Bonus takes me into 40% tax bracket, can I claim it back

lee19855

Hi,  my salary is 31k per year and I get bonuses here and there  - for example my last P60 was 37k.
This month and a few months ago I received over 4K in one month so I went into the 40% tax bracket and paid around  £500 in tax in that bracket alone, as well as hundreds of pounds in the standard 20% bracket.
I know that my P60 will say less than 40k and I believe the threshold is 50k for the 40%. My usual tax code is 1250 so I’m entitled to the standard allowance but due to private use of a company car my tax code is around 700.
Will I be able to claim a tax rebate for the 40% tax? I know those additional earnings that fell under the  40% rate will still be subject to 20% tax, but there will still be money left over that I did not owe (i.e. the difference between 40% and 20%).

Dazed_and_C0nfused

From what you've posted no, you won't be able to claim a refund.

PAYE is designed to collect the correct tax during the year in this scenario. 

If your tax code is on a non cumulative basis it may be different.

Can you post the details from your latest payslip, including your tax code.

lee19855

So, the tax paid on my pay slip is correct based on a stand-alone month. However, as the 40% only applies to an annual income of 50k and above, although it may be correct to deduct that level of tax based on that month, when it comes to the end of year and I’ve only earned say 37k, then it’s clear I should never have been taxed 40% at all because I’ve not hit the threshold.

I’m thinking on the same lines as student loan repayments. If you earn over the threshold in one month, you will pay a contribution. But if you earn under the threshold for repayments come end of year, then you can claim your payments back because you didn’t earn enough to be paying them. So my rationale for the 40% is the same.

I don’t have the details to hand right now, but if it is still needed to help answer the question after this response I can provide in due course.

Grumpy_chap

What is the BIK for the company car?

Dazed_and_C0nfused

lee19855 said:

So, the tax paid on my pay slip is correct based on a stand-alone month. However, as the 40% only applies to an annual income of 50k and above, although it may be correct to deduct that level of tax based on that month, when it comes to the end of year and I’ve only earned say 37k, then it’s clear I should never have been taxed 40% at all because I’ve not hit the threshold.

I’m thinking on the same lines as student loan repayments. If you earn over the threshold in one month, you will pay a contribution. But if you earn under the threshold for repayments come end of year, then you can claim your payments back because you didn’t earn enough to be paying them. So my rationale for the 40% is the same.

I don’t have the details to hand right now, but if it is still needed to help answer the question after this response I can provide in due course.

Any adjustment for the higher rate tax paid in that month will automatically be made the following month.  That is how PAYE works.

Unless you are on a non cumulative tax code.

You just need to provide details of the latest payslip.  What you expect to earn (taxable pay not salary) on your next pay slip would also be useful.