Potential pay rise questions

Chasingdreams

Hi all,

Just a background to anyone who doesn't know me; declared BR Sept 2014 so not quite discharged yet. At present HMRC haven't changed my tax code so given we have now entered the new financial year that won't happen now. Furthermore, as I budget to my means I don't currently have an IPA.

There have been conversations in work about senior staff receiving a potential pay rise for good performance which I would be in line for. There is also the potential for a small bonus which after taking the plunge 7 months ago would be well received as money has been very tight. I work very hard in my job to provide for my fianc!e and 1 year old son and if anything was to be put in place this wouldn't take affect until the month of July (month 10 of 12). My question to all the wise people here is how would this affect me going forwards?

I have a feeling I'd need to disclose this info and this would result in a 3 year IPA from July? So in some respects, a payrise to me would be of absolutely no benefit right now as any surplus would go to the OR?

I'm really intrigued to know as my partner and I (now things are coming together) are hoping to save for our wedding so any info or advice would be gratefully received.

Chasingdreams

dojoman

Chasingdreams wrote: »

Hi all,

Just a background to anyone who doesn't know me; declared BR Sept 2014 so not quite discharged yet. At present HMRC haven't changed my tax code so given we have now entered the new financial year that won't happen now. Furthermore, as I budget to my means I don't currently have an IPA.

There have been conversations in work about senior staff receiving a potential pay rise for good performance which I would be in line for. There is also the potential for a small bonus which after taking the plunge 7 months ago would be well received as money has been very tight. I work very hard in my job to provide for my fianc!e and 1 year old son and if anything was to be put in place this wouldn't take affect until the month of July (month 10 of 12). My question to all the wise people here is how would this affect me going forwards?

I have a feeling I'd need to disclose this info and this would result in a 3 year IPA from July? So in some respects, a payrise to me would be of absolutely no benefit right now as any surplus would go to the OR?

I'm really intrigued to know as my partner and I (now things are coming together) are hoping to save for our wedding so any info or advice would be gratefully received.

Chasingdreams

You have a legal obligation to inform the OR of any change in circumstance within 21 days of it happening, if you don`t you are breaking the terms of your BR. Whether it would result in an IPA would depend on the amount of your pay rise.

TheGardener

The key thing here is that you do not have to tell the OR until you have actually received any increase - you must do so within 21 days of receiving an increased payment. There is no requirement, merit or benefit to be gained from telling the OR it MIGHT happen.
If as you say the increase MIGHT happen in month 10 and you inform them within 21 days of it ACTUALLY happening - you might be lucky and find the OR hasn't the time or inclination to make changes and set up an IPA before your AD date. Once the AD date has passed, the OR can not set up an IPA.
I'm all for absolute honesty with the OR but the OR will not expect you to tell them about something that hasn't happened yet.

betterdaysahead

TheGardener wrote: »

The key thing here is that you do not have to tell the OR until you have actually received any increase - you must do so within 21 days of receiving an increased payment. There is no requirement, merit or benefit to be gained from telling the OR it MIGHT happen.
If as you say the increase MIGHT happen in month 10 and you inform them within 21 days of it ACTUALLY happening - you might be lucky and find the OR hasn't the time or inclination to make changes and set up an IPA before your AD date. Once the AD date has passed, the OR can not set up an IPA.
I'm all for absolute honesty with the OR but the OR will not expect you to tell them about something that hasn't happened yet.

One thing I've been wondering is: What if your financial situation changes when there is less than 21 days left before your AD date? Do you still have an obligation to tell the OR? What if you tell them within 21 days but it is then after your AD date? Can they still put an IPA in place or is it too late?

dojoman

TheGardener wrote: »

The key thing here is that you do not have to tell the OR until you have actually received any increase - you must do so within 21 days of receiving an increased payment. There is no requirement, merit or benefit to be gained from telling the OR it MIGHT happen.
If as you say the increase MIGHT happen in month 10 and you inform them within 21 days of it ACTUALLY happening - you might be lucky and find the OR hasn't the time or inclination to make changes and set up an IPA before your AD date. Once the AD date has passed, the OR can not set up an IPA.
I'm all for absolute honesty with the OR but the OR will not expect you to tell them about something that hasn't happened yet.

Hence the reason I stated within 21 days of a change of circumstance

TheGardener

betterdaysahead wrote: »

One thing I've been wondering is: What if your financial situation changes when there is less than 21 days left before your AD date? Do you still have an obligation to tell the OR? What if you tell them within 21 days but it is then after your AD date? Can they still put an IPA in place or is it too late?

Interesting question...I don't know the answer but someone out there might - I would guess its too late - even if you told the OR immediately, unless is was a very large change, I suspect it would be difficult for them to act that quickly.

Chasingdreams

Thank you for the responses.

So to clarify (and sorry if I'm acting dumb), if I wasn't in receipt of a pay increase til after my AD, I may not need to disclose this (ie new salary starts on August 6th and my AD date is September 2nd, pay goes in on Sept 6th after AD so no need to disclose )?

Do I have that right?

betterdaysahead

Chasingdreams wrote: »

Thank you for the responses.

So to clarify (and sorry if I'm acting dumb), if I wasn't in receipt of a pay increase til after my AD, I may not need to disclose this (ie new salary starts on August 6th and my AD date is September 2nd, pay goes in on Sept 6th after AD so no need to disclose )?

Do I have that right?

100% correct. In this case, you have no need to disclose because the pay rise effectively didn't take place until Sept 6th.

TheGardener

Chasingdreams wrote: »

...Do I have that right?

That would be my understanding of it...until you get your payslip - you cant know/evidence exactly how much your net salary has changed...