Tax rebate due to bonus going into higher rate?

welly_59

My estimated income for this tax year will be roughly £39k which is well within the basic rate of tax. But in March coming up i will be due a bonus payment which will bring my monthly pre-tax income to around £8k (i have included this in my 38k annual income), and therefore i will be paying arounf £1400 of higher rate tax that month.

My question is will i be due a rebate on this extra tax after HMRC have calculated all their gubbins during april-june?

tldr bonus pushed my monthly pay into higher tax bracket, but annual will be below, will HMRC give me a rebate?

Dazed_and_confused

(i have included this in my 38k annual income),

No repayment will be due.

If your taxable income by month 11 is £30k and then you receive £8/9k in month 12 your employer will deduct the correct tax and no higher rate tax will actually be paid.

The only exception to this would be if your tax code was being operated on a non-cumulative (emergency) basis. But if you know in advance about this payment you can easily circumvent this problem. Wait till your employer has calculated your month 11 payslip then phone HMRC and insist they re-issue your tax code on a cumulative basis and your employer should then deduct the correct tax in month 12.

welly_59

my current tax code is 957LX, due to be changing jobs part way through the year and underpaid previous year due to employer mishap.

From what im reading the X means non-cumulative?

So on that basis should i contact HMRC and ask them to re-code me after my month 11 payslip has been generated for a non-X tax code?

Dazed_and_confused

Yes it does.

You can try and persuade them to issue an amended code or you will need to wait until you get your P60 and contact HMRC or they will review it in due course and refund you (think you being optimistic with Apr-Jun though for that).

If the only deduction in your tax code is to collect the tax owed from when you changed jobs then HMRC simply need to remove that and issue you with a 1185L code on a cumulative basis. With details of your previous employment earnings as well.

Then when your new employer uses that information your tax should be spot on (unless there is income you haven't as yet mentioned).

welly_59

no income i havent previously mentioned. When i changed jobs my new employer didnt take my previous income into account so during my first month of employment (month 3), they classed it as if i hadnt earned anything during month 1 and 2

welly_59

would HMRC be receptive to issuing me a non-cumulative code to assist with the bonus tax issue or would they be more likely to tell me to suck it and wait for rebate during the summer?

MDMD

welly_59 wrote: »

would HMRC be receptive to issuing me a non-!!! code to assist with the bonus tax issue or would they be more likely to tell me to suck it and wait for rebate during the summer?

Do you mean receptive to issuing a cumulative code? As long as you are happy that there will be no tax underpaid you can insist on a cumulative code.

welly_59

yes i shortened CUMulative and the swear filter blocked it If i can insist on it then that will be awesome!

welly_59

phoned the tax office and they have changed my code as agreed so all sorted. I'll take a little hit next month but will gain on not paying higher rate in month 12