Starting a Job half way through the tax year - what will happen with PAYE?

yorkie1990

Hi,

I'm starting a job next month after graduating university last July, this will be first Job this tax year in the UK (I was working and earning in Ireland this summer but I assume they have a completely different system, so for all intents and purposes this is my first job this tax year).

I have two questions. Firstly, I don't have my previous p45 so as I understand it I should get on the companies case to give me a p46/starter checklist so I can avoid paying emergency tax for my first paycheck?

Secondly, I will be starting this Job halfway through the tax year and although I will earn over the £10,000 tax free income, it won't be by much. It will be a PAYE system so does this mean that they will deduct a very small amount of tax as they estimate my income to be just over threshold. Or will they deduct tax as if this is one months pay of a full tax year, at which point by next April I will have overpaid tax and can claim it back.

I assume it is one of those scenarios at least so if someone could point me in the right direction it would be greatly appreciated.

Cheers.

Spidernick

If they don't put you on an emergency code then all your unused allowances from April to date will be applied to your earnings, meaning that you won't pay any (or very little) tax before next April from what you have said (yes, the P46 is the form you need).

Is your salary around £10K per annum or what you will earn this tax year? If the former then you will pay just a little bit of tax from April, if the latter you will suddenly find your net pay is considerably lower from next April, as you will get a twelfth of the personal allowance each month from then on.

Those starting work part way through the tax year get this kind of benefit and it pays to be aware that things are likely to change once you are earning for a complete tax year, with your net pay likely to be lower.

Hope that makes sense.

purdyoaten

yorkie1990 wrote: »

Hi,

I'm starting a job next month after graduating university last July, this will be first Job this tax year in the UK (I was working and earning in Ireland this summer but I assume they have a completely different system, so for all intents and purposes this is my first job this tax year).

I have two questions. Firstly, I don't have my previous p45 so as I understand it I should get on the companies case to give me a p46/starter checklist so I can avoid paying emergency tax for my first paycheck?

Secondly, I will be starting this Job halfway through the tax year and although I will earn over the £10,000 tax free income, it won't be by much. It will be a PAYE system so does this mean that they will deduct a very small amount of tax as they estimate my income to be just over threshold. Or will they deduct tax as if this is one months pay of a full tax year, at which point by next April I will have overpaid tax and can claim it back.

I assume it is one of those scenarios at least so if someone could point me in the right direction it would be greatly appreciated.

Cheers.

You complete form P46 and tick Box A

You are entitled to 10000 tax free as you say. This is spread evenly over the tax year. September is month 6 and it follows that, if you have earned 5000 by that time, you will pay tax on the excess. This increases to 5833 by October etc etc.

If you have earned £12000 by the end of the tax year you will pay £400 in tax by that time which will mostly be deducted in the last few months.

zygurat789

yorkie1990 wrote: »

Hi,

I'm starting a job next month after graduating university last July, this will be first Job this tax year in the UK (I was working and earning in Ireland this summer but I assume they have a completely different system, so for all intents and purposes this is my first job this tax year).

I have two questions. Firstly, I don't have my previous p45 so as I understand it I should get on the companies case to give me a p46/starter checklist so I can avoid paying emergency tax for my first paycheck?

Secondly, I will be starting this Job halfway through the tax year and although I will earn over the £10,000 tax free income, it won't be by much. It will be a PAYE system so does this mean that they will deduct a very small amount of tax as they estimate my income to be just over threshold. Or will they deduct tax as if this is one months pay of a full tax year, at which point by next April I will have overpaid tax and can claim it back.

I assume it is one of those scenarios at least so if someone could point me in the right direction it would be greatly appreciated.

Cheers.

I take it the "Ireland" is the republic rather than the top 6 counties.
You may very well be on emergency because HMRC will have to respond to your P46 and give your employer the code before they process your wages. But all is not lost, emergency tax is effectively 1000L non cumulative so you will be netting what your normal income will be when the new tax year starts.
Under PAYE what you have to do is make sure you have the correct code number, usually 1000L followed by spaces, not M1 or non-!!!. When your P46 is fully processed you can look forward to a refund of the tax you have paid and will only pay a little tax this year but remember if you are on emergency, that is your normal tax next from 6 April 2015.

LokiBrenna

It makes more sense to speak directly with HMRC's regarding you own personal tax situation, their PAYE Helpline is 08456055999.

At times they can adjust your tax code to allow for your pay to not be taxed and at times they can arrange for you to be taxed more ... speak to them directly!!

Loki _ Dictionary of Investment Thoughts