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Reply 980
As freeagent said, you will pay tax as they will assume you will keep working, but if you don't earn over your personal tax allowance in this financial year you will be able to claim it back.
Original post by freeagent

Original post by penguin-
Hey, not sure if this is the right forum but...
I've looked at the HM revenue website but I still don't understand how much you have to earn to be taxed. :headfire: Anyway I'm working this summer until september, and as I've left school after alevels and haven't started uni yet, I filled out a p45 rather than a p38 as I'm not technically a student at the moment. I'm earning 7/hr which equates to about 245 a week as i'm working full time. So is this enough to be taxed, because I'm only on a temporary contract so I won't earn a full year's income.
What will I pay? I've only ever had a job whilst being at school so I don't really understand tax. Thanks to anyone who can explain this to me :smile:



Original post by freeagent
You will more thank likely be taxed on the assumption you are going to be working a full year i.e £245*52 = £12,740 assumed income. Your personal allowance covers you for £7475 therefore your assumed taxable income will be £5,265. Taxed at 20% gives you a charge of roughly £20 a week. A

Assuming you don't work further and your total income over the summer is under the personal allowance, this will be repaid after the end of the tax year (5th April 2012).

You may also have to pay national insurance (works out at circa £13 a week) which I do not believe is repayable to you as you earn over the weekly lower limit.

I hope this helps

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/Income_Tax_and_National_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.
Hi there,
I just started working at McDonalds for full time until mid September, then switching to part time while at University. My pay is £4.35 at the moment but will go up a bit at end of July once I turn 18.
On my first pay slip I was taxed 20% and this is probably just as it was an emergency tax code.
However I got letter from H&M Revenue and they are saying that I am tax code 23t, meaning that I can only earn £238 before tax! (Or £4 a week!)
This seems wayyyyy wrong!! This is my only income at the moment, except my student loan stuff in September, but I didn't think that that would affect it surely? Maybe it does, I don't really know! Just wanted to ask on here if anyone knows if this is right or not.
In this tax year I expect to earn about £5000 maximum from McD's and my student loans etc will give me about £8/9000 a year. (This may change as I have to update my application to include McD's though as have not got to it yet as only began working two weeks ago and only just got all my full emplyment details)
Reply 983
At the end of the tax year send your p60 off to your local HMRC office and tell them you think you are due a rebate, after a couple of weeks you will more than likely receive a nice cheque in the post from them and will have your tax code adjusted.
yeah, just keep all your pay slips, and get your rebate every now and again, i think it's quite a useful way to save
Original post by Stephhcharlene

Original post by Stephhcharlene
Hi there,
I just started working at McDonalds for full time until mid September, then switching to part time while at University. My pay is £4.35 at the moment but will go up a bit at end of July once I turn 18.
On my first pay slip I was taxed 20% and this is probably just as it was an emergency tax code.
However I got letter from H&M Revenue and they are saying that I am tax code 23t, meaning that I can only earn £238 before tax! (Or £4 a week!)
This seems wayyyyy wrong!! This is my only income at the moment, except my student loan stuff in September, but I didn't think that that would affect it surely? Maybe it does, I don't really know! Just wanted to ask on here if anyone knows if this is right or not.
In this tax year I expect to earn about £5000 maximum from McD's and my student loans etc will give me about £8/9000 a year. (This may change as I have to update my application to include McD's though as have not got to it yet as only began working two weeks ago and only just got all my full emplyment details)

Does the coding notice explain why you've got the "23T" tax code? Do you understand/agree with it? If not, get in touch with your tax office and ask them to explain and/or correct your code. The standard tax code for 2011/12 is "747L", reflecting a £7,475 personal allowance.

http://www.hmrc.gov.uk/incometax/code-wrong.htm
Original post by Illusionary
Does the coding notice explain why you've got the "23T" tax code? Do you understand/agree with it? If not, get in touch with your tax office and ask them to explain and/or correct your code. The standard tax code for 2011/12 is "747L", reflecting a £7,475 personal allowance.

http://www.hmrc.gov.uk/incometax/code-wrong.htm


It says on the letter that I have another job and or pension, which is wrong. The only other thing is the student loans that start in October. On my pay slip as well the tax code was OT so I know I'll get that back but this new tax code still seems to be wrong, so I will call them in a minute once I finish my lunch
Original post by Stephhcharlene

Original post by Stephhcharlene
It says on the letter that I have another job and or pension, which is wrong. The only other thing is the student loans that start in October. On my pay slip as well the tax code was OT so I know I'll get that back but this new tax code still seems to be wrong, so I will call them in a minute once I finish my lunch


Yep, that's the best thing to do. Once your tax code is corrected, you should receive a refund of any overpayment for the tax year to date through the payroll system the next time that you're paid - no need to wait until next April!
Original post by Illusionary
Yep, that's the best thing to do. Once your tax code is corrected, you should receive a refund of any overpayment for the tax year to date through the payroll system the next time that you're paid - no need to wait until next April!


Okay, thanks!!:smile:
Reply 989
And neither letter, nor another thing I got in another letter explain what I'm meant to do..?

One says I have a tax free amount of £702, the other a tax free amount of £6773 (having taken £702 off).

Technically I've had three jobs this year.

I signed up with an agency in May, then rang them a couple weeks later to say I wasn't going to work for them (filled in the forms a couple weeks ago with them).

Then I got a job somewhere else, did one shift and got offered another job. They've obviously sent off the stuff because it mentions them on the bottom of the form with an allowance of £702...When I filled in forms I ticked the box 'I have had another job since April 6th but this is my only job now'.

Now I've got another job which I've only just started on Sunday so I guess they will send stuff to HM Revenue and Customs too.

Problem is, what do I do with all these letters should I wait for the new place to send stuff to them, shall I ask them or should I just ring up HM Rev?

I'm confused as to why it says I have a tax free allowance varying so much. I've literally earnt £28 this year and that was after being taxed 20% anyway.

What do I do? :frown:
Original post by Tinsley

Original post by Tinsley
And neither letter, nor another thing I got in another letter explain what I'm meant to do..?

One says I have a tax free amount of £702, the other a tax free amount of £6773 (having taken £702 off).

Technically I've had three jobs this year.

I signed up with an agency in May, then rang them a couple weeks later to say I wasn't going to work for them (filled in the forms a couple weeks ago with them).

Then I got a job somewhere else, did one shift and got offered another job. They've obviously sent off the stuff because it mentions them on the bottom of the form with an allowance of £702...When I filled in forms I ticked the box 'I have had another job since April 6th but this is my only job now'.

Now I've got another job which I've only just started on Sunday so I guess they will send stuff to HM Revenue and Customs too.

Problem is, what do I do with all these letters should I wait for the new place to send stuff to them, shall I ask them or should I just ring up HM Rev?

I'm confused as to why it says I have a tax free allowance varying so much. I've literally earnt £28 this year and that was after being taxed 20% anyway.

What do I do? :frown:

Do the coding notices explain how the codes have been worked out?

What *should* be happening here is that when you leave each job, your employer should give you a form P45, which will state your tax code, cumulative income and cumulative tax deductions for the year to date. Rather than completing a form P46 when you start a new job, you should instead give your new employer parts 2 and 3 of your P45 - this will allow them to pick up the correct tax code and cumulative income/tax amounts and tax you correctly. The fact that you've completed the forms P46 instead could certainly be contributing to the problem.

The best thing to do would be to get in touch with your tax office and have to hand details of your income to date for the current tax year (starting on 6 April 2011), as well as any Income Tax that you've paid to date. Your form(s) P45 would be the best source of this information, but failing that try using your payslips.

For reference, the 'standard' personal allowance for 2011/12 is currently £7,475 - shown by a tax code of "747L".
Hey guys,

Basically, I received a tax code (21L) at the beginning of the tax year which allowed me to about £6500 (approximately) of personal allowance before I get taxed. I have a job at a nightclub where I work once a week and if I were earning maximum I'd earn about £1440 - but I don't even earn that, as I haven't been working due to exams over the past two months, and I'm not there in the summer so will not get money for that either. I also receive a pension of around £1500 annum due to my mum's death (a monthly payment to me).

So, naturally because in a tax year I wouldn't be earning any more than around £3000 according to my calculations (which at this point was £3000 lower than my personal allowance), I called up HMRC and got them to change my tax code. They have changed my tax code to 107L and upped my allowance about £1000 more (so it's now about £7500) but I'm STILL being taxed.

Has anyone else had a similar problem? I'm a bit annoyed I'm still losing money when I'm not even earning a third of my personal allowance as it is.

Anyone got any ideas what to do?
I'm not entirely sure where you got those figures from. I think a code 21L means you can earn up to £215 in a year before you get taxed, and 107L would be up to £1075 so as far as I know, yes, you should be paying tax.
Original post by staring.space

Original post by staring.space
Hey guys,

Basically, I received a tax code (21L) at the beginning of the tax year which allowed me to about £6500 (approximately) of personal allowance before I get taxed. I have a job at a nightclub where I work once a week and if I were earning maximum I'd earn about £1440 - but I don't even earn that, as I haven't been working due to exams over the past two months, and I'm not there in the summer so will not get money for that either. I also receive a pension of around £1500 annum due to my mum's death (a monthly payment to me).

So, naturally because in a tax year I wouldn't be earning any more than around £3000 according to my calculations (which at this point was £3000 lower than my personal allowance), I called up HMRC and got them to change my tax code. They have changed my tax code to 107L and upped my allowance about £1000 more (so it's now about £7500) but I'm STILL being taxed.

Has anyone else had a similar problem? I'm a bit annoyed I'm still losing money when I'm not even earning a third of my personal allowance as it is.

Anyone got any ideas what to do?


As 26daystoworkwith mentions, you seem to have the wrong understanding of your tax codes. To work out how much income a code is treating you as being entitled to receive froma given source without deduction of Income Tax, you essentially multiply the number in the code by 10. Do you understand why your code is what it is? If not, I suggest that you call your tax office and ask them to explain, and further correct your code if necessary

It's also worth pointing out that where Income Tax is deducted at source under the 'PAYE' system (as for employees), your 'personal allowance' is effectively spread across the year - as a result, it's not necessarily the case that you won't have any Income Tax deducted until you've received cumulative income in excess of your personal allowance. If ultimately your total income for the year doesn't exceed your personal allowance, you should be able to claim a refund of any overpayment from HMRC.
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
Reply 995
(edited 12 years ago)
Original post by Illusionary
If ultimately your total income for the year doesn't exceed your personal allowance, you should be able to claim a refund of any overpayment from HMRC.


Cheers, thankyou for this. I almost get where it's all coming from now, no thanks to the government (of whom I've rang up numerous times and they can't explain anything for ****)

So, you think that I should wait until this tax year has finished, calculate how much I have earned this year and then fill in a tax refund form? I know for a fact I will not earn even half my personal allowance, even if I work this summer at home!
Reply 997
Original post by Illusionary
Do the coding notices explain how the codes have been worked out?

What *should* be happening here is that when you leave each job, your employer should give you a form P45, which will state your tax code, cumulative income and cumulative tax deductions for the year to date. Rather than completing a form P46 when you start a new job, you should instead give your new employer parts 2 and 3 of your P45 - this will allow them to pick up the correct tax code and cumulative income/tax amounts and tax you correctly. The fact that you've completed the forms P46 instead could certainly be contributing to the problem.

The best thing to do would be to get in touch with your tax office and have to hand details of your income to date for the current tax year (starting on 6 April 2011), as well as any Income Tax that you've paid to date. Your form(s) P45 would be the best source of this information, but failing that try using your payslips.

For reference, the 'standard' personal allowance for 2011/12 is currently £7,475 - shown by a tax code of "747L".


I rang them up and they confused me a bit! :frown:

Basically it looks like they worked it out wrong, so fill in a P46 for my new job and when my old job give me a P46 send that on afterwards. And they should do it right but they don't know why they did it wrong before :s-smilie:

They think I've earnt over £1000 this year but I've only earnt £28 :redface:

Thanks :smile:
Original post by staring.space

Original post by staring.space
Cheers, thankyou for this. I almost get where it's all coming from now, no thanks to the government (of whom I've rang up numerous times and they can't explain anything for ****)

So, you think that I should wait until this tax year has finished, calculate how much I have earned this year and then fill in a tax refund form? I know for a fact I will not earn even half my personal allowance, even if I work this summer at home!

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.
Original post by Tinsley

Original post by Tinsley
I rang them up and they confused me a bit! :frown:

Basically it looks like they worked it out wrong, so fill in a P46 for my new job and when my old job give me a P46 send that on afterwards. And they should do it right but they don't know why they did it wrong before :s-smilie:

They think I've earnt over £1000 this year but I've only earnt £28 :redface:

Thanks :smile:

Glad that it sounds like you're getting this sorted! :smile: