Why has my tax payment gone up?? (PAYE)

jock23

Firstly, apologies if this is in the wrong forum.


I appear to be paying more tax per month this tax year than I did last year, and I can't find an answer as to why?

My gross pay has not changed and neither has my pension/student loan payments, yet in March I paid £441.05 and in April/May I paid £478.60.


I had thought (as usual) when my tax code went from 1060L to 1100L that my net pay would have gone up, not down? At first I thought it may have been that I slightly went over the 40% bracket last year (due to a bonus at work one month) but looking at a few tax calculators it seems like I am actually getting paid correctly?


If anyone can help me understand this before I phone the HMRC I would be very very grateful.


Thanks in advance.

jock23

sorry for replying to my own post, but investigating a bit further and it seems that I should have been paying more tax last financial year than I was (according to the tax calculator websites)


Could the HMRC have been giving me some sort of rebate over the course of the year since a payrise in January?

CLAPTON

tax is about facts and detail

you would need to post figures for us to know what is going on.
if you have a final salary pension scheme do bear in mind that NI has increased for people in these schemes as they now pay the full 12% NI rather than the reduced rate

chrisbur

jock23 wrote: »

sorry for replying to my own post, but investigating a bit further and it seems that I should have been paying more tax last financial year than I was (according to the tax calculator websites)


Could the HMRC have been giving me some sort of rebate over the course of the year since a payrise in January?

The only way for anyone to advise reliably on this is if you give full figures.
For the last two salaries in 2015/2016 (last tax year)and the first salary of 2016/2017 (this tax year) give the taxable gross, tax paid, taxable gross to date and the tax paid to date. The to date figures are not needed for this year as will be the same as the salary figures.

Was there any backpay involved in the pay increase?

FirstTimeBuyer2016_2

Sorry if this is the wrong section for thisquestion but I saw someone mention NI contributions have gone up.

I currently have 3 jobs, 1 full time & 2part time jobs. For financial year 2015/16 my main full time job had the “NICategory D”, and my secondary jobs had “NI Category A”.

ince the new financial year 2016/17 hasstarted all 3 of my roles have the “NI Category A” which has increased my contributions.

Can anyone shed some light as to why this has happened? Also last year only 1 of my jobs was on the Tax Code BR but now this year 2 of them are and again im paying for contribution.

Darksparkle

FirstTimeBuyer2016 wrote: »

Sorry if this is the wrong section for thisquestion but I saw someone mention NI contributions have gone up.

I currently have 3 jobs, 1 full time & 2part time jobs. For financial year 2015/16 my main full time job had the “NICategory D”, and my secondary jobs had “NI Category A”.

ince the new financial year 2016/17 hasstarted all 3 of my roles have the “NI Category A” which has increased my contributions.

Can anyone shed some light as to why this has happened? Also last year only 1 of my jobs was on the Tax Code BR but now this year 2 of them are and again im paying for contribution.

Category D NIC has now ended so you now pay NI rates at the standard rate (category A) rather than the reduced rate.

http://www.bdo.co.uk/sectors/public-sector/public-focus-newsletter/abolition-of-nic-contracted-out-rates

As for your tax codes more info would be needed. Assuming in your FT job you earn over £11,000 then BR would be correct in your additional jobs unless you are a higher rate taxpayer.

chrisbur

FirstTimeBuyer2016 wrote: »

Sorry if this is the wrong section for thisquestion but I saw someone mention NI contributions have gone up.

I currently have 3 jobs, 1 full time & 2part time jobs. For financial year 2015/16 my main full time job had the “NICategory D”, and my secondary jobs had “NI Category A”.

ince the new financial year 2016/17 hasstarted all 3 of my roles have the “NI Category A” which has increased my contributions.

Can anyone shed some light as to why this has happened? Also last year only 1 of my jobs was on the Tax Code BR but now this year 2 of them are and again im paying for contribution.

Your D rate NI was contracted out which meant a reduction in NI. This has now ended; some details here....
https://www.gov.uk/new-state-pension/youve-been-in-a-workplace-personal-or-stakeholder-pension

Regarding tax codes full details are needed to check this
Taxable gross tax paid tax code and basis for each job for last two payslips for last year and first payslip this year.

Would be best to start a new thread with these details to avoid confusion.

p00hsticks

FirstTimeBuyer2016 wrote: »

Sorry if this is the wrong section for thisquestion but I saw someone mention NI contributions have gone up.

You should really be starting a new thread for this rather than highjacking the OP's but as you've posted.....

FirstTimeBuyer2016 wrote: »

I currently have 3 jobs, 1 full time & 2part time jobs. For financial year 2015/16 my main full time job had the “NICategory D”, and my secondary jobs had “NI Category A”.

ince the new financial year 2016/17 hasstarted all 3 of my roles have the “NI Category A” which has increased my contributions.

Can anyone shed some light as to why this has happened?

It's as a result of the recent Pension reforms and introduction of the New State Pension as a resutl of which there is not longer an option to 'contract out' (which is what the NI CAtegory D signified)

As briefly as I can;

under the old pension rules, a person was either 'contracted in' or 'contracted out'.

'contracted in' people paid a higher rate of NI than 'contracted out' people ,but in return were contracted in to some additional state pension schemes (over different time periods SERPS - State Earnings Related Pension Scheme or S2P - State Second Pension) which would mean that they would get an additional state pension on top of the basic rate once they reached State Retirement Age.

You could only be 'contracted out' if your employer provided a 'defined benefits' pension scheme - you paid a lower rate of National insurance and so would only receive a basic state pension, but would also in return (hopefully) get a private pension to add to this.

The new State Pension reforms that came in in April have simplified matters by removing the notion of contracting in and contracting out - hence why it is sometimes referred to as a 'single tier' pension. Everone now pays the same rate of NI and will get the same amount of state pension depending on how many qualifying NI years they have. Currently this would be £155.65 if you have 35 qualifying NI years or more, although for people part way throguh their working lives who paid NI under the old scheme there are transitional rules which mean adjust this.

You can still belong to a defined benefits pension, but no longer pay a lowere rate on NI if you do (although you will now potentially get a sgnificantly higher state pension as well , as the old basic pensino was only £119.30)

FirstTimeBuyer2016 wrote: »

?Also last year only 1 of my jobs was on the Tax Code BR but now this year 2 ofthem are and again im paying for contribution.

you have a personal tax allowance of £11,000 (tax code 1100L) that HMRC can divide up among your jobs as you wish.

If you earn more than your personal tax allowance in your main job then it makes sense to have your whole tax allowance used for your main job and pay basic rate tax at 20% tax (tax code BR) on the other two. If you earn less that £11k in your main job, it would make sense to get in touch with HMRC and ask that they split your allowance over the three jobs to avoid you overpaying tax.

Note that if the total earnings across all three jobs is enoguh to make you a higher rate tax payer, then the BR code means that you will be underpaying tax, so you should also get in touch with HMRC to get your tax code adjusted to ensure you don't get a bill at the end of the year.

If all three jobs are PAYE, HMRC will eventually join the dots between the three jobs at the end of the yeart and either refund or bill you if you've paid too much or too little tax, but it's better to speak to get your tax codes adjsuted to avoid this.