Personal Allowance question

chrisbur

Britta_Ekland wrote: »

Tax Code1060LM1


Pay Method: BACS
Month No:
AMOUNTS
Previous Month Pay 4,500.00
Basic Pay 6,500.00
Gross Pay 11,000.00
Taxable Pay 11,000.00
Income tax -3,516.25
NI Contribution -492.56
Advance Deduction -3,000.00
Net Payment 3,991.19

I see looking back that you have sometimes given your gross figure as £11000.00 and sometimes as £11100.00 I assume as you have not mentioned it in the last post that the correct figure is £11000.00 so a bit different to the figure I used but the main difference to the tax is due to the payroll dept. using the emergency tax code of 1060L on a month 1 basis ( non-cumulative ) instead of on a cumulative basis. This means that tax has been deducted by giving you 1/12 of your tax years allowances rather than 7/12 of them. This was the reason I advised checking with payroll that they were using the code on the cumulative basis (did you) is because the emergency tax code is usually used on a non-cumulative basis so can easily be overlooked when a cumulative basis is required, as you have just found out.
In the first case speak to payroll they may be able/prepared to adjust next payment; if not then contact HMRC explain you are being taxed non-cumulative despite declaring A on P46 and ask them to send cumulative tax code to your employer.
Regarding the NI they treated your payment as one pay period instead of two so you got an extra £270 aprox but best not to mention this. Does show though that the payroll dept probably have not read all the HMRC books so may also account for the wrong tax basis used for your wages.

Britta_Ekland

Thank you Chris, you've really helped me out with your info!
All the best
Britta