Income tax at higher rate

Snowball2019

Hi all, 

I'm not sure if this is the correct area to post in as I'm not actually trying to cut tax, I just want to understand a little more how it works and my payroll department haven't been able to advise.

My basic salary is 32k, however I recieve a quarterly commision which means im now in the the higher rate tax bracket. Does this essentially mean that my remaining salary payments for this financial year will be taxed at higher rate tax of 40%? Ie, £2700 -40%? Or is my tax free allowance spread through out the year so I'll benefit from some of this in my remaining two salary payments for the year (these will be without any commision)?

I guess this then resets come April and I revert back to 20% rate? My tax code is still 1257L.

From what I can see in my payslips my taxable pay YTD is £60k and I've paid £13.6k tax and £3.3k NI 

Thanks in advance 

chrisbur

As at month 10 you will only have received 10/12 of your tax free allowance and 10/12 of your 20% tax band allowance.  Each month for the last two months of the tax year you will get 1/12 per month of these two allowances so you will not be paying 40% tax on all your earnings.  As your earnings for these last two months will not use all of the increase in your 20% tax band some of the tax you have already paid at 40% will be converted to tax at 20% resulting in your tax due being less than would normally be due if you had not paid this tax at 40%.

Snowball2019

chrisbur said:

As at month 10 you will only have received 10/12 of your tax free allowance and 10/12 of your 20% tax band allowance.  Each month for the last two months of the tax year you will get 1/12 per month of these two allowances so you will not be paying 40% tax on all your earnings.  As your earnings for these last two months will not use all of the increase in your 20% tax band some of the tax you have already paid at 40% will be converted to tax at 20% resulting in your tax due being less than would normally be due if you had not paid this tax at 40%.

Crikey, complicated stuff this tax business! Thankyou very much for taking the time to respond, that makes a bit more sense now (I think)! Much appreciated