Income tax rates

Kench79

I've started working for an agency, I have given them my P45 and my tax code is 1000L. I am paid weekly.

Some weeks I will earn enough to be paying the 40% tax rate, some weeks I wont. How will my employer work it out? Will I just pay 20% until I've earned £41,866 and then pay the higher rate, or will I pay the higher rate every week that my wages are high enough too?

Thanks

getmore4less

PAYE, There are a bunch of table that explain this on HMRC web site.

There is not just TAX but NI to look at.

basically the amount you can earn accumulates on a weekly/monthy basis and you work out the total tax due and what has been paid so far

http://www.hmrc.gov.uk/payerti/forms-updates/forms-publications.htm#2

or use the calculator

http://payecalculator.hmrc.gov.uk/PAYE0.aspx

CLAPTON

basically the allowances are allocated weekly

although not quite correct, in simple terms then :
so each week you are entitled to 1000/52 tax free
the next 31865/52 is taxed at 20%
and anything over that is taxed at 40%

however these amounts are cumulative throughout the year so if you didn't use your full allowance in previous weeks they are carried forward


it's all worked out by your employers payroll computer application.

as long as they have your P45 with your previous earning and tax it should all work out correctly

getmore4less

If you are claiming expenses it can be a good idea to accumulate those an make the claims on weeks you don't do over the NI threshold you save more NI that way

agrinnall

Unless you are going to earn over £41866 for the whole year then it's not worth worrying too much about tax as it'll sort itself out as the year goes on. If you will earn more overall then you should thing about tax avoidance measures such as pension contributions.

But as gm4l says NI is an area where you might be able to make savings. Are you just paying employee's NI or will you also be paying employer's NI? It's certainly worth taking a look at the HMRC NI pages to try to familiarise yourself with the way it works (and ask questions on here if you're confused, there's a fair chance you will be as it's not the easiest of subjects to get your head round).

http://www.hmrc.gov.uk/ni/index.htm

Suarez

getmore4less wrote: »

If you are claiming expenses it can be a good idea to accumulate those an make the claims on weeks you don't do over the NI threshold you save more NI that way

Why would you pay NI on expenses?