April overtime and the illusion of high earnings!

Pablosammy

Hi,

I'm doing a lot of overtime in April, and it's going to give the taxman the illusion that I'm going to earn a lot more over the year than I actually am. If you extrapolated this month's earnings out over the entire year, I'd be well above the higher tax bracket limit. However, over the year I'm actually going to fall just shy of it.

I'm a relatively recent graduate, so I don't fully understand how tax works yet. Will I pay lower-band tax until my cumulative pay reaches the limit, or will the taxman extrapolate to estimate my annual income? I don't fancy waiting a year to be able to claim it back, as it will be a substantial amount of money.

Is there any way of avoiding this over-taxation in the short term?

Pablosammy

That's not what I wanted to hear, but thanks anyway!

It's annoying that the month that gives the least representative estimate is the month furthest away from the date I'll be able to claim it back! Ah well, such is life. It'll be a nice little windfall when I get round to reclaiming it...

jem16

Pablosammy wrote: »

That's not what I wanted to hear, but thanks anyway!

It's annoying that the month that gives the least representative estimate is the month furthest away from the date I'll be able to claim it back! Ah well, such is life. It'll be a nice little windfall when I get round to reclaiming it...

You don't need to reclaim it and it won't take until next April to get it.

In April you will be taxed more. Over the next months you will get some back each month so that by the end of March you will have paid the correct amount.

CarolynH

It does kind of make sense - otherwise you'd pay no tax at the start of the year and a shed load at the end - it's just a shame the months won't 'work' for you this time.