PAYE tax over charged ? Please help.

udithap

Hi,

       I hope you all are well.  I have been employed ( only job for this financial year, Temporoally role ) for 4 months & 3 months contract. I have started first 4 months portion of the job in September & they have terminated the contract in December, 2020. They have given a new contract in January , 2021 which will be ending in March , 2021.  Since September I have made ( gross , before pension & tax etc) ,

 September - £1518

October - £1518

November - £2239

December - £990

January - £1395

Gross total is £7,660

They haven't deducted any PAYE tax for the last 4 months ( from Sept  to December 2020) but they have deducted £540 from January wages as PAYE.  I don't understand they have deducted that much as I'm struggling financially. I would appreciate if someone could explain why they have taken that much even though I haven't made more than £12,500. My Tax code is 1250L.

thank you.

McKneff

How much did you earn between April and August.
Including any benefits. It all counts together

udithap

I haven't claimed any benefits as I'm not entitled to. I was unemployed April to August hence this is my first & only job for this tax year which I started since September. Thank you

chrisbur

udithap said:

Hi,

       I hope you all are well.  I have been employed ( only job for this financial year, Temporoally role ) for 4 months & 3 months contract. I have started first 4 months portion of the job in September & they have terminated the contract in December, 2020. They have given a new contract in January , 2021 which will be ending in March , 2021.  Since September I have made ( gross , before pension & tax etc) ,

 September - £1518

October - £1518

November - £2239

December - £990

January - £1395

Gross total is £7,660

They haven't deducted any PAYE tax for the last 4 months ( from Sept  to December 2020) but they have deducted £540 from January wages as PAYE.  I don't understand they have deducted that much as I'm struggling financially. I would appreciate if someone could explain why they have taken that much even though I haven't made more than £12,500. My Tax code is 1250L.

thank you.

As ever with these problems it is the full details that will give the answer; to start with can you give the following from payslips for December and January
Taxable gross
Tax paid
Tax code plus anything following it eg 1 X 0 Cumulative Noncumulative
Gross pay to date
Gross this employment to date (if showing)
Tax paid to date
Tax paid this employment to date (if showing)

Dazed_and_C0nfused

Tax of £540 on pay of £1,395 seems very unlikely.  Unless your employer has double counted your previous earnings for some bizarre reason.

If the emergency tax code was used the tax deducted would be £70.

As chrisbur says full details are needed, particularly from the January payslip.

And tax isn't based on what you earn, it is taxable pay which counts so if you pay into a net pay pension scheme you will be overstating your taxable income figures.

[Deleted User]

I note that it was 4 month contract followed by 3 month contract and that January is the first month of the three month contract. Are you sure that the code is 1250L  on the second contract and not DO?

Dazed_and_C0nfused

I wouldn't be surprised if the op has been paying c5.75% in pension contributions.

That would make the taxable pay c£13,125.  Tax due on £13,125 at M10 is £540.

The £13,125 is £6,265 x 2 + £1,395.  Less pension contributions.

I could be totally off the mark though!

udithap

Hi thanks,

 December:-

Taxable gross - There is Only Gross pay - £990
Tax paid - 0.00
Tax code plus anything following it eg 1 X 0 Cumulative Noncumulative : 1250L
Gross pay to date - there is no gross pay to date but Taxable pay to date: £5870
Gross this employment to date (if showing) - not showing
Tax paid to date- 0
Tax paid this employment to date (if showing) - not showing.

January:-

Taxable gross - There is Only Gross pay - £1395
Tax paid - £540
Tax code plus anything following it eg 1 X 0 Cumulative Noncumulative : 1250L
Gross pay to date - there is no gross pay to date but Taxable pay to date: £7262
Gross this employment to date (if showing) - not showing
Tax paid to date- £540
Tax paid this employment to date (if showing) - not showing.

I have just found NO pension deducted from this month's wages.

thank you for your help.

[Deleted User]

Baffling! There should be no tax on taxable pay of £7262 by January (month 10) of the tax year. The only tenuous reason that I can come up with is that, on the premise that a P45 was issued between contracts, some weird figures were input incorrectly on the second contract from that P45.

Dazed_and_C0nfused

Even if the January pay was for a pay day on 1, 2, 3, 4 or 5 January (month 9 of the tax year) then no tax would be due on taxable pay of £7262.

But something is going wrong as taxable pay of £5870 + £1395 is £7265 not £7262.

But £5,870 + £5,870 + £1,395 = £13,135.

And the tax due for month 10 with pay of £13,135 and code 1250L is £542, remarkably close to the £540. 

So my money is on double counting by the employer for some reason.

[Deleted User]

May have a solution? Previous pay of £5870 inputted. January payment of £7262 inputted (January salary plus previous earnings again). This would result in taxable earnings to date of £13132 upon which tax of £543 would be due. The 5870 has been inputted twice?