is pers allowance pro-rated?

MoneySavingMission

Please help.
I've worked 8 months of the tax year on a contract role.
Now I've got my P45, I know earnings and how much tax I've paid.
I want to reclaim the overpayment but the helpline just said the personal allowance is pro-rated based on the 8months I've worked and I can't claim earnings v's annual allowance.

Is this correct? I've mever heard of this before and it contradicts other web searches.

Dazed_and_confused

What helpline?

The Personal Allowance is never calculated on a pro-rata basis but your (ex) employer would have allocated your tax code on a pro-rata basis.

This is based on whatever pay period you were being paid for i.e. month 8 = 8/12ths of your tax code not your personal allowance. This assumes you were on a cumulative tax code.

To be honest you are probably over-complicating things.

What are you going to be doing income wise between now and 5 April 2018?

MoneySavingMission

HMRC helpline. My tax code is 1490L (cumulative) and they said I can't use the full amount of £14,900 v's earnings this year as I've only worked 8 months of the tax year so this allowance needs to be 8/12ths. I have never heard of this before. I hope I've been told incorrect information as this would impact the tax refund i'm due.

I'm looking for a new role but might claim JSA contrib until I secure a new role.

Dazed_and_confused

Personal allowance and tax code are completely different things.

Why is your tax code so high? What has increased it to 1490L? Full breakdown is needed really to make any sense.

If you sign on for JSA DWP will deal with any tax refund due, either when you sign off or at the end of the current tax year. Whichever happens first.

Alter_ego

You can reclaim the over payment April 2018. At this time you have not over paid

Nick_C

You have been correctly advised. If you get more work in the current year, then your new employer will look at your tax paid to date and your taxable allowance to date to work out the correct amount of tax to deduct or refund on your first salary payment.

If you do no further paid work this tax year, then you be able to reclaim any overpayment once the tax year ends.

MoneySavingMission

my tax code was adjusted based on contractor travel expenses etc.

1490L is my tax code so I should be allowed to earn 14900 annual (I know tax and NI is based on 12th for monthly pay) but I was told earlier that my £14900 needs to be pro-rated for the 8months if this is the only job of the tax year.

Thanks for replies this is really confusing.

I just hoped it would be total earnings less pers allowance v's the total amount of paye which has already been deducted and I should get a refund. Looks like i'll need to wait until I decide about JSA / tax year end which is frustrating.

Alter_ego

Perhaps the extra allowance will be pro rata

Dazed_and_confused

Personal Allowance is an absolute maximum of £11500.

Anything else is provisional until the year has ended and actual details are known.

If you got a refund based on tax code of 1490L then you would likely have to pay some back as your expenses(?) would potentially only be due for 8 months not 12 months.

Dazed_and_confused

If you don't claim JSA and are still out of work 4 weeks after the date on your P45 then you can claim a refund direct from HMRC. Google P50 unemployment refund claim.

But remember anything which happens during the year is only a stop gap, it will all need looking at again once the year ends. So you might be due more tax back or you might have to pay some back to HMRC, all depends on what happens next and your actual income, expenses etc.

MoneySavingMission

tax code was adjusted based on expenses Oct 2016 - April 2017. similar expenses have been incurred this tax year.

this is confusing. so to clear my pers allowance (which figures this year will show) can't be pro-rated. I believe I've paid the correct tax until now but if I don't earn in the remainder of the tax year, surely I'm entitled to the difference between pers allowance and tax paid refunded.