income tax

[Deleted User]

bonny1975 wrote: »

So my total pay in April was £3,677.83
I then take off £50 for childcare vouchers leaving £3627.83

The tax due on £3627.83 is exactly £517 per month.

As agrinall says, with the pension deduction of £300 the tax would be £457 - the difference being 20% of £300.
So is it salary sacrifice? If yes - the tax is incorrect. If not it's correct.

[Deleted User]

bonny1975 wrote: »

thanks for your help... so my tax code for last year was 1185L and my new payslip is 1250L.
my tax last year was 12,758 Plus 4,502 in NI payments.
And this year its just what I have paid in my April pay - £517 in Tax and £349 in NI payments. is it worth mentioning that I also pay £300 to my pension/ month and I have £50 taken off for Child care vouchers?

That figure of £12758 cannot be correct - more than double what it should have been.

bonny1975

Thanks for all of your help, I think I will get in touch with the IR. I do think there is a mistake somewhere

chrisbur

bonny1975 wrote: »

thanks for your help... so my tax code for last year was 1185L and my new payslip is 1250L.
my tax last year was 12,758 Plus 4,502 in NI payments.
And this year its just what I have paid in my April pay - £517 in Tax and £349 in NI payments. is it worth mentioning that I also pay £300 to my pension/ month and I have £50 taken off for Child care vouchers?

Not exactly the figures I asked for but these are interesting and may point to the answer.
Assuming that you have quoted them correctly then a tax figure of 12758 on tax code of 1185L would indicate taxable gross earnings of over £60000.
The NI figure indicates that this was not evenly spread over the year and as you are apparently comparing earnings at the end of last year with earnings at the beginning of this year I would assume you earned a higher salary at the first part of the year than at the end of the year.
If this is the case then for the first part of the year you would have been paying some tax at 40% but then when your income reduced each payday some of the tax you had paid at 40% would have been converted to tax at 20% This would have the affect of reducing your monthly tax figure.
When the new tax year started everything starts off afresh and no more 40% being reduced to 20% so your tax figure seems to have gone up; in reality it was your old tax figure that was going down.
At the moment only a theory but if you can give the exact figures that I asked for I can check them properly.

agrinnall

bonny1975 wrote: »

Thanks for all of your help, I think I will get in touch with the IR. I do think there is a mistake somewhere

It's unlikely to be an issue with HMRC, if there is a fault it'll be in the way that your employer is operating their PAYE system. However, if you answer all of the questions that have been asked it should be possible to determine whether your tax is correct or not.

chrisbur

In the first post the OP says " I noticed that my tax and NI has increased by £90, "

Looking at the monthly taxable earnings that we have and using the tax NI figures for these making no adjustment for any previous earnings ( figures taken from listentotaxman)

Last year £3520.66 tax £506.48 NI £338.24

This year £3627.83 tax £517.08 NI £349.02

Tax plus NI is up by £21.38

If we now look at last year assuming that the early part of the year had higher earnings which took the OP into the 40% band and now with lower earnings some tax is being converted from 40% to 20%

The monthly figure for 40% tax was £3862.50
The OP had monthly earnings of £3520.66
So earnings fall below that 40% threshold by £3862.50 less £3520.66 which is £341.84 This figure gets converted from 40% to 20% so OP gets a tax reduction of £68.37 This is deducted from the £506.48 to give a tax figure of £438.11
Figures are now
Last year £3520.66 tax £438.11 NI £338.24

This year £3627.83 tax £517.08 NI £349.02

Tax plus NI differance is now £89.75

This is I believe the £90 the OP is seeing; allowing for a bit of rounding by the OP and in the figures I used.