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Tax

amberglover

im not very good with stuff like this so can someone dumb down my situation for me lol?

iv just started a proper part time job, my annual wage is £3600 as im only contracted to 12 hours a week.
my first pay packet comes through on wednesday, will i get taxed, what for, and will i be able to claim it back straight away??

[url="http://www.listentotaxman.com/index.php?c=1&yr=2009&age=0&add=0&code=&pension=0&time=1&ingr=3600&vw[]=yr&vw[]=mth&vw[]=wk"]Clicky
If that's your only income, I wouldn't expect you to be paying any income tax or national insurance, as £3,600 is below the annual tax-free "personal allowance". I don't think it will alter the tax due in your case, but I assume that you're paid weekly? If so, I'd expect you to receive £69.23 per week (£3,600/52=£69.23) - post again if you don't receive this and I'll see if I can work out what's happening.

Also, your payslip should explicitly state your gross (before tax) pay, the amount of tax deducted (if any) and your net (after tax) pay, so take a look at these figures when you receive it.

Reply 121

kamc

15

Can someone help, I'm a bit confused :confused:

I started my job in August 2008, and the other day found my p45 which I hadn't realised I'd never handed in so I handed it in on Monday as I must have been on emergency tax. Will the extra tax I've paid be refunded to me in my next pay cheque (I read this on tsr somewhere I think) or do I have to apply for it myself? Can I get my August - April payments back or is it too late now? I started off as full time but then went down to part time, will that cause any problems if I have to apply for it myself?

Reply 122

Illusionary

19

First - I assume that you earned less than £6,035 from August 2008 to 5 April 2009? If so, then you shouldn't have paid income tax for the tax year ended 5 April 2009, and you can reclaim what you've paid for that period. As the tax year has ended, you'll need to write to your tax office to request a refund - read this for more info, under "How to reclaim PAYE overpayments - previous years".

For any income tax paid from 6 April 2009 onwards (i.e. the current tax year), any overpaid tax should be refunded through the Pay As You Earn (PAYE) system, so you should see it on your next pay cheque once you're on the correct tax code. Check your payslip to see your tax code - the standard code from 6 April 2009 will be 647L.

Part time vs full time work shouldn't have any effect on this.

Two other things to note:
- You can't generally reclaim any National Insurance Contributions (NICs) that you've paid
- Calculation of tax deductions from your pay works on the assumption that you'll be earning at the same rate over the course of the year, so if you're paid at a rate that means that you would earn over £6,475 (the new personal allowance for 2009/10) in the 2009/10 tax year, then you will see deductions of income tax even if you stop working before you've earned that much. In this case, you can then reclaim any excess tax paid at the end of the year, as above.

Hope that helps - post again if you need any more advice :smile:

Reply 123

username94219

20

GR29KHS

Claiming back tax at the end of a tax year

Sometime after the end of a tax year (5th April) you should recieve a P60 (see above) from your employer. This will show how much you've been paid and how much tax you've paid. It is a good idea to check this amount against your own calculations (see http://www.hmrc.gov.uk/rates/it.htm).

If you have over paid tax you will be entitled to a refund. There is a fantastic resource for calculating your liability on this website: http://listentotaxman.com/

Remember that most of your income will be liable to tax, this includes Tips and bonuses!.

Photocopy your P60 and then send the original with a covering letter to your tax office requesting a refund. It's also a good idea to ring your tax office first to check that they're happy for you to do this and that you're actually sending it to the right office.

Wondering if you can help me - I have just sent a letter off to claim my tax back, BUT I was abit of an idiot and missed off two parts of the address, ie:

Bristol & North Somerset area - service office

The address I sent my bits to was this:

HM Revenue & Customs
Ground Floor
Norfolk House
Temple Street
Bristol
BS1 6HS

Just wondering - although I missed some of the address off - will it matter? will it still get there or should I re-send another copy?

Reply 124

Illusionary

19

DancinBallerina

Wondering if you can help me - I have just sent a letter off to claim my tax back, BUT I was abit of an idiot and missed off two parts of the address, ie:

Bristol & North Somerset area - service office

The address I sent my bits to was this:

HM Revenue & Customs
Ground Floor
Norfolk House
Temple Street
Bristol
BS1 6HS

Just wondering - although I missed some of the address off - will it matter? will it still get there or should I re-send another copy?

I think you'll be fine. This is the entry for that office on HMRC's website. The part you missed off is just the name of the office and shouldn't affect Royal Mail's ability to deliver it to the right building (the postcode should do most of the work, anyway). Worst case is that you've missed an internal department name, and provided you've enclosed sufficient documents to explain your claim (which you'd have to anyway to reclaim tax) it should be clear where it should go to once the office has received it.

If you want to be completely sure, I'd suggest you give them a call in a week or so and ask about the claim - the number should be 0117 907 2300 .

Reply 125

username94219

20

Illusionary

I think you'll be fine. This is the entry for that office on HMRC's website. The part you missed off is just the name of the office and shouldn't affect Royal Mail's ability to deliver it to the right building (the postcode should do most of the work, anyway). Worst case is that you've missed an internal department name, and provided you've enclosed sufficient documents to explain your claim (which you'd have to anyway to reclaim tax) it should be clear where it should go to once the office has received it.

If you want to be completely sure, I'd suggest you give them a call in a week or so and ask about the claim - the number should be 0117 907 2300 .

Ahhh thanks - :smile:

Reply 126

Jim Key

Hi, i'm deffering a year from my course and living for a year to study kung fu and get a job, i really don't know if i'm technically a student as i'm on temporary withdrawl.
Does anyone know if i have to pay council tax for my year out or if im still considered a student?

Reply 127

Illusionary

19

Jim Key

Hi, i'm deffering a year from my course and living for a year to study kung fu and get a job, i really don't know if i'm technically a student as i'm on temporary withdrawl.
Does anyone know if i have to pay council tax for my year out or if im still considered a student?

From direct.gov.uk - a great resource for any queries like this:

Working out if you’re a full-time student for Council Tax purposes

You’ll usually be considered a full-time student for Council Tax purposes if:

* you attend a university or college course lasting for at least one academic year - as long as you attend for at least 24 weeks out of the year and study for at least 21 hours per week during term time, or
* you’re under 20 and your course leads to a qualification up to (but not above) A level standard or equivalent - as long as it lasts for more than three months and involves more than 12 hours of study per week

But not all courses count towards ‘full-time student’ status. For example, it doesn’t usually apply to distance learning or evening classes. Also, you won’t be considered a full-time student if you’re doing a course related to your job - such as day release.

You must also be studying at a ‘prescribed place of education’. This will include established universities and most colleges. Ultimately, though, it’s up to your local council to decide - if there’s any doubt, check with them.

So I'd say you probably will have to pay council tax, given the description you've given of your circumstances. As per the last sentence in the extract above though, check with your local council if you want to be sure.

Reply 128

sheldonite

2

Question:

I'm 17, full time education, part time job (Waitrose), 8.5hrs/week @£5.01

My tax code has been set at BR, charging me 20% tax.

Is this right?

HRMC says "
Is used when all your income is taxed at the basic rate - currently 20 per cent (most commonly used for a second job or pension)"

Reply 129

Illusionary

19

Stupiemountain

Question:

I'm 17, full time education, part time job (Waitrose), 8.5hrs/week @£5.01

My tax code has been set at BR, charging me 20% tax.

Is this right?

HRMC says "
Is used when all your income is taxed at the basic rate - currently 20 per cent (most commonly used for a second job or pension)"

Short answer - no.

First of all (pet hate here):
Being in full time education has no effect on whether you should be paying income tax

Now, the problem you have is that your tax code does not allow for the annual tax-free 'personal allowance' (currently £6,475 for the tax year ended 5 April 2010). Assuming you don't have any additional benefits affecting your code (it's very unlikely you would), the tax code to reflect this allowance is 647L, which is what you probably should be on.

8.5hrs/week @£5.01 = £42.59 per week, £2,214.42 per year

Your annual income at this rate is therefore within your 'personal allowance' and you shouldn't have to pay any income tax, assuming this is your only income. You also shouldn't have to pay any National Insurance Contributions, as your income is below the weekly threshold of £110.

I'd suggest you give your tax office a call (find it from your payslip, or here), and they should be able to get this amended for you. You should then receive repayment of any tax paid since 6 April 2009 through the payroll system.

As a side note, you also shouldn't have to pay any tax on interest earned in your bank account. If you haven't already done so, you can complete a form R85 to arrange for this.

Reply 130

sheldonite

2

Sorry I annoyed your pet hate - I thought you were exempt because you can't work the number of hours in a week or something :P.

Thanks for the advice though, I will check out my bank as well!

Reply 131

Illusionary

19

Stupiemountain

Sorry I annoyed your pet hate - I thought you were exempt because you can't work the number of hours in a week or something :P.

Thanks for the advice though, I will check out my bank as well!

Happy to help - and no need to apologise. You didn't actually ask whether student status mattered anyway; I was being pre-emptive, as you'd be amazed how often the question comes up!

Reply 132

deadwing

1

GR29KHS

Claiming back tax at the end of a tax year

Sometime after the end of a tax year (5th April) you should recieve a P60 (see above) from your employer. This will show how much you've been paid and how much tax you've paid. It is a good idea to check this amount against your own calculations (see http://www.hmrc.gov.uk/rates/it.htm).

If you have over paid tax you will be entitled to a refund. There is a fantastic resource for calculating your liability on this website: http://listentotaxman.com/

Remember that most of your income will be liable to tax, this includes Tips and bonuses!.

Photocopy your P60 and then send the original with a covering letter to your tax office requesting a refund. It's also a good idea to ring your tax office first to check that they're happy for you to do this and that you're actually sending it to the right office.

What if I don't have a P60? It was a temporary job and I left in Janaury... please help! I have P45s and pay slips, will they help? :s-smilie:

Reply 133

Illusionary

19

deadwing

What if I don't have a P60? It was a temporary job and I left in Janaury... please help! I have P45s and pay slips, will they help? :s-smilie:

This, from HMRC, sums it up pretty well:

Your P60 is the summary of your pay and the tax that's been deducted from it in the tax year.

You'll get one if you're still with your employer at the end of the tax year (5 April). As you left in January, you won't have received one. However, the P45 should have all the details that HMRC will need in order to arrange for a refund of income tax (but not any National Insurance contributions you've paid) if you earned less than £6,035 during the year.

I'd suggest that you give your tax office a call and ask them exactly what documents they need from you (they may already have everything they need, so it's woth checking this). You can find details of the relevant office from here.

Reply 134

deadwing

1

Illusionary

This, from HMRC, sums it up pretty well:

You'll get one if you're still with your employer at the end of the tax year (5 April). As you left in January, you won't have received one. However, the P45 should have all the details that HMRC will need in order to arrange for a refund of income tax (but not any National Insurance contributions you've paid) if you earned less than £6,035 during the year.

I'd suggest that you give your tax office a call and ask them exactly what documents they need from you (they may already have everything they need, so it's woth checking this). You can find details of the relevant office from here.

Thanks so much, rang them up today and there were no problems. :biggrin:

Reply 135

Illusionary

19

deadwing

Thanks so much, rang them up today and there were no problems. :biggrin:

Glad you got it all sorted :smile:

Reply 136

Chrisateen

14

Illusionary

Glad you got it all sorted :smile:

Hi

Since you are giving advice to everyone I hope you could help me.

I work for the royal mail which was arranged and would be paid by my agency. I started last week and the wage is 6.60hr and I am working full time. When I filled in my time sheet last week I filled in a p46 as I have no P45. Do you have an idea what sort of taxes they will deduct from my wages.

Secondly I filled in a P38 and sent it to my agency and should have it by now. How long does it take to process it and would it be on time for Friday when I get my first pay.

Plus I filled in a p38 for other agencies i signed up to in the summer and a tutoring job I did a few months back would the tax office know about this and automatically not tax me?

Thanks for your help

Reply 137

Illusionary

19

Chrisateen

Hi

Since you are giving advice to everyone I hope you could help me.

I work for the royal mail which was arranged and would be paid by my agency. I started last week and the wage is 6.60hr and I am working full time. When I filled in my time sheet last week I filled in a p46 as I have no P45. Do you have an idea what sort of taxes they will deduct from my wages.

I can't you any exact numbers without more specific detail, as the amount of Income Tax that you have to pay is based on your total earnings in the tax year to date a 'tax year runs from 6 April to 5 April). You get an annual tax-free 'personal allowance' (currently at £6,475), so that you shouldn't have to pay any Income Tax if your annual income doesn't exceed this.

Tax will be deducted under a system called 'Pay As You Earn' (PAYE), which grants you your personal allowance on a cumulative basis. This isn't particularly easy to explain, but for example, after 5 months have passed, you shouldn't have paid any Income Tax if your earnings to date are below (5/12)*£6,475=£2,698. I've given a more full example in this earlier post.

You may also have National Insurance Contributions (NICs) deducted from your pay. Unless Income Tax, deduction of NICs is calculated per pay period (usually weekly or monthly - however often you get your payslip). You'll have NICs deducted at a rate of 11% on the excess over £110 per week.

If you want to be fairly sure that your deductions are being correctly calculated, check your tax code, which will be on your payslip. If it's "647L" then you've been allocated the standard personal allowance of £6,475; if it's "BR" then you're being treated as having no personal allowance and should try to get this corrected (see my post linked above). Given that you've completed and returned a P46, you should be okay on this.

You may find www.listentotaxman.com to be useful to calculate the tax you should expect to pay for a given level of annual earnings.

Secondly I filled in a P38 and sent it to my agency and should have it by now. How long does it take to process it and would it be on time for Friday when I get my first pay.

Plus I filled in a p38 for other agencies i signed up to in the summer and a tutoring job I did a few months back would the tax office know about this and automatically not tax me?

Thanks for your help

I'll have to admit that I'm not very familiar with the administration side of the P38(S) form, but I think that it's very much dependent on your employer's policy. I don't think that a P38(S) that you've given to a previous employer would be relevant.

It's worth noting that the P38(S) won't stop deduction of NICS - as above, these are calculated per pay period, so the form won't be relevant for them.

Reply 138

Chrisateen

14

Illusionary

If you want to be fairly sure that your deductions are being correctly calculated, check your tax code, which will be on your payslip. If it's "647L" then you've been allocated the standard personal allowance of £6,475; if it's "BR" then you're being treated as having no personal allowance and should try to get this corrected (see my post linked above). Given that you've completed and returned a P46, you should be okay on this.

So if I was given the 647L tax code will I be taxed at all??? Plus what is usually the tax code for students who are exempt from tax and is the BR tax code calculated the same way as the website link you gave me?

Reply 139

Illusionary

19

Chrisateen

So if I was given the 647L tax code will I be taxed at all??? Plus what is usually the tax code for students who are exempt from tax and is the BR tax code calculated the same way as the website link you gave me?

I can't say for certain without full details of your income. However, assuming "full time" means 37.5 hours per week, that works out at £247.50 per week. NICs are the easy one - these will be deducted, at 11%*(247.50-110)=£15 per week.

For Income Tax (IT), if your total earnings since 6 April 2009 are below about (4/12)*£6,475=£2,158 then you shouldn't have any IT deduction, at least initially (I use 4/12 since we're about 4 months into the tax year), assuming you're on a "647L" code. If you stay with Royal Mail for long enough, then your total earnings in the tax year could eventually exceed the proportion of the personal allowance applicable to the portion of the tax year that's elapsed, as £247.50 per week would exceed £6,475 if it continued for an entire year. However, once the P38(S) has been processed this shouldn't be an issue any longer.

As a matter of terminology, students won't be 'exempt' from Income Tax even with the P38(S) in place, as it's an administrative concession from HMRC where there would be no ultimate tax liability anyway because total annual earnings are be below the personal allowance. I've not personally seen a payslip with a P38(S) in place, but I think the tax code would then be "NT" (no tax). As for getting that site to work for a "BR" code, it won't recognise that codde itself, but you'll get the correct result if you enter "-6475" into the "Other allowances / deductions" field.

Hopefully that's reasonably clear - post again if you'd like any further clarification. :smile:

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