do you calculate your take home pay based on salary and tax code or salary inc taxable benefits ?

pete1975

hi all ive been looking to budget some more and ive been trying to work out different take home pays based on different salaries. Im looking to start this at for the new tax year in april 2021 so want to inform my company my plan. 
I get £8418 in taxable benefits and I know my tax code will be 618L in April

i've been using this online calculator,  and it has a tab for tax code, and then another for the taxable benefits per year. 
https://www.thesalarycalculator.co.uk/salary.php

i was playing around with a salary of £43500 and when i enter my taxable benefits its gives me a monthly net pay of £2602



and when I enter the same salary £51,858  43,500 + 8418 benefits and just use the tax code of 618L it gives me a monthly net pay of £3004

thanks

eskbanker

You need to use the tax code in your calculation, as that affects how much tax is deducted each month.

In terms of how to represent taxable benefits, are these benefits paid out as cash, e.g. an allowance, or are they benefits in kind such as a company car?

Why do you need to inform your company of anything?

pete1975

eskbanker said:

You need to use the tax code in your calculation, as that affects how much tax is deducted each month.

In terms of how to represent taxable benefits, are these benefits paid out as cash, e.g. an allowance, or are they benefits in kind such as a company car?

Why do you need to inform your company of anything?

ok thanks,  they are benefits in kind.
So i use tax code but do i base it on the salary inc the benefits (£51858) or just the salary minus the taxable benefits (£43500)
the benefits are private medical + AA membership

Im going to inform my company to reduce my taxable income and put more into a pension each month 

pete1975

so salary of £43500 using tax code 618L    - gives me a monthly net pay of  £2663

colsten

pete1975 said:

eskbanker said:

You need to use the tax code in your calculation, as that affects how much tax is deducted each month.

In terms of how to represent taxable benefits, are these benefits paid out as cash, e.g. an allowance, or are they benefits in kind such as a company car?

Why do you need to inform your company of anything?

the benefits are private medical + AA membership

These are taxable benefits so you need to include them in working out what your income tax is. Your tax code should make the appropriate provision. 618L means you have £6,180 personal allowance, which is £6,390 less than the max personal allowance. No idea how this relates to the £8,418 you believe you get in benefits in kind but your tax code will have been determined from information your employer gave the HMRC, and you should be able to see in your Personal Tax Account how it is calculated.

Your net pay is obviously affected by the income tax you pay but it wouldn't include the benefits in kind.

As your question is about tax and pension contributions, you may do better asking on the Tax board and/or on the Pensions board.

There is also good information about benefits in kind taxation on https://www.citizensadvice.org.uk/debt-and-money/tax/what-is-taxable-income/tax-on-benefits-in-kind

pete1975

colsten said:

pete1975 said:

eskbanker said:

You need to use the tax code in your calculation, as that affects how much tax is deducted each month.

In terms of how to represent taxable benefits, are these benefits paid out as cash, e.g. an allowance, or are they benefits in kind such as a company car?

Why do you need to inform your company of anything?

the benefits are private medical + AA membership

These are taxable benefits so you need to include them in working out what your income tax is. Your tax code should make the appropriate provision. 618L means you have £6,180 personal allowance, which is £6,390 less than the max personal allowance. No idea how this relates to the £8,418 you believe you get in benefits in kind but your tax code will have been determined from information your employer gave the HMRC, and you should be able to see in your Personal Tax Account how it is calculated.

Your net pay is obviously affected by the income tax you pay but it wouldn't include the benefits in kind.

thankyou,  ive had a bit of nightmare this year our private medical contribution nearly double and my work didnt apply the correct tax code back in june 2020 so HMRC applied a 348L tax code in october to recover the tax.    
I checked my online tax portal and its showing for april 2021 618l.
I will get use of fuel card which i anticipate will spend about £2000 a year on it, so ive just added that cost to the take benefits i had which is how i came to the figure of £8418

Just to make matters i reduced my taxable pay in July 2020 to pay more into my pension as we get CBT aswell, so im trying to reduce my taxable pay and pay into my pension and still allow CBT. 
I tried to create an excel for each salary so i could try to work out what would be most cost effective.   

colsten

OK, as I said, you'd be better asking tax questions on the tax board.

However, if you believe/know you get £8,418 benefits in kind, and if you want to smooth out your tax deductions, I would say your tax code for 2021-22 should be more like 415L. You should be able to tell HMRC through your personal tax code of the extra get, and close off your tax liabilities with a self assessment.

pete1975

colsten said:

OK, as I said, you'd be better asking tax questions on the tax board.

However, if you believe/know you get £8,418 benefits in kind, and if you want to smooth out your tax deductions, I would say your tax code for 2021-22 should be more like 415L. You should be able to tell HMRC through your personal tax code of the extra get, and close off your tax liabilities with a self assessment.

ok thanks,   i ask so many questions i think i literally drain people.   I think the problem is the fuel card because i dont know how much i will spend so ive only based it on rough figures of what i would spend each month

sheramber

The OP already has a thread running on the Cutting Tax Board.

theoretica

If you run the figures for your current situation through the calendar can you get it to match your latest payslip?  That will confirm how you should do it.

jimjames

pete1975 said:

colsten said:

OK, as I said, you'd be better asking tax questions on the tax board.

However, if you believe/know you get £8,418 benefits in kind, and if you want to smooth out your tax deductions, I would say your tax code for 2021-22 should be more like 415L. You should be able to tell HMRC through your personal tax code of the extra get, and close off your tax liabilities with a self assessment.

ok thanks,   i ask so many questions i think i literally drain people.   I think the problem is the fuel card because i dont know how much i will spend so ive only based it on rough figures of what i would spend each month

Do you actually get taxed on the fuel spend? I thought it was a fixed amount for that benefit?