New Job & Income Tax - Advice needed!

BamberBoing

Hi
Started a new job a couple of weeks ago, handed in my old P45 which was dated March 2020, I've been claiming UC since and my claim will continue due to low income and illness.  Got my first wage slip this morning and I've been placed on the OT tax code   
Any advice?  the GOV tax website suggest waiting 5 weeks before making a query but I've been taxed about a fifth of my wages which I can't afford to lose! 

Dazed_and_C0nfused

Nothing you can do now for this tax year but HMRC will automatically refund any excess tax deducted in the next few months.

In the meantime you could go on webchat or phone HMRC and get a new tax code issued - should likely be the emergency tax code of 1257L for 2021/22.  You will need to estimate your taxable earnings for the 2021:22 tax year so HMRC can calculate your code.

BamberBoing

Dazed_and_C0nfused said:

Nothing you can do now for this tax year but HMRC will automatically refund any excess tax deducted in the next few months.

In the meantime you could go on webchat or phone HMRC and get a new tax code issued - should likely be the emergency tax code of 1257L for 2021/22.  You will need to estimate your taxable earnings for the 2021:22 tax year so HMRC can calculate your code.

Thanks, my current 'emergency' tax code is OT. I've been advised that I will be allocated a standard tax code 'in the next few weeks and any excess tax will be refunded - Does that sound right?  I've never heard of a OT tax code but haven't worked in the last financial year, does that make a difference? 

Dazed_and_C0nfused

0T is not an emergency tax code.

It is a tax code often used when an employee hasn't complied with the new starter process (or an employee hasn't used the new starter information from the employee).  It means you aren't getting the benefit of any Personal Allowance.

Employers do not refund tax deducted in one year during the next tax year so you won't be getting any tax deducted in the 2020:21 tax year back via your wages.

I think your immediate issue is to get yourself into the emergency tax code (1257L from today) and if your Personal Tax Account shows your employer has reported the first payment to HMRC then HMRC should have either now issued a new tax code or you can contact them to get one issued.

To avoid getting things confused you need to keep each tax year separate, the tax deducted in 2020:21 will only ever be refunded by HMRC not by your employer.

unholyangel

BamberBoing said:

Dazed_and_C0nfused said:

Nothing you can do now for this tax year but HMRC will automatically refund any excess tax deducted in the next few months.

In the meantime you could go on webchat or phone HMRC and get a new tax code issued - should likely be the emergency tax code of 1257L for 2021/22.  You will need to estimate your taxable earnings for the 2021:22 tax year so HMRC can calculate your code.

Thanks, my current 'emergency' tax code is OT. I've been advised that I will be allocated a standard tax code 'in the next few weeks and any excess tax will be refunded - Does that sound right?  I've never heard of a OT tax code but haven't worked in the last financial year, does that make a difference? 

It's 0T - it gives you full use of rate bands but no personal allowance. 

When starting with a new employer and you have a p45, they will use that to get a tax code for your first payroll/s. If no p45 then they should get you to complete a starter checklist. If statement A is used then 1250L (cumulative) will be applied to the first payroll/s. If statement B then 1250L (non-cumulative). If statement C then BR. If no p45 and no starter checklist, it will default to 0T. These are interim codes - to give your employer a code to use while awaiting a coding notice from hmrc. 

You may be allocated a standard tax code in the next few weeks but I very much doubt you'll be refunded within the next few weeks. It's bad timing, with it being the start of a new tax year. 

BamberBoing

Dazed_and_C0nfused said:

0T is not an emergency tax code.

It is a tax code often used when an employee hasn't complied with the new starter process (or an employee hasn't used the new starter information from the employee).  It means you aren't getting the benefit of any Personal Allowance.

Employers do not refund tax deducted in one year during the next tax year so you won't be getting any tax deducted in the 2020:21 tax year back via your wages.

I think your immediate issue is to get yourself into the emergency tax code (1257L from today) and if your Personal Tax Account shows your employer has reported the first payment to HMRC then HMRC should have either now issued a new tax code or you can contact them to get one issued.

To avoid getting things confused you need to keep each tax year separate, the tax deducted in 2020:21 will only ever be refunded by HMRC not by your employer.

Hi, Firstly thanks for the quick reply - been trying to get help from the HMRC but they've stated I need to wait for 'at least five weeks' for the paperwork to be received between my employer and the HMRC?!

My employer has filled in the new starter info and has my P45, dated March 2020.  

I've done a income tax calculation - on MSE! and my wages are below the tax threshold - Does this mean I will lose the tax already paid?  OR - Would I have to wait till the next tax year (2022) for any excess tax paid to be refunded?

 

Dazed_and_C0nfused

I've done a income tax calculation - on MSE! and my wages are below the tax threshold - Does this mean I will lose the tax already paid? OR - Would I have to wait till the next tax year (2022) for any excess tax paid to be refunded?

Neither, the tax overpaid in the 2020:21 tax year should be automatically refunded to you by HMRC in the next few months.

https://www.gov.uk/tax-overpayments-and-underpayments/if-youre-due-a-refund

Have you checked your Personal Tax Account to see if the wages have been reported to HMRC yet and if a new tax code has been calculated?

Employers have to file payroll details using the Real Time Information system and this means on or before the wages payment is made.

BamberBoing

I've checked online, have to admit I didn't know I could do this! 

My tax code, online, is 1270, and my employers details are listed along with my probable income.

It appears that the tax paid already is in the 20 - 21 tax year, my pay date boing the 02/04 - Actually paid on the 1st due to good friday so assume all is good and any refund will be repaid by HMRC in due course?!

Cheers for the help!

BamberBoing

So...My online tax account shows I have a normal 1270 tax code, my employers details and my estimated income - all correct. Week two, payment two and I have again been walloped with a 20% tax bill and a monthly sized NI contribution!  I've spoken to work and apparently its down to HMRC getting the paperwork done. 

Really has put a dent on my finances! 

chrisbur

BamberBoing said:

 I have again been walloped with a 20% tax bill and a monthly sized NI contribution!  

Both the P45 or the starter form should have been enough to get you onto the emergency tax code (assuming you did not select option C on the starter form) but there are some employers who are not fully acquainted with the correct procedures and tend to use 0T and BR  when they do not need to.  Not sure that you can do much else apart from again asking HMRC to issue a tax code.
Regarding the NI what you say suggests that you find the NI to be excessive though if the monthly rules were applied to a weekly payment you would actually be paying less than you should.  Can you advise the NI figure and the gross pay so that the figure can be checked?