Contractor- Crazy on This Tax Deduction

dranzer01

I just sent my umbrella company my last companies P45 (where I was permanent) - 

What I want to find out is, what will the deductions be from next week and the week after that. If this is what government wanted, then they've royally got their wishes.

Grumpy_chap

Did you ask the UC to explain?

Given your day rate £450, so £2,250 per week, it seems odd that they presented a pay-slip showing £4k gross.  If that is the UC error, then they need to correct it.  If that £4k is correct, the UC need to explain it (could it be a period longer than 1 week?)

Dazed_and_C0nfused

From the original post

I have now received two weeks worth of billings (as timesheet(s) were approved late) 

sheramber

I have now received two weeks worth of billings (as timesheet(s) were approved late) , 

So 2 weeks wages paid in the 1 week.

chrisbur

Your employer has treated this payment as being for just one week so as advised tax is higher than if it had been done as two separate weeks.  Your tax position will be recalculated when the P45 is applied and if any adjustment is required it will be done then.  By paying this as if it was just one week's pay your employer has calculated the wrong national insurance.  In circumstances like this NI should have been calculated on each separate week so you have paid less NI than you should have.  I do not know the split of the wages but assuming a 50/50 split the NI should have been about £73 higher.  

Thrugelmir

dranzer01 said:

I just sent my umbrella company my last companies P45 (where I was permanent) - 

That will resolve your (temporary) problem. The amount of tax you pay will self correct as each payroll is run for the remainder of the tax year. . 

dranzer01

Extremely knowledgeable people in here - thanks for all the updates I appreciate it all!!

dranzer01

To update you guys, it seems my weekly pay has corrected itself (however, for it to properly seem that it has, I will give an appropriate update next week friday).

It seems I was reimbursed the tax of £1,800 and the weekly pay seems to have gone up from £1045 to around £1,800. The total coming my way was approx £3100.

Student loan last week was around £320 and now it shows as £143.

Employee NIC now shows as £114

(I gave them my P45 from my company I left in June 2020 which had the tax code 1257L) -

In this current position, I was on the tax code 1257L W1 (So that in itself has changed as well taking off the W1)

Dazed_and_C0nfused

(I gave them my P45 from my company I left in June 2020 which had the tax code 1257L) -

In that case they should still be using the emergency tax code (1257L) on a non cumulative (week1/month1) basis.
https://www.gov.uk/new-employee-tax-code

Unless HMRC have issued them with an updated code?

chrisbur

In previous posts tax deducted was aprox 33  first week and aprox 1400 second week.  We now have aprox £1800 tax refund.
This suggests that HMRC have issued new code and also some previous pay and tax for this year.  
To check tax can you advise from payslip the taxable gross to date and tax paid to date.

Also an NI figure of aprox 114 and a student loan of 143 (assuming plan 1) is in line with a gross nearer to £2000 than £1800  perhaps something to do with being through umbrella I am not well acquainted with these systems.