Tax Credits Renewals - 2015

sidefx

Still no renewal form but the payments into my account have increased!

Ringing them is obviously a nightmare with 56 mins on hold and no joy, but I am worried about over payment!

Does anyone know when they send out the last batch of renewal forms? I have always renewed by post so expecting a form soon I hope!!

geministar

Thanks tothemoonandback, I was worried it meant you were going through compliance or something if it was a red line and I always do everything by the book so feel much better now. Have a great weekend : )

thebrownsrmch

Thank you for the quick reply Icequeen!

As I started work in July 2013 (in full time education prior to this), I believe my total was around 21k, I would have to dig out my P60 to check this though.

zagfles

too_much_debt wrote: »

Thanks for replying.


When they gave him his P60 they said they had paid him £500 too much (via the London Weighting) and that they would be deducting this from his pay over the next few months.


His April pay was 1846.94, his May pay was 1750.90

Something weird is going on here.

First of all I assume he's got a 1060L tax code, is that right? It'll be on the payslip.

If so the payslips definitely show pension conts are take after tax is deducted, not before as HR claim.

But the P60 looks too low for this especially if they paid him £500 too much last year. Did he get a payrise? Does the P60 match the March cumulative total gross?

Do his pension statements show tax being reclaimed from HMRC?

too_much_debt

zagfles wrote: »

Something weird is going on here.

First of all I assume he's got a 1060L tax code, is that right? It'll be on the payslip.

If so the payslips definitely show pension conts are take after tax is deducted, not before as HR claim.

But the P60 looks too low for this especially if they paid him £500 too much last year. Did he get a payrise? Does the P60 match the March cumulative total gross?

Do his pension statements show tax being reclaimed from HMRC?

Hi. Thanks for replying. I am getting so confused with all this.


Since January 5th he has been working for this new company, previous company he has been with for 18 years, he is in the same job in the same place etc but is paid by this new company.


His payslip from April has his tax code as 1060L, in January he was on 0TMI for one month then in February it went to 1000L


His P60 is the same figure that is on his March payslip under Taxable Gross it says £29,726.98, his P60 says 29,726.


I think they get a certain % rise in July normally but not 100% sure.
He has not had a pension statement from this new company as he only joined in January. Not sure about the previous company.
On his paperwork from the new company it has a page with 'Your Payslip explained' and his has an example payslip with numbers and underneath explains what it is. On the example it has Pensnble Gross in the place where it says Stak'able Gross on his payslip.
Maybe I should get HR's number of him and ring them up myself next week to find out what is going on.
Where should it says on his pay slips that pension comes off before tax?


Thanks for your advice, really appreciate it.

zagfles

too_much_debt wrote: »

Hi. Thanks for replying. I am getting so confused with all this.


Since January 5th he has been working for this new company, previous company he has been with for 18 years, he is in the same job in the same place etc but is paid by this new company.


His payslip from April has his tax code as 1060L, in January he was on 0TMI for one month then in February it went to 1000L


His P60 is the same figure that is on his March payslip under Taxable Gross it says £29,726.98, his P60 says 29,726.

So that must include both old and new companies. Maybe his old company paid pensions differently? Have you got a payslip example?

I think they get a certain % rise in July normally but not 100% sure.
He has not had a pension statement from this new company as he only joined in January. Not sure about the previous company.
On his paperwork from the new company it has a page with 'Your Payslip explained' and his has an example payslip with numbers and underneath explains what it is. On the example it has Pensnble Gross in the place where it says Stak'able Gross on his payslip.

Maybe it's "stakeholder", which might imply a pension taken from net pay. Did it say the same with his old company?

Maybe I should get HR's number of him and ring them up myself next week to find out what is going on.
Where should it says on his pay slips that pension comes off before tax?

It usually won't say anything, it's the numbers.

Work out how much he is getting taxed on, by multiplying the tax by 5 (or divide by 0.2, same thing).

In April tax of 326, means he's getting taxed on 1630.

Add a 9 to the tax code, and divide by 12. Gives 10609/12 = 884.08. This is the tax free amount.

Add to the amount he's actually paid tax on, ie 1630 + 884.08, gives 2514.08. You only get taxed on whole pounds so this should always be within a pound of the amount he was taxed on.

As you can see this is the gross before pension is deducted, not after. So tax is applied to his entire gross, not the gross after pensions conts are taken off.

This will work for other months provided he always stays within the basic rate band ie between about £1k and £3k per month, and his tax code doesn't change.

Thanks for your advice, really appreciate it.

No problem.

too_much_debt

zagfles wrote: »

So that must include both old and new companies. Maybe his old company paid pensions differently? Have you got a payslip example? Maybe it's "stakeholder", which might imply a pension taken from net pay. Did it say the same with his old company?It usually won't say anything, it's the numbers.

Work out how much he is getting taxed on, by multiplying the tax by 5 (or divide by 0.2, same thing).

In April tax of 326, means he's getting taxed on 1630.

Add a 9 to the tax code, and divide by 12. Gives 10609/12 = 884.08. This is the tax free amount.

Add to the amount he's actually paid tax on, ie 1630 + 884.08, gives 2514.08. You only get taxed on whole pounds so this should always be within a pound of the amount he was taxed on.

As you can see this is the gross before pension is deducted, not after. So tax is applied to his entire gross, not the gross after pensions conts are taken off.

This will work for other months provided he always stays within the basic rate band ie between about £1k and £3k per month, and his tax code doesn't change. No problem.

I've looked at his December payslip from the old company and it says:


Total Gross 23,073.97
Taxable Gross 21,574.18
Tax paid 2,813.40
Employees NI 1790.38
Employers NI 1723.43
Pen'sionable Gross 23,073.97
Ees Pension: 1499.79
Ers pension 2976.54


He was in a local government pension before would that make a difference?


What should I do about renewing tax credits as I have to confirm whether the figure on his P60 is correct (they already have this figure on the renewal).


HR did reply the other day saying pension contributions are taken off before tax is deducted so have they made a mistake on the payslips?


My brain is hurting.


His 13/14 earnings from the previous employer was £28784, if he had a payrise it would have been 1 or 2% 3% max.

zagfles

too_much_debt wrote: »

I've looked at his December payslip from the old company and it says:


Total Gross 23,073.97
Taxable Gross 21,574.18
Tax paid 2,813.40
Employees NI 1790.38
Employers NI 1723.43
Pen'sionable Gross 23,073.97
Ees Pension: 1499.79
Ers pension 2976.54

Well there pension conts are taken off before tax is deducted. The taxable gross is less than the total gross by the amount of the employee pension conts, and the tax is based on 21574 with a 1000L tax code.

So it looks like they've changed they way they deduct pension conts with the new company!

He was in a local government pension before would that make a difference?

Local govt pensions I believe would always do things properly and take pension conts off before tax, and the above shows they do.

What should I do about renewing tax credits as I have to confirm whether the figure on his P60 is correct (they already have this figure on the renewal).

Well up to December pension conts are already deducted. Jan-March is the issue.

Can you work it out from the payslips, if not post them and I'll have a look.

HR did reply the other day saying pension contributions are taken off before tax is deducted so have they made a mistake on the payslips?

April & May definitely show pension conts deducted after tax, not before. December shows pension conts deducted before tax.

too_much_debt

zagfles wrote: »

Well there pension conts are taken off before tax is deducted. The taxable gross is less than the total gross by the amount of the employee pension conts, and the tax is based on 21574 with a 1000L tax code.

So it looks like they've changed they way they deduct pension conts with the new company!
Local govt pensions I believe would always do things properly and take pension conts off before tax, and the above shows they do. Well up to December pension conts are already deducted. Jan-March is the issue.

Can you work it out from the payslips, if not post them and I'll have a look.
April & May definitely show pension conts deducted after tax, not before. December shows pension conts deducted before tax.

Yes, it is since January when the new company took over that is the problem.
I'm assuming that the Total Gross and the Taxable Gross should be different.


January:
Payments: 2447.73 (basic pay, London weighting, l/w enhancement)
Total Deductions 822.09 (489.40 tax, 214.17 NI Contracted in, pension 118.52)
Cumulatives: Total Gross 2447.73, Taxable Gross 2447.73
- Net payment 1625.64


February and March the Cumulatives are different to the above

February:
Payments: 2709.04
Total Deductions: 751.10 (tax 375.20, NI 245.52, Pension 130.38)
Net payment 1957.94
Cumulatives: Total gross 5145.77, Taxable Gross 27034.48


March:
Payments 2692.50
Total Deductions 745.52 (tax 371.60, NI 243.54, Pension 130.38
Net payment 1946.98
Cumulatives: Total Gross 7849.27, Taxable Gross 29726.98.


This is totally confusing, on Jan payslip they have the same figure for Total and taxable gross, on Feb and March they have different and from April and May they go back to the same figure.


Also on the pension plan document (it is with Standard Life) they say under 'Payments into this plan by you' that monthly they will collect £130.38 and it is only Feb and Mar that they take this amount the other months it is less.


Another, the London Weighting payment in the Payments is more than it should be which is why he has been over paid and why they are taking money off although it is not listed on the payslip that they have deducted £100 but the Net pay for May is just under £100 less than April.

zagfles

too_much_debt wrote: »

Yes, it is since January when the new company took over that is the problem.
I'm assuming that the Total Gross and the Taxable Gross should be different.


January:
Payments: 2447.73 (basic pay, London weighting, l/w enhancement)
Total Deductions 822.09 (489.40 tax, 214.17 NI Contracted in, pension 118.52)
Cumulatives: Total Gross 2447.73, Taxable Gross 2447.73
- Net payment 1625.64

So he's being taxed on the whole lot, no allowance, because he had an emergency tax code.

February and March the Cumulatives are different to the above

Because they then included his income from the last job, and he got a proper tax code

February:
Payments: 2709.04
Total Deductions: 751.10 (tax 375.20, NI 245.52, Pension 130.38)
Net payment 1957.94
Cumulatives: Total gross 5145.77, Taxable Gross 27034.48

Are you sure the bolded figure isn't 5156.77 ?

March:
Payments 2692.50
Total Deductions 745.52 (tax 371.60, NI 243.54, Pension 130.38
Net payment 1946.98
Cumulatives: Total Gross 7849.27, Taxable Gross 29726.98.


This is totally confusing, on Jan payslip they have the same figure for Total and taxable gross, on Feb and March they have different and from April and May they go back to the same figure.

Because they included the previous employment in the total taxable from Feb, once his P45 was processed.

There's something missing here, there's an extra £303.53 in the gross, also the tax seems too much as no allowance was given in Jan which wasn't made up for in Feb/March.

Was there a final payslip from the old company in Jan showing a payment (gross) of a bit over £300, and was there a tax refund?

Also on the pension plan document (it is with Standard Life) they say under 'Payments into this plan by you' that monthly they will collect £130.38 and it is only Feb and Mar that they take this amount the other months it is less.

Jan seems to be a part month. He started 5 Jan so his pay is less than normal too. But as above there should be an additional payslip from the old company.

Another, the London Weighting payment in the Payments is more than it should be which is why he has been over paid and why they are taking money off although it is not listed on the payslip that they have deducted £100 but the Net pay for May is just under £100 less than April.

OK, but don't worry about that for now. See if you can find the final (Jan?) payslip from the old company, or the P45.