Income Tax Query

beargirl

I was talking to a colleague about his wage and it transpired that is earning approximately £350 a month more than me although his wage is less. He said this is due to a tax code his sister set up for him (she's an accountant) which offsets tax and increases his allowance. Does this sound possible? It just seemed a bit odd to me!
Just to clarify I earn around £37000 and he earns £35000. Thanks in advance!

Asghar

beargirl wrote: »

I was talking to a colleague about his wage and it transpired that is earning approximately £350 a month more than me although his wage is less. He said this is due to a tax code his sister set up for him (she's an accountant) which offsets tax and increases his allowance. Does this sound possible? It just seemed a bit odd to me!
Just to clarify I earn around £37000 and he earns £35000. Thanks in advance!

It is possible, why don't you ask him what his Tax Code is?
Compare it with yours and it will be much easier to work out, instead of having everyone here guessing. Could be a number of things.

beargirl

Asghar wrote: »

It is possible, why don't you ask him what his Tax Code is?
Compare it with yours and it will be much easier to work out, instead of having everyone here guessing. Could be a number of things.

Thanks Asghar, forgot to add that! His code is 1221L, mine is 1150L.

Mahsroh

beargirl wrote: »

Thanks Asghar, forgot to add that! His code is 1221L, mine is 1150L.

Can't see how that equates to £350.00 per month.


1150L means tax free allowance of £11,500.00
1221L means tax free allowance of £12,210.00


Based on 20% tax that's a difference of £142.00 per YEAR.


There must be another factor increasing his take home pay. Most likely explanation is that you are contributing a much higher amount to a pension than he is?

Tom99

beargirl wrote: »

Thanks Asghar, forgot to add that! His code is 1221L, mine is 1150L.

That will make a difference of about £12 per month in tax.

beargirl

Mahsroh wrote: »

Can't see how that equates to £350.00 per month.


1150L means tax free allowance of £11,500.00
1221L means tax free allowance of £12,210.00


Based on 20% tax that's a difference of £142.00 per YEAR.


There must be another factor increasing his take home pay. Most likely explanation is that you are contributing a much higher amount to a pension than he is?

Ta Mahsroh,

The only thing I pay out is towards a student loan which works out at around £150 a month.

I should add that they also have responsibility for payroll, hence my posting on here to see if there was a reasonable explanation for the discrepancy before I raise it with my manager. Keeping my fingers crossed there is one.

Tom99

Its obviously not just the tax code. You need to compare each deduction from gross salary to see where the difference lies. What about pension contribution, do you pay more?

badmemory

There could be many things that give the colleague a higher tax code. Marriage allowance, prof memberships, clothes laundering, do any of those apply?

00ec25

badmemory wrote: »

There could be many things that give the colleague a higher tax code. Marriage allowance, prof memberships, clothes laundering, do any of those apply?

OP has already given the codes, they are not the explanation

to have a difference of £350 per month between OP and colleague's net pay would need one of them to be earning upwards of 5,250 extra per year pre tax (ignoring NI for simplicity) than the other. OP says the gross pay difference is only 2k.

Op is simply not aware of all the facts to explain the difference and is going by a hearsay comment that that an accountant has "fixed" a tax code.

Caz3121

have you both worked in the same place since the beginning of the tax year? If someone doesn't work for part of the year they will have unused personal allowance to catch up on although this would not tend to lead to a consistent delta like this
would need the full breakdown of ytd figures..

[Deleted User]

00ec25 wrote: »

OP has already given the codes, they are not the explanation

to have a difference of £350 per month between OP and colleague's net pay would need one of them to be earning upwards of 5,250 extra per year pre tax (ignoring NI for simplicity) than the other. OP says the gross pay difference is only 2k.

Op is simply not aware of all the facts to explain the difference and is going by a hearsay comment that that an accountant has "fixed" a tax code.

Plus the fact that it is the LOWER earner who has the higher take home pay