My tax code is 522L 1...

moneysavexpert1986

...because I worked for an agency and switched to another agency without getting a P45. I didn't pay a penny of tax on the first £3000 I earned in the 2007-8 tax year but when I switched to the new agency I started paying tax immediately at about 12%. By the time April comes I will have earned about £10,000.00 in the year. I finished university in June 2007 but I don't know if I was technically a student til September for tax reasons or something. Can anyone tell me whether I should be due a tax refund? Thanks

fengirl_2

Yes, as you are on emergency code, you need to get this sorted out. You need to ask your previous employer for your P45 and hand it stright to your new employer who will make the refund. You need to act quickly as its near the end of the tax year and you dont want to have to wait for HMRC to refund you.

moneysavexpert1986

fengirl wrote: »

Yes, as you are on emergency code, you need to get this sorted out. You need to ask your previous employer for your P45 and hand it stright to your new employer who will make the refund. You need to act quickly as its near the end of the tax year and you dont want to have to wait for HMRC to refund you.

I requested a P45 from the old agency and I've sent it to the new one. They say they've forwared it to their payroll dept and they will send it to the IR to ask for confirmation of a new tax code. The agency told me to chase the IR up too to hurry things up. Incidently, do you happen to know whether I would have been classed as a student until September? That would be nice

WestonDave

Doesn't matter if you were a student until September or not - your income in the tax year is in excess of £5225 and as such you will pay tax on the excess - 10% on the next roughly £2200, and 22% on anything above that. There is a myth that students are exempt from tax but this is just that. The P38 form you sign as a student specifically states that you are exempt from tax if your income is less than the personal allowance - its normally assumed students only have time for odd bits of casual work and won't exceed their allowance.

Tax works cumulatively and your current agency will have allowed (up to the end of January) 10/12ths of the £5225 allowance against your income from them before deducting tax. However they weren't aware of the previous £3000 on which tax hasn't been deducted. It is likely that in fact when the p45 is processed you will get clobbered for the tax on the £3000 on your next payslip!

edited - it appears you might be on a month 1 code in which case you will only have allowances given for the months you worked for the new agency which may leave some to set against the old £3000. This may mean you don't get clobbered by expect to have paid £750 plus of tax by April on £10k earnings.

moneysavexpert1986

WestonDave wrote: »

Doesn't matter if you were a student until September or not - your income in the tax year is in excess of £5225 and as such you will pay tax on the excess - 10% on the next roughly £2200, and 22% on anything above that. There is a myth that students are exempt from tax but this is just that. The P38 form you sign as a student specifically states that you are exempt from tax if your income is less than the personal allowance - its normally assumed students only have time for odd bits of casual work and won't exceed their allowance.

Tax works cumulatively and your current agency will have allowed (up to the end of January) 10/12ths of the £5225 allowance against your income from them before deducting tax. However they weren't aware of the previous £3000 on which tax hasn't been deducted. It is likely that in fact when the p45 is processed you will get clobbered for the tax on the £3000 on your next payslip!

edited - it appears you might be on a month 1 code in which case you will only have allowances given for the months you worked for the new agency which may leave some to set against the old £3000. This may mean you don't get clobbered by expect to have paid £750 plus of tax by April on £10k earnings.

Oh !!!!!!! So £10,000.00 of earnings should result in £750.00 of tax? Although I wasn't charged at all on the first £3000.00 I have already paid over 600.00 tax and 340.00 NI on the 5000.00 I have earned so far at the new agency.

chrisbur

moneysavexpert1986 wrote: »

Oh !!!!!!! So £10,000.00 of earnings should result in £750.00 of tax? Although I wasn't charged at all on the first £3000.00 I have already paid over 600.00 tax and 340.00 NI on the 5000.00 I have earned so far at the new agency.

Assuming that your tax code is 522L or thereabouts then £10,000 taxable income for this tax year will mean £784 tax is due.
On these figures I cannot be absolutely precise but as you say you have paid over £600 pounds tax it looks like you will not be far adrift at the end of the year. If your P45 is processed in time then your tax should be spot on.

You did not pay anything on the first £3000 because you were getting a tax free allowance which started in April which was building up so that when you started work in September it was higher than your earnings for some time. If you earn about the same every month then your tax is about the same every month, but if your earnings start half way through the year then tax is like yours, with a period at the beginning when none is due.

Did you have any earnings while you were a student which tax was not paid on. If this is the case then some tax may be due on these.

If you want to advise your taxable gross, tax paid, tax code and month number from your last payslip along with the total earnings from any jobs or taxable benefits prior to this then a better estimate can be made.