Am I on emergency tax?

Nearlydebtfree

Hi

I would be grateful for some clarity if possible

I left my old job on 5 April 2024 and received quite a hefty last wage with unpaid holidays and bonus payments. I didn't realise that their payroll period ended 7 April 2024 so this took me into the new tax year and so used April's tax allowances (I assume). My tax code was 1313L.

My new employment which I started on 8 April pays on the last day of the month. I have just had my payslip and my tax code is 1313L 0 and I have more or less lost half of my salary to tax, NI and pension contribution. I was aware I was only going to receive 3 weeks wages and had accounted for this but I have lost about £900 which I didn't expect?

I have checked on HMRC and they have updated my payroll records as of 23/04/24 and my tax code is 1275L.

So, my question is will I ever receive the £900 back, am I on emergency tax and why does the tax man take so much money  

Thanks in advance

Dazed_and_C0nfused

Nearlydebtfree said:

Hi

I would be grateful for some clarity if possible

I left my old job on 5 April 2024 and received quite a hefty last wage with unpaid holidays and bonus payments. I didn't realise that their payroll period ended 7 April 2024 so this took me into the new tax year and so used April's tax allowances (I assume). My tax code was 1313L.

My new employment which I started on 8 April pays on the last day of the month. I have just had my payslip and my tax code is 1313L 0 and I have more or less lost half of my salary to tax, NI and pension contribution. I was aware I was only going to receive 3 weeks wages and had accounted for this but I have lost about £900 which I didn't expect?

I have checked on HMRC and they have updated my payroll records as of 23/04/24 and my tax code is 1275L.

So, my question is will I ever receive the £900 back, am I on emergency tax and why does the tax man take so much money  

Thanks in advance

No you're not on what most people would consider "emergency tax".

I don't know why you think you would get the £900 back 🤔

You have been paid twice in one tax period.  The first employer will have (correctly) given you your tax code allowances for month 1 of the tax year.  When the new employer paid you for a second time in the same tax month you would have no tax code allowances left and tax, possibly at 20% and 40% would have been (correctly) deducted.

You may get a little bit back if being paid twice in one month pushed you into hibernation rate tax when you won't be for the tax year as a whole.

Factoring in both jobs how much have you wanted (taxable pay) in the month to 5 May?

And again, factoring in both jobs, how much do you expect to earn for the tax year as whole 

Nearlydebtfree

Hi - thanks for the prompt reply. I was paid just under £10k for my last pay from my old employers. 

My new salary is £51250 so my total salary should be just over £60k for the tax year as a whole. I think my taxable pay for April is £1350 (this is an extreme one off and in my dreams it would ever happen again!)

My old employer's accounts department told me I should just be paid as normal when I queried being paid twice in the same month, as I did assume I would use all my tax allowances.

Will my salary just be as normal next month now and I won't be taxed so high again?

Sarahspangles

Nearlydebtfree said:

Hi - thanks for the prompt reply. I was paid just under £10k for my last pay from my old employers. 

My new salary is £51250 so my total salary should be just over £60k for the tax year as a whole. I think my taxable pay for April is £1350 (this is an extreme one off and in my dreams it would ever happen again!)

My old employer's accounts department told me I should just be paid as normal when I queried being paid twice in the same month, as I did assume I would use all my tax allowances.

Will my salary just be as normal next month now and I won't be taxed so high again?

Some of this month’s tax is presumably higher rate tax (HRT), but the proportion that is HRT won’t be so high in future months. Would you have paid the HRT if the payment from your former employer had been in 2023/24?

Dazed_and_C0nfused

Nearlydebtfree said:

Hi - thanks for the prompt reply. I was paid just under £10k for my last pay from my old employers. 

My new salary is £51250 so my total salary should be just over £60k for the tax year as a whole. I think my taxable pay for April is £1350 (this is an extreme one off and in my dreams it would ever happen again!)

My old employer's accounts department told me I should just be paid as normal when I queried being paid twice in the same month, as I did assume I would use all my tax allowances.

Will my salary just be as normal next month now and I won't be taxed so high again?

Assuming you mean £13,500, not £1,350 then you have earnt an nnual equivalent of £162k in April, so you have paid some higher rate tax.

Next month you have the normal tax code allowances at your new job and if you are paid an extra £4,270 your earnings at month 2 will be the equivalent of £106k/year so you will effectively get a refund of some of the 40% tax you have paid (not a real refund, just makes your month 2 tax less).

Another £4,270 in month 3 takes your annual earnings to just £88,160 and so on each subsequent month you earn £4,270.

You can probably use a calculator like listentotaxman to see the tax you pay next month and in subsequent months as well.

The above assumes your "salary" is all taxable (not always the case).

chrisbur

On a salary of £51250 (I am assuming this is taxable gross) you will be in the 40% tax band so there will be no unused 20% band to reduce tax for following months.  Looks like you probably paid some tax at 45% so that will be recalculated to 40% but tax code has gone down so that will offset some of that.
For a more accurate picture you need to give full details of taxable pay and tax paid on P45 and same for salary paid so far and expected going forward.