Tax rebate - Commission

Shack_attack

Hi, any help is greatly appreciated.

I work in a commission based environment. As such my monthly pay can vary greatly from month to month.

My commission to be paid in April has been calculated to be a large amount and as such I'll get taxed heavily in the 40% bracket.

When it evens itself out over the year I probably wont earn much over the 40% bracket.

Is it only at the end of the tax year you can claim a refund or is it possible to due this during the year?

Thanks,

molerat

If you are on PAYE then it will correct itself in the following lower paid months so there will be nothing to reclaim at the end of the year.

Shack_attack

Thanks for the reply.

So they'll tax me less to even it out?

molerat

Yes.


You get 1/12th of the annual tax allowance each month and tax on a cumulative tax code is worked out :-


Apr pay - Apr tax allowance = taxable -> tax due -> tax deducted

(May pay + Apr pay) - (May tax all + Apr tax all) = taxable -> tax due - Apr tax paid = tax deducted

(Jun pay + May pay + Apr pay) - (Jun tax all + May tax all + Apr tax all) = taxable -> tax due - (Apr tax paid + May tax paid) = tax deducted


The "tax deducted" could be negative and you may end up with a tax rebate one month