how much tax should he be paying?

janie63

My son turned 16 in August and works on a modern apprenticeship scheme with HSBC. He's paying tax on his earnings and his wage slip shows he's on tax code 522L - should he be on this band? Should he be paying tax at all?

Can anyone help?

Thanks in advance.

CIS

He will pay tax on his earnings, being 16 or an apprentice does not stop a person paying tax.

£522L is the standard tax free allowance .

chrisbur

janie63 wrote: »

My son turned 16 in August and works on a modern apprenticeship scheme with HSBC. He's paying tax on his earnings and his wage slip shows he's on tax code 522L - should he be on this band? Should he be paying tax at all?

Can anyone help?

Thanks in advance.

Do you know if he is being taxed on a cumulative basis or is he on a week 1 or month 1 basis. When did he start at HSBC, did he work anywhere before that. Does he have any other earnings or income. Has he had a notice from the tax office advising him of this code. Does he recieve any benefits from HSBC eg. medical insurance, cheap loan etc. Can you advise his gross and tax figures.

CLAPTON

what does his wage slip say
a. his gross earnings to date are
b. his tax to date are
c. which month or week
d. are there any letters/numbers after his tax code i.e. does it read 522L M1 or 522L WK1

janie63

This is his first job and he started in September. He has no other income and has no benefits etc.His payslip says 522L. His taxable earnings to date is £3803.08. His tax to date is £363.30. This info is from his December payslip.

Thank you in advance for this help!

sammyjammy

It is correct that your son pays tax, his earnings are well above the lower earning limit and threshold for tax, my taxable earnings YTD are £16,504 and I've paid £2552 in tax so far this year with the same tax code so it looks about right given that he'll not work the whole year, he will I would imagine pay even more tax from April as its the start of a new tax year and he will be likely to work for the whole year.Sam

JasonLVC

Here's a useful salary calculating tool, assuming the normal tax code of 522.

http://www.thesalarycalculator.co.uk/salary.php

It's not accurate to the penny but close enough to show whether the pay packet is wrong.

CLAPTON

janie63 wrote: »

This is his first job and he started in September. He has no other income and has no benefits etc.His payslip says 522L. His taxable earnings to date is £3803.08. His tax to date is £363.30. This info is from his December payslip.

Thank you in advance for this help!

This seems incorrect to me.

For Dec is should have

tax free allowance for year = 3919 (i.e. 5225 x 9/12)
tax allowance at 10% for year = 1673 (i.e. 2230 x 9/12)

so if he has only earned 3803 to date he should have paid no tax yet.

I think he is being being taxed on a 522L M1 (Month 1) code which is an emergency code.

I can check this if you can you say his gross and tax for december was.

Johnhowell

CLAPTON wrote: »

This seems incorrect to me.

For Dec is should have

tax free allowance for year = 3919 (i.e. 5225 x 9/12)
tax allowance at 10% for year = 1673 (i.e. 2230 x 9/12)

so if he has only earned 3803 to date he should have paid no tax yet.

I think he is being being taxed on a 522L M1 (Month 1) code which is an emergency code.

I can check this if you can you say his gross and tax for december was.

The whole tax allowance should be applied over the part year, ie Sept - March.
If the allowance is applied over the whole year then he will be due some tax rebate based on the total income for the whole tax year (albeit earning only from Sept).

Regards,
John

CLAPTON

Johnhowell wrote: »

The whole tax allowance should be applied over the part year, ie Sept - March.
If the allowance is applied over the whole year then he will be due some tax rebate based on the total income for the whole tax year (albeit earning only from Sept).

Regards,
John

I dont understand what you are saying... I'm trying to work out whether his tax to date (i.e. December 2007 ) is correct.... for that you apply the part allownace i.e. april-dec (9 months)

chrisbur

janie63 wrote: »

This is his first job and he started in September. He has no other income and has no benefits etc.His payslip says 522L. His taxable earnings to date is £3803.08. His tax to date is £363.30. This info is from his December payslip.

Thank you in advance for this help!

These figures look to me as if he is being taxed on a month 1 basis. His payslip will proberbly have a box after the tax code with something like M1 or just a 1 in it, possibly an X they do vary a bit. When he started was he given a P46 form to complete this would ask him to tick either box A, B or C
Quote from P46 below; link to see what it looks like here http://www.hmrc.gov.uk/forms/p46.pdf

"Please read all the following statements carefully and
tick the one that applies to you.

A

– This is my first job since last 6 April and

I have not

been receiving taxable Jobseeker’s

Allowance or taxable Incapacity Benefit
or a state or occupational pension.
OR
B – This is now my only job, but since last 6 April
I have had another job, or have received
taxable Jobseeker’s Allowance or Incapacity
Benefit. I do not receive a state or
occupational pension.
OR
C – I have another job or receive a state or
occupational pension."

If he signed option A he should have been put on a cumulative code of 522L but if he signed option B he will have been put on a Month 1 code for 522L.

If he signed A he needs to speak to his payroll department to see why they are not using a cumulative code. If he signed B then the tax office will eventually sort it out but a phone call to them might speed it up.

In this case the salary calculating tool will not work as they are set up to assume earnings are broadly the same every month, in your son's case his earnings were not as he had none to September.

C
B
A