Tax is now nearly triple last month's - Help

chrisbur

hoyteam wrote: »

Ok, the £8553 pay to date is what is listed on my P45. My final payslip with my previous employer has gross pay to date down as £9,237. This is lisetd under period ending 31/08/2015. The taxable pay to go along with that was £8553 YTD.

My annual salary was around 22,000 and now it's 28,000.

It is the taxable pay to date that goes on the P45 so that is okay. Obviously I do not know what the untaxed element is hopefully you do (if not your old employer should know) but that is not relevant to this problem. I am also assuming that your tax codes are correct and that you know why they are well below the standard tax codes.

All the figures that follow are rounded a little bit to keep things a bit simpler, so they may turn out in the end to be a pound or two different.

We have a P45 with tax code of 845M, taxable gross of £8553 and tax paid of £1005.
If this were added to your new employment records you would get a payslip for September showing tax code 845M with your taxable gross of £2439 added to the P45 figure of £8553 to give £10992 for the year to date figure. Your tax allowance for September on 845M would be about £4230 so taxable pay to date would be £6762 on which £1352 is due. Tax paid per the P45 is £1005 so tax to be paid in September is £1352 less £1005 which is £347.

Looking first at just the year to date figures then we should have taxable gross £10992 and tax paid £1352 but we actually have taxable gross £19335 and tax paid £2316
First question is where did the extra gross of £8343 come from.

Tax actually paid was £305 and the P45 tax was £1005 so we have £1310 tax accounted for but tax paid to date is shown as £2316
Second question where did the £1006 extra tax come from.

Had the process gone correctly tax deducted would have been £347 Had it been done using the year to date figures shown on the payslip we have £19335 less £4230 to give £15105 taxable and tax of £3021 less the P45 of £1005 and the mystery £1006 gives a tax figure of £1010 and yet a tax figure of £305 was arrived at, which is very close to what the emergency tax would have been.
Third question how was this tax figure arrived at.

The figures are not quite exact but I believe somehow the P45 has been entered into your wages twice. In view of the strange tax figure for September I believe that someone in the payroll dept. must know something about this. I would suggest asking payroll again about it. Ask where the extra gross of £8343 and tax of £1006 came from and why if they were included in the September payslip the tax was overridden for that month and not taken until October. If they insist that the figures came from the tax office you will then have to contact them to question why a P45 of gross £8443 and tax £1005 was just about doubled when it got to your employer.

hoyteam

Amazing responses and thank you for the advice.

This tax system has baffled me so it can be difficult having a conversation with HMRC. I'll contact payroll first, then the tax office, with this information in mind.


I'll save the complications I'm having with tax credit having to be paid back until another day!