Tax has DOUBLED

mitchaa

kerhlkk wrote: »

Ok here goes, I work 25 hours per week and my rate was 8.50 per hour & paid aprox 47 pounds per month on 850 pounds wage. Now my rate has gone up to 8.92 per hour & my tax is 87 pounds on 892 pounds wage. So last month I brought home 812 pounds & thought that with my rise I would get a better pay this month. Not so I brought home 756 pounds ? So I received a pay rise but have had a fall in my take home pay. I am a single mum of one 6 year old, the reason for working the hours I do is that I dont start until 10am and finish at 3pm allowing me to take my daughter to school & collect her afterwards.

As has been said your comparisons here are not correct in the 1st place.

Because you are a mum you will have benefitted from other rises in CTC/CB and possibly WTC.

You will be better off, definitely.

This 10p tax issue is for adults under the age of 25 who are not entitled to WTC because of age and who are not entitled to CTC because they dont have children. OAP are also affected.

Have a look at this calculator...

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

£5000.....07/08 = £416.67 08/09 = £416.67 (Exactly the same)
£6000.....07/08 = £486.21 08/09 = £485.63 (-£0.58pm)
£7000.....07/08 = £552.04 08/09 = £543.13 (-£8.91pm)
£8000.....07/08 = £612.43 08/09 = £600.63 (-£11.80pm)
£9000.....07/08 = £668.26 08/09 = £658.13 (-£10.13pm)
£10000...07/08 = £724.09 08/09 = £715.63 (-£8.46pm)
£11000...07/08 = £779.93 08/09 = £773.13 (-£6.80pm)
£12000...07/08 = £835.76 08/09 = £830.63 (-£5.13pm)
£13000...07/08 = £891.59 08/09 = £888.13 (-£3.46pm)..Round about O.P ex
£14000...07/08 = £947.43 08/09 = £945.63 (-£1.80pm)
£15000...07/08 = £1003.26 08/09 = £1003.13 (-£0.13pm)..Break Even Point
£16000...07/08 = £1059.09 08/09 = £1060.63 (+£1.54pm)
£17000...07/08 = £1114.93 08/09 = £1118.13 (+£3.20pm)
£18000...07/08 = £1170.75 08/09 = £1175.63 (+£4.88pm)
£19000...07/08 = £1226.59 08/09 = £1233.13 (+£6.54pm)
£20000...07/08 = £1282.43 08/09 = £1290.63 (+£8.20pm)

£15000 being around the break even point and earnings above this you will be better off. As you can see the very maximum someone will lose through this 10p tax issue is earnings of £8000pa who lose a MAXIMUM of £11.80pm

You are losing no where near this maximum amount, your loss is only around £3.50pm.

That will be made up of and more through changes to your CTC/CB and WTC.

So yes you will be better off, you are not a loser of this but a gainer.

Its the people who earn less than £15000 have no kids and under the age of 25 (Or OAP) that lose out.

kerhlkk

Sorry I should have initially stated that I did not start this employment until August 2007 (waited until daughter at school full time before going back into employment), and so before then I was on benefits. Yes I do receive ctc & wtc but as yet have not received notification on what I am entitled to this year. My point was that surely we should be steering away from benefits if working and if you do receive a rise in pay then surely it should be reflected in the wage and not benefits ?

mitchaa

You were obviously paying less tax because you started work in August and had to use your full personal allowance. Because you are now in work your personal allowance will be split evenly over the 12 months rather than the 9 months (Aug-Apr)

So in your case you are only really down £3-4 pm due to this 10p tax abolition. Not a great amount in the scheme of things.

You'll probably receive +10x this amount in shortfall benefits which will make you financially better off.

I agree the government have gone about it the wrong way round hence the media coverage its had over the last few weeks.

You'll gain though so no worries there

greatidea

Heres another good table to see how the 10% tax rate effects you.

Its on http://www.payepeople.co.uk/about/fact_sheets.html

Inside Salary Table.

Theres even talk now about the minimum wage being increased to make up for the more tax that people pay!

But thats businesses that have to pay that not the government! It just means the government get even more tax!

Frugaldom

Mikeyorks wrote: »

Puzzled then ..... as you should be paying 20% rather than the 22% from previous. And be (mildly) better off for the same hours?

It's swings and roundabouts that I don't understand and it obviously works out right in the end - I either have a small tax bill to pay (which I'm assuming will now have doubled) or else HMRC end up owing me a rebate because my self-employed profits didn't clear the original 10% tax threshold.

The only other bit I wondered about was tax on bank interest. Does that mean we will be 2p per £ better off with the interest payments?

Millionaire

nykmedia wrote: »

The only other bit I wondered about was tax on bank interest. Does that mean we will be 2p per £ better off with the interest payments?

Interest was taxed at the 20% before the budget anyway and hasn't changed.

clearvisor

Mikeyorks wrote: »

Seems to add up to around £8800 per year? If that's your sole income and you're over 65 .... then no tax should be due. As the Chancellor gave you a substantial rise in personal allowances to £9030 wef from 6th April. So - allowances exceed income = no tax due?

A 'K' code indicates that your allowances are negative. K24 isn't a band ... it simply indicates your deductions (normally State Pension) exceed your allowances ... by £240 in this case. And your works payroll people add £240 to your works pension ... to get your overall tax right.

Sounds suspiciously as though the K24 is from last year (allowances £5225 minus State Pension {and a bit of interest?} = minus £240) ...... if you've just recently gone past 65? You should have had an enquiry form (P161) from HMRC. If not, sounds as though they don't have your d.o.b and they haven't given you the increased personal allowance? Check your Coding notice (P2) ... that will tell you. Then contact them.

Mickory ,thanks very much for info ,no I have only had the usuasl piece of paper saying what my pension was and ta that I have all through the year, is it P60,I was 66 early jan this year thats the only money I have ,regards clearvisor,

seven-day-weekend

mitchaa wrote: »

.

This 10p tax issue is for adults under the age of 25 who are not entitled to WTC because of age and who are not entitled to CTC because they dont have children. OAP are also affected.

Its the people who earn less than £15000 have no kids and under the age of 25 (Or OAP) that lose out.

Or early retirees on a small Occupational Pension.

Mikeyorks

clearvisor wrote: »

Mickory ,thanks very much for info ,no I have only had the usuasl piece of paper saying what my pension was and ta that I have all through the year, is it P60,I was 66 early jan this year thats the only money I have ,regards clearvisor,

If your earlier figures were correct (around £8800 per year in pensions) and there's no underpayments from earlier years (?) then your allowances (£9030) should exceed your income = no tax due.

You should have had a new Code Number (P2) dated mid-Jan 08 and applying (08-09) from 6th April. That shouldn't be K24 .... from what you have said. If it still is (or that's what your occupational pension people are operating on) then ring or write HMRC (detail on your P60 or P2)