Daughter’s first full time job-tax?

DebsyWake

Hi, looking for advice for my daughter who is 21 and just finished her degree. She started her first full time job in June and has yet to pay any tax. Her gross pay per annum is about £22k. As she started in mid June, I’m guessing she will only pay tax on about 10 months of her annual pay this year (June to March).
what she needs to know is, will she not be taxed until she reaches her tax free amount (£12750) this year and then at 20% what tax is she likely to pay once she has earned this amount? 

We were expecting once they realised she was earning this amount each month that they would start taxing monthly tax.
She needs to know if she should be saving money ready to be taxed heavily after she has reached her tax free amount.
does that make sense?
any help much appreciated.
thanks

Flugelhorn

her employer should get a tax code from the HMRC - did she complete a "new starters form"? 

Penguin_

HMRC should send her tax code to the employers following the first FPS including her being sent by the employer.

In the absence of a P45,  P46 (new starters form) should have been completed by her where she would have ticked box A or B & she would have been given a 1257L tax code.

She will be taxed when she reaches the cumulative tax free limit, so £12570/12 = £1047.50, given she started in June & earned £1833.33, I would expect this to happen in August so there is no need to save for tax. 

Dazed_and_C0nfused

No, she will start paying tax when her annualised earnings exceed her tax code allowances.

So if she's on the emergency tax code of 1257L on a cumulative basis that's £1,048 per month throughout the tax year.

So if say by tax month 9 (month to 5 January 2024) she has only earned £9,000 then no tax will be payable as she is only earning £12,000/year (£9,000 ÷ 9 x 12)

If by month 10 she has earned £11,500 then she would pay some tax as her annualised income is £13,800 (£11,500 ÷ 10 x 12).

sheramber

You get 1/12 of the personal allowance for each month. Sp she has unused allowances for April amd May to add to her month's allowance for June.

She won't pay tax until her pay to date exceeds her personal allowance to date.

DebsyWake

Thanks everyone, she did complete a new starter form and has the tax code 1257L.