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What's the deal with TAX?

Hi I work a zero-hours contract, mainly weekends but this week I'm working a full 8days straight. So it varies how much I work.

When I get paid, I notice tax gets taken off. How much tax am I paying? Why am I paying it? Isn't there a threshold?
Also for my last job, I got a refund for the tax I paid after I left, why is that? Will I get refunded again?
Original post by stemmery
Hi I work a zero-hours contract, mainly weekends but this week I'm working a full 8days straight. So it varies how much I work.

When I get paid, I notice tax gets taken off. How much tax am I paying? Why am I paying it? Isn't there a threshold?
Also for my last job, I got a refund for the tax I paid after I left, why is that? Will I get refunded again?


These are questions you should be asking your employer/manager

If you do not trust them you can always do a self assessment for free https://www.gov.uk/personal-tax/self-assessment
Reply 2
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stemmery
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Original post by TaxAspirational
These are questions you should be asking your employer/manager

If you do not trust them you can always do a self assessment for free https://www.gov.uk/personal-tax/self-assessment


Is it not common knowledge with how/when tax gets paid? And how much etc?
Original post by stemmery
Is it not common knowledge with how/when tax gets paid? And how much etc?


It's not as common as you may think, many people just leave it to their employers and trust them to pay it correctly. If they don't and according to certain circumstances, HMRC will calculate everything correctly and pay you back your due.

I know it is unpopular to say but the system works mate
Reply 4
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stemmery
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Original post by TaxAspirational
It's not as common as you may think, many people just leave it to their employers and trust them to pay it correctly. If they don't and according to certain circumstances, HMRC will calculate everything correctly and pay you back your due.

I know it is unpopular to say but the system works mate


Okay. I don't have an issue with the system, I just wanted to know how it works.
Original post by stemmery
When I get paid, I notice tax gets taken off. How much tax am I paying? Why am I paying it? Isn't there a threshold?
Also for my last job, I got a refund for the tax I paid after I left, why is that? Will I get refunded again?


Your payslip should tell you exactly how much tax you've paid. There is a threshold of £10,600 since 6th April 2015 but it's worked out every time you get paid (ie monthly or weekly). If you're paid monthly, you will pay tax every time you earn over £883.33. If you earn over that one month, and under the next, you should automatically be refunded but you will be able to claim it back at the end of the tax year if you're still under the threshold and don't get refunded automatically.

Double check your tax code though, it should be 1060L so you may need to speak to HMRC if it's something else.



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Reply 6
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stemmery
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Original post by DarkMagic
Your payslip should tell you exactly how much tax you've paid. There is a threshold of £10,600 since 6th April 2015 but it's worked out every time you get paid (ie monthly or weekly). If you're paid monthly, you will pay tax every time you earn over £883.33. If you earn over that one month, and under the next, you should automatically be refunded but you will be able to claim it back at the end of the tax year if you're still under the threshold and don't get refunded automatically.

Double check your tax code though, it should be 1060L so you may need to speak to HMRC if it's something else.

Posted from TSR Mobile


Okay thanks. This makes more sense.
as for post 6 except that if you are sure you will be under the threshold you can submit a claim for a refund before the end of the year. https://www.gov.uk/claim-tax-refund/overview Not many people bother but you can do it.

You still have to pay national insurance so you will still have money taken off.
Reply 8
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stemmery
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Original post by parentlurker
as for post 6 except that if you are sure you will be under the threshold you can submit a claim for a refund before the end of the year. https://www.gov.uk/claim-tax-refund/overview Not many people bother but you can do it.

You still have to pay national insurance so you will still have money taken off.


I wasn't going to submit a claim, because usually I get a cheque of reimbursements, which always come as a lovely surprise.
Original post by stemmery
I wasn't going to submit a claim, because usually I get a cheque of reimbursements, which always come as a lovely surprise.


Yep - as you've found, generally HMRC's year-end reconciliation process will identify most of the straightforward PAYE income tax refunds without the taxpayer needing to take any action.
Reply 10
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stemmery
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Original post by Illusionary
Yep - as you've found, generally HMRC's year-end reconciliation process will identify most of the straightforward PAYE income tax refunds without the taxpayer needing to take any action.


Well this whole thread is pointless as I've just found out no tax is paid anyway haha! Woops.

Nevermind, tax is paid :/
(edited 8 years ago)
You're paying PAYE i assume? Go find out what tax band you're under im also going to assume you're not just working as a waiter or the like otherwise getting taxed like that is odd but if you fall outside the taxable income you can easily claim it back
Reply 12
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Original post by Soldieroffortune
You're paying PAYE i assume? Go find out what tax band you're under im also going to assume you're not just working as a waiter or the like otherwise getting taxed like that is odd but if you fall outside the taxable income you can easily claim it back


Yes, PAYE! I just got my payslip, any way I can stop that from happening so I don't have to claim it back or? I'm events staff, zero-hours contract. Usually waitress/bar staff etc at events and the like
Original post by stemmery
Yes, PAYE! I just got my payslip, any way I can stop that from happening so I don't have to claim it back or? I'm events staff, zero-hours contract. Usually waitress/bar staff etc at events and the like


Ummm not entirely sure, if i remember rightly its estimated what your pay for the year will be and then decided whether youll be taxed or not in which case you may have to claim it back but its been a long time since i've had to deal with tax returns so im not entirely sure im afraid. Speak to your employer as its doubtful you should be being taxed and they're just being pedantic about it.
Original post by Soldieroffortune
You're paying PAYE i assume? Go find out what tax band you're under im also going to assume you're not just working as a waiter or the like otherwise getting taxed like that is odd but if you fall outside the taxable income you can easily claim it back

Do you mean to refer here to a tax code rather than a tax band? A tax code is what an employer uses to base the calculation of any tax deductions on; a tax band is the range of incomes to which a given marginal tax rate applies.

You're correct though that the reclaim process is generally straightforward.


Original post by stemmery
Yes, PAYE! I just got my payslip, any way I can stop that from happening so I don't have to claim it back or? I'm events staff, zero-hours contract. Usually waitress/bar staff etc at events and the like

What 'tax code' is shown on your payslip? If it's '0T' or 'BR' and this is your only job, the code is likely to be incorrect and will be there source of your problems. Those tax codes assume that you have no 'personal allowance' (i.e., a band of income that you can receive each year without deduction of any income tax). Also, is it definitely Income Tax that's being deducted and not National Insurance Contributions (the two amounts would be shown separately on your payslips).

Get back to me with answers to those two questions and I can advise further. :smile:

Original post by Soldieroffortune
Ummm not entirely sure, if i remember rightly its estimated what your pay for the year will be and then decided whether youll be taxed or not in which case you may have to claim it back but its been a long time since i've had to deal with tax returns so im not entirely sure im afraid. Speak to your employer as its doubtful you should be being taxed and they're just being pedantic about it.

Not quite, but you're close and the net effect is similar. What happens is that under PAYE, a person's cumulative income for the tax year to date (i.e., since 6 April) is compared to the proportion of their personal allowance that applies for the period of the year that's elapsed so far (e.g., three months in to the year, cumulative income is compared to 3/12 of the person's personal allowance). Then, if there's any excess, the cumulative Income Tax liability based on that excess is determined and compared with the amount deducted to date - the current period deduction is the amount needed to 'top up' the total deductions to that cumulative amount due.

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