so I shouldn't be paying much at that rate. So I'll check my March pay slip, and also recalculate taking off superannuation + AVCs to see if the P60 makes sense.

If I get stuck I'll call our payroll department.

Thanks

LGPS main contributions are taken off gross salary so your P60 will definitely show your taxable income as gross salary minus pension contributions.

AVCs with the LGPS are also taken off gross salary provided you normally pay them monthly via your pay. So again this will reduce the amount shown on the P60.

If you provide the figures it should be easy enough to check.

GlasgowTS

P.s. If your 40 percent. Make sure you claim your other 20% for pension contributions as long as it's not Superannuation.