This doesn't look right but HMRC say tax code is correct!?

xylophone

It has just occurred to me that in earlier posts you mentioned that your wife claims CB for two children - however, even after a gross pension contribution of £33,000, your adjusted net income is over £50,000.

Has an allowance for this been made on your tax code?

And your NI doesn't seem correct?

zagfles

bavli wrote: »

Thank you. My payslip for March (so previous tax year) says;

Total pay: £7,333.33
Tax: £1,595.85
NI: £419.23
Pension: £2,200
Net pay: £3,118.25

Does that look correct to you? I know my company changed to a different system in April which seems to have been when things went crazy with the pay. .

Assuming a tax code of 2422L that looks spot in for a RAS scheme, ie contributions taken after tax.

So they've changed it to sal sac in April but the pension provider is still seeing the contributions as employee contributions and giving tax relief! This is a massive error and presumably applies to other employees as well - suggest you get onto payroll/finance whoever looks after this in your company and gets them to sort it asap!

Stakeholder schemes should be able to accept employer contributions (sal sac counts as employer contributions), but they need to know it's employer contributions and so not claim tax relief. Sounds like your company haven't told them.

zagfles

xylophone wrote: »

It has just occurred to me that in earlier posts you mentioned that your wife claims CB for two children - however, even after a gross pension contribution of £33,000, your adjusted net income is over £50,000.

Good point, or perhaps contributing a bit more to get ANI below £50k (ANI is baiscally taxable income after pension conts plus a few other bits which usually don't apply).

Has an allowance for this been made on your tax code?

And your NI doesn't seem correct?

Looks spot on to me.
Last year, PT = 672, UEL = 3532, this year 672 & 3583

March: (7333.33 - 3532)*0.02 + (3532 - 672)*0.12 = 419.23

April & May (after sal sac - halving the "to date" totals):
(5133.33 - 3583) * 0.02 + (3583 - 672) *0.12 = 380.33
total 760.66

bavli

xylophone wrote: »

It has just occurred to me that in earlier posts you mentioned that your wife claims CB for two children - however, even after a gross pension contribution of £33,000, your adjusted net income is over £50,000.

Has an allowance for this been made on your tax code?

And your NI doesn't seem correct?

Yes, I know and I am prepared to pay anything back via my tax return. It is more about retaining her stamp than the money.

bavli

zagfles wrote: »

Good point, or perhaps contributing a bit more to get ANI below £50k (ANI is baiscally taxable income after pension conts plus a few other bits which usually don't apply). Looks spot on to me.
Last year, PT = 672, UEL = 3532, this year 672 & 3583

March: (7333.33 - 3532)*0.02 + (3532 - 672)*0.12 = 419.23

April & May (after sal sac - halving the "to date" totals):
(5133.33 - 3583) * 0.02 + (3583 - 672) *0.12 = 380.33
total 760.66

What is my taxable income (for child benefit) if I am paying £26,400 into my pension on a gross salary of £88k? I have been told several different ways of working it out and both give me different taxable incomes? Thank you.

xylophone

I had not accounted for salary sacrifice though had questioned this in a previous post.

Something else that occurs to me - the OP says above that his company would not agree to salary sacrifice.

If there has been a change to a SS arrangement, does this not amount to a change in terms and conditions to which an employee would have to agree?

The company does not appear to have contacted the employees?

And shouldn't the payslip show a reference salary, salary exchange etc?

Thoroughly confused myself now...:(

sheramber

bavli wrote: »

Yes, I know and I am prepared to pay anything back via my tax return. It is more about retaining her stamp than the money.

Your wife can still get the NI credit without receiving the money.

bavli

xylophone wrote: »

I had not accounted for salary sacrifice though had questioned this in a previous post.

Something else that occurs to me - the OP says above that his company would not agree to salary sacrifice.

If there has been a change to a SS arrangement, does this not amount to a change in terms and conditions to which an employee would have to agree?

The company does not appear to have contacted the employees?

And shouldn't the payslip show a reference salary, salary exchange etc?

Thoroughly confused myself now...:(

Yes exactly this. I asked about a year ago if they could introduce salary sacrifice as it looked like it would be good for both employees and employer. At the time they said it would not be worth it for them? So I was surprised that they would not introduce it. Could there be any other explanation than covert salary sacrifice introduction? Surely it would change the terms of my contract as it would reduce my pay (isn't that how ss works?).

zagfles

xylophone wrote: »

I had not accounted for salary sacrifice though had questioned this in a previous post.

Something else that occurs to me - the OP says above that his company would not agree to salary sacrifice.

If there has been a change to a SS arrangement, does this not amount to a change in terms and conditions to which an employee would have to agree?

The company does not appear to have contacted the employees?

And shouldn't the payslip show a reference salary, salary exchange etc?

Thoroughly confused myself now...:(

Yes it's definitely a change to T&C's, there is no way the company should be imposing sal sac without agreement. It looks like the employer/payroll simply don't know what they're doing, or that someone has made a huge cockup.

zagfles

bavli wrote: »

What is my taxable income (for child benefit) if I am paying £26,400 into my pension on a gross salary of £88k? I have been told several different ways of working it out and both give me different taxable incomes? Thank you.

It's salary minus gross contributions. So if it's sal sac, it's just your salary since that's already reduced by your gross contributions. If it's a RAS scheme then it's salary minus grossed up pension conts eg £26400 net to a RAS scheme = £33,000 gross.

There are other minor issues like you can take gift aid off, some trade union subs need adding back etc - see https://www.gov.uk/guidance/adjusted-net-income