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Tax - TSR guide and questions thread

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Applying to Uni? Let Universities come to you. Click here to get your perfect place 20-10-2014
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    (Original post by adam_zed)
    I know **** all about tax. In fact I dont even understand why I am being taxed. But anyway, I have a sizeable amount that I am trying to claim back and I have no idea about how to go about this.

    I have received my P60 from my work and was wondering if someone could enlighten me as to where I go to now in order to turn this unimpressive document into money in my bank?

    Thanks
    Presumably you're looking to reclaim an overpayment for the last tax year? Did you earn less than £6,475? As above, you can try ringing them, but you might be better served by writing to your tax office, with a copy of your P60, and explaining that you think that you're due a refund.
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    Hi, I don't know whether this is really the right place to ask this as it isn't about general employment, but if anyone can help, I'd greatly appreciate it. I'm helping out at some open days at my Uni and I'll be paid £50 per day (for two days). I did one day last year and was taxed £10. Sorry if this is a stupid question, but is this is taxable income? I've found some info about P38 forms and student employment; if I gave one of those to the relevant department at my Uni, would I be exempt from tax or would I have to wait to get a PAYE code and claim it back? I know it isn't much, but if I don't need to pay it, I'd like to get it back
    Thanks.
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    (Original post by Philbert)
    Hi, I don't know whether this is really the right place to ask this as it isn't about general employment, but if anyone can help, I'd greatly appreciate it. I'm helping out at some open days at my Uni and I'll be paid £50 per day (for two days). I did one day last year and was taxed £10. Sorry if this is a stupid question, but is this is taxable income? I've found some info about P38 forms and student employment; if I gave one of those to the relevant department at my Uni, would I be exempt from tax or would I have to wait to get a PAYE code and claim it back? I know it isn't much, but if I don't need to pay it, I'd like to get it back
    Thanks.
    Yes, the income is taxable, but if you earn less than your 'personal allowance' (currently £7,475 for most people) during the tax year, you shouldn't have to pay any Income Tax on it. It doesn't sound like you completed any forms for your employer here, so they've taxed you using a tax code that allocates a personal allowance of zero against the income - resulting in a deduction of 20% income tax. The form P38(S) procedure only applies to working only during holiday periods while you're a student, so won't help you here, but what you should have done was to complete a form P46 (http://www.hmrc.gov.uk/forms/p46.pdf) and hand this to your employer before doing the work - this should allow the correct personal allowance to be treated as applying.

    To reclaim the tax if you expect your income to be below the £7,475 threshold, I'd suggest giving your tax office a call in the first instance. Assuming that you're no longer employed, they may advise you to complete a form P50 and send this to them along with evidence of your income and tax deductions.
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    (Original post by Illusionary)
    Well, if you're being taxed now based on incorrect personal allowances, you'd be better served by getting your tax code corrected so that any tax deductions are correctly calculated and you can avoid/minimise having to later make a claim for a refund. If you don't know why your tax code is what is is, ask for an explanation and get it corrected now.
    Thing is, I've tried getting it corrected before and they did change it, I just don't know what it all means. No one can seem to explain to me how it works either.

    Thing that gets me, is that I'm being taxed about £12 each month on the pension scheme I'm getting, but not really being taxed anything on the times I work for Propaganda. I would prefer to swap it around so that they tax my Propaganda job more when I do work, so that I can obtain the full amount (or near enough, as I suppose they'll have to tax some of it) to help me over the summer etc.
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    (Original post by staring.space)
    Thing is, I've tried getting it corrected before and they did change it, I just don't know what it all means. No one can seem to explain to me how it works either.

    Thing that gets me, is that I'm being taxed about £12 each month on the pension scheme I'm getting, but not really being taxed anything on the times I work for Propaganda. I would prefer to swap it around so that they tax my Propaganda job more when I do work, so that I can obtain the full amount (or near enough, as I suppose they'll have to tax some of it) to help me over the summer etc.
    Ah, so you have another source of income - that explains the non-standard tax code. Probably what's happened is that your personal allowance has been split between the two (or maybe more?) sources of income that you have, but importantly you need to make sure that you understand why you're being given the code(s) that you have. I'd strongly suggesting calling your tax office to ask if you don't - and make sure that you understand the explanation given (ask for further explanation until you do). At the same, time, you can ask them to change the allocation of your personal allowance between your sources of income in whatever proportions you prefer - this should be reasonably straightforward.
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    A bit of background. I'm 19, left sixth form last year and I've had a gap year. I want to join the RAF however the application process is taking the piss a bit. After failing a part of the process, I'm going to have to wait another 6 months to continue with my application. Right now I am in a full time temporary 2 month job (June to August) (actually there now, typing on my phone in the canteen during my break ). Anyway, I get taxed to high hell (about 33%) because I'm on £7.75/h working 12 hour shifts 5 days a week. After this, probably after being on job seekers for a while, I want to find a part time job until I can join the RAF.

    If I earn under £6000 (I think this is the figure) by the end of April 2012 (end of financial year), can I claim back the tax they took off me? And if so, how much can I claim back?

    Thanks
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    (Original post by TeenageDream)
    A bit of background. I'm 19, left sixth form last year and I've had a gap year. I want to join the RAF however the application process is taking the piss a bit. After failing a part of the process, I'm going to have to wait another 6 months to continue with my application. Right now I am in a full time temporary 2 month job (June to August) (actually there now, typing on my phone in the canteen during my break ). Anyway, I get taxed to high hell (about 33%) because I'm on £7.75/h working 12 hour shifts 5 days a week. After this, probably after being on job seekers for a while, I want to find a part time job until I can join the RAF.

    If I earn under £6000 (I think this is the figure) by the end of April 2012 (end of financial year), can I claim back the tax they took off me? And if so, how much can I claim back?

    Thanks
    About 33%... I'm guessing that's Income Tax and National Insurance Contributions (NICs) combined? Yes, if your total income for the year is less than your 'personal allowance' (currently £7,475 for most people) then I wouldn't expect you to have an Income Tax liability for the year so you should be able to claim a refund. To do so, use a form P50, sending this to your tax office along with parts 2 and 3 of your form P45.

    It's also worth checking your 'tax code', shown on your payslips, as you may not currently be treated as benefiting from your personal allowance - correcting an incorrect code could allow you to avoid having to pay any then later reclaim Income Tax. Is you tax code "BR" (or anything other than "747L")? If so, get in touch with your tax office and ask them to check/correct this as it may well be incorrect.

    However, you're unlikely to be able to similarly reclaim NICs, as these are calculated for each pay period rather than annually.
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    My friend resigned from his job today to take up another job in a different city (for personal reasons). When he joined his job he was given a golden hello of £3000 (which was taxed), he is leaving before the end of the period where he gets to keep his golden hello, but he has worked there for quite a while so he only has to pay back 75%.

    But, when he was paid the golden hello it was taxed, so in reality he probably only got around half of it. When he pays back the golden hello, the company will want the amount that it cost them, not the money that my friend actually received. What happens to the tax that he paid? Can he claim it back? Does anyone have any experience of this?
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    (Original post by Callipygian)
    My friend resigned from his job today to take up another job in a different city (for personal reasons). When he joined his job he was given a golden hello of £3000 (which was taxed), he is leaving before the end of the period where he gets to keep his golden hello, but he has worked there for quite a while so he only has to pay back 75%.

    But, when he was paid the golden hello it was taxed, so in reality he probably only got around half of it. When he pays back the golden hello, the company will want the amount that it cost them, not the money that my friend actually received. What happens to the tax that he paid? Can he claim it back? Does anyone have any experience of this?
    Not a question that I've come across here before... however, I think (though I'm not completely sure) that the position here is that no refund is possible. Not a good answer, I know - sorry!
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    I have a full time temporary 2 month job over the summer and I'm getting taxed about 33%. In April I'm going to claim my tax back because I will have made under £7k that year. Would I be able to claim my NI back too? If not, why not?

    Thanks
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    (Original post by TeenageDream)
    I have a full time temporary 2 month job over the summer and I'm getting taxed about 33%. In April I'm going to claim my tax back because I will have made under £7k that year. Would I be able to claim my NI back too? If not, why not?

    Thanks
    I'm afraid not. NICs for employees are calculated with reference to each pay period rather than annually.
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    (Original post by Illusionary)
    Not a question that I've come across here before... however, I think (though I'm not completely sure) that the position here is that no refund is possible. Not a good answer, I know - sorry!
    Perhaps they could take it as a deduction from the wage? Then HMRC would take that into account when calculating your income tax yes? They paid it through their payroll system so I can't see why they wouldn't reclaim it that way.
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    (Original post by alibee)
    Perhaps they could take it as a deduction from the wage? Then HMRC would take that into account when calculating your income tax yes? They paid it through their payroll system so I can't see why they wouldn't reclaim it that way.
    Hmm... that might be a possibility, though I'm guessing that the relative sizes of the lump sum and salary (and possibily company policy) may not allow it and I'm still not entirely sure that this would work. Best to speak to the employer I think - I'm sure they'll have come across the situation before.
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    (Original post by Illusionary)
    Most of this is pretty much correct, but it's worth pointing out that as it sounds like you're only just starting to work now it's not as straightforward as multiplying weekly pay by 52 weeks - the PAYE system used to collect income tax works on a cumulative basis so will take account of the fact that you've not been earning for the period between the start of the tax year (6 April) and when you started working.

    Without going into the detail of the calculations, I'd expect that (if you've had no other income to date since 6 April) you'd start to see Income Tax being deducted after roughly 14 weeks of work, then you'd have deductions of approximately £20 per week (per freeagent's post) following that. If your total income for the year doesn't exceed £7,475, you should be able to reclaim any Income Tax overpayment in due course (see my guide here for details: http://www.thestudentroom.co.uk/wiki...onal_Insurance)

    freeagent is correct that NICs are not reclaimable based on having a low annual income - they're calculated for each pay period, rather than for the year as a whole.
    Hello, thanks for this help, I read the guide however I'm not sure what to do (or whether I should do anythign) I got my first pay yesterday and I was charged £39.80 in PAYE tax, and then National insurance. With the PAYE tax, will I be able to claim this back? As I will earn less than the personal allowance?
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    (Original post by penguin-)
    Hello, thanks for this help, I read the guide however I'm not sure what to do (or whether I should do anythign) I got my first pay yesterday and I was charged £39.80 in PAYE tax, and then National insurance. With the PAYE tax, will I be able to claim this back? As I will earn less than the personal allowance?
    What's your tax code - which should be on your payslips? It's likely to be either "BR" or "747L". If it's "BR", this is likely to be incorrect as this doesn't give you the benefit of any 'personal allowance' (the £7,475 that I mentioned earlier) - speak to your employer if this is just a delay in them processing forms, and if not then you may need to speak to your tax office. If it's "747L", this is probably correct.

    In either case, if your income for the year doesn't exceed your personal allowance, yes, you should be able to reclaim any Income Tax that you've paid after you leave the job (using a form P50: http://www.hmrc.gov.uk/pdfs/p50.pdf), or after the end of the tax year at the latest (by writing to your tax office enclosing evidence of your income and tax deductions).
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    Hi all,

    As a part of my work contract I have medical cover included. I don't need to make any contribution to this cover, however I have been made aware that as a taxable benefit there is a tax cost to me. I have the option of not accepting this cover and therefore not having to pay the tax cost.

    I was wondering, does anyone know how to work out what the tax cost will be? I've not signed up yet so I obviously can't see how much I'll be taxed for it!

    Thanks,
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    (Original post by Delaney)
    Hi all,

    As a part of my work contract I have medical cover included. I don't need to make any contribution to this cover, however I have been made aware that as a taxable benefit there is a tax cost to me. I have the option of not accepting this cover and therefore not having to pay the tax cost.

    I was wondering, does anyone know how to work out what the tax cost will be? I've not signed up yet so I obviously can't see how much I'll be taxed for it!

    Thanks,
    The usual position is that you'd end up with an Income Tax liability, calculated based on your employer's cost of providing the benefit (which may well be less than you'd have to pay to take out an individual policy). If you're a basic rate (20%) taxpayer, just multiply this cost by 20% for the effective Income Tax 'cost' to you. Usually, you'd end up settling the additional liability via an adjustment to your tax code, spreading the cost over the tax year - there's an example on HMRC's website here.

    National Insurance Contributions (NICs) can also be due on some benefits, but in the case of employer-[rovided medical insurance (a non-cash benefit), I'd usually expect these to be Class 1A NICs, which are payable by the employer rather than by the employee.
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    (Original post by Illusionary)
    The usual position is that you'd end up with an Income Tax liability, calculated based on your employer's cost of providing the benefit (which may well be less than you'd have to pay to take out an individual policy). If you're a basic rate (20%) taxpayer, just multiply this cost by 20% for the effective Income Tax 'cost' to you. Usually, you'd end up settling the additional liability via an adjustment to your tax code, spreading the cost over the tax year - there's an example on HMRC's website here.

    National Insurance Contributions (NICs) can also be due on some benefits, but in the case of employer-[rovided medical insurance (a non-cash benefit), I'd usually expect these to be Class 1A NICs, which are payable by the employer rather than by the employee.
    Awesome, cheers mate. I'll rep you tomorrow.
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    (Original post by Delaney)
    Awesome, cheers mate. I'll rep you tomorrow.
    Always happy to help out
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    I could do with something being confirmed by a knowledgeable bod. I think I've got this right but can't be sure.

    Background:
    not a student at any point, but will be this Sept.
    currently unemployed, not claiming benefits, not expecting to be employed within 4 wks.

    Last tax year I worked at 2 different companies, earning a gross wage of approx £3.5k, paying £300ish in income tax. As far as I can tell, this is below the £7475 personal allowance and as such I am owed that money back. I have the P60 from company 2 but no P45 from company 1. This obviously only declares part of the tax I paid. I can't actually find any payslips from company 1 so can't be certain I paid income tax on it at all.

    So, I assume I just send off the P60 and a cover note advising I may be owed tax from the other job (which I can't prove but presumably they can work that out for themselves). Is this right?
    -
    My other Q is about tax owed from this year. I stopped working at company 2 two weeks ago, and as such have earnt about £6k this tax year and paid £800ish in income tax. As it is, I'm (theoretically) owed that money, but I believe I am right in saying I can't claim for a refund until the end of this tax year, when it is clear to HMRC that I haven't exceeded the £7475 personal allowance (assuming that is still the case come April 5th 2012 [likely]).

    Obviously I would like to have that money back sooner rather than later but I'd rather not send off a letter and the P45 if it's a futile exercise.


    Am I about right on these or way off?

    Any help appreciated, cheers.

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