How does tax work?

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Anonymous #1
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You're allowed £12500 personal income without paying tax but if I work for 3 months at 2k with overtime would I pay tax as its only 6k or would they do it as I would expect to make 24k?
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ReadingMum
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You would pay tax at the time but can claim it back HMRC either at the end of the employment or the end of the tax year (whichever is first)
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Emma:-)
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(Original post by ReadingMum)
You would pay tax at the time but can claim it back HMRC either at the end of the employment or the end of the tax year (whichever is first)
You can phone them up after your first pay day and get them to sort it. You usually get the money back next pay day. That way you get it back quicker.
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sabana
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You will pay tax at the normal rate assuming you are working for the whole yr. However at the end of the tax yr Hmrc assess if u have paid the correct amount of tax after taking into account all of your income for the tax yr. If that was your only employment in the yr it means you will have overpaid so you would get a refund of all of the tax you've paid. HMRC will send you a letter automatically to claim your refund at the end of the tax yr so u don't need to do anything.
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Emma:-)
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(Original post by sabana)
You will pay tax at the normal rate assuming you are working for the whole yr. However at the end of the tax yr Hmrc assess if u have paid the correct amount of tax after taking into account all of your income for the tax yr. If that was your only employment in the yr it means you will have overpaid so you would get a refund of all of the tax you've paid. HMRC will send you a letter automatically to claim your refund at the end of the tax yr so u don't need to do anything.
Why would you wait that long?
If you get taxed on your first pay, you phone HMRC up, they sort it. You don't pay tax from then on of you shouldn't be. And you get any overpaid tax back the following payday.
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Quady
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(Original post by Emma:-))
Why would you wait that long?
If you get taxed on your first pay, you phone HMRC up, they sort it. You don't pay tax from then on of you shouldn't be. And you get any overpaid tax back the following payday.
?

How are HMRC going to confirm you're being paid £2k a month for three but it will then certainly drop to zero?

Not even sure how they'd sort it, not like they control payroll departments, they just inform them of someone tax code - which wouldn't change in this scenario.
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ReadingMum
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They would have to take it on trust which is why I suggested waiting till the end of the employment if it really is that short term
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Emma:-)
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(Original post by Quady)
?

How are HMRC going to confirm you're being paid £2k a month for three but it will then certainly drop to zero?

Not even sure how they'd sort it, not like they control payroll departments, they just inform them of someone tax code - which wouldn't change in this scenario.
Trust me, ive done it myself when I've been taxed and I shouldn't have.
If it's a temporary/part time job or you know you won't earn over the threshold for paying tax then you phone them. They can then adjust your tax code so you are on the right tax code and you will get taxed/not taxed accordingly.
I've also been in a similar situation before with having multiple jobs and have had to phone them to get my tax codes and tax refunds sorted.
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the bear
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(Original post by Emma:-))
Trust me, ive done it myself when I've been taxed and I shouldn't have.
If it's a temporary/part time job or you know you won't earn over the threshold for paying tax then you phone them. They can then adjust your tax code so you are on the right tax code and you will get taxed/not taxed accordingly.
I've also been in a similar situation before with having multiple jobs and have had to phone them to get my tax codes and tax refunds sorted.
great advice Emma

it can be a long call waiting in a queue.
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Emma:-)
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(Original post by the bear)
great advice Emma

it can be a long call waiting in a queue.
I'd rather wait in a queue and get it sorted that day (with my.overpaid tax back the next payday) than wait several months to get it back.
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IWMTom
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(Original post by the bear)
great advice Emma

it can be a long call waiting in a queue.
Or alternatively use the live chat on the GOV.UK website.

I got in touch with HMRC a few weeks ago to sort a tax code, I was through to an agent in under 5 minutes and my tax code was updated on the system within another 5 minutes.
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Emma:-)
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(Original post by IWMTom)
Or alternatively use the live chat on the GOV.UK website.

I got in touch with HMRC a few weeks ago to sort a tax code, I was through to an agent in under 5 minutes and my tax code was updated on the system within another 5 minutes.
Id forgot about the live chat.
Thanks for backing me up.
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IWMTom
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(Original post by Emma:-))
Id forgot about the live chat.
Thanks for backing me up.
No worries!
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tashkent46
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Emma is correct. HMRC will tax your income according to a set 'tax code'. Sometimes this code can be wrong (common when switching jobs you may be assigned a temporary code) and result in you paying more tax. Call them and they will advise you on the correct code your employer should be telling them.
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Quady
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(Original post by Emma:-))
Trust me, ive done it myself when I've been taxed and I shouldn't have.
If it's a temporary/part time job or you know you won't earn over the threshold for paying tax then you phone them. They can then adjust your tax code so you are on the right tax code and you will get taxed/not taxed accordingly.
I've also been in a similar situation before with having multiple jobs and have had to phone them to get my tax codes and tax refunds sorted.
As I said in the post you were replying to, they can change your tax code. But what odds does that make if your tax code is correct?

ie 1250L (S1250L if like me you're in ) and you're earning £2k a month for three months so you're getting charged tax in those months then what tax code change can be made that would mean you don't pay tax in the subsequent two months?
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Quady
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(Original post by IWMTom)
Or alternatively use the live chat on the GOV.UK website.

I got in touch with HMRC a few weeks ago to sort a tax code, I was through to an agent in under 5 minutes and my tax code was updated on the system within another 5 minutes.
Same question

There is no suggestion the tax code is wrong. So why would HMRC do anything....?
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Quady
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(Original post by tashkent46)
Emma is correct. HMRC will tax your income according to a set 'tax code'. Sometimes this code can be wrong (common when switching jobs you may be assigned a temporary code) and result in you paying more tax. Call them and they will advise you on the correct code your employer should be telling them.
What if you're on the right tax code but earning £2k a month for three months?
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Emma:-)
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(Original post by Quady)
As I said in the post you were replying to, they can change your tax code. But what odds does that make if your tax code is correct?

ie 1250L (S1250L if like me you're in ) and you're earning £2k a month for three months so you're getting charged tax in those months then what tax code change can be made that would mean you don't pay tax in the subsequent two months?
Speak to HMRC.
They are the experts on income/tax codes etc and can advise.
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IWMTom
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(Original post by Quady)
Same question

There is no suggestion the tax code is wrong. So why would HMRC do anything....?
Not sure why you're asking me?
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Quady
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(Original post by Emma:-))
Speak to HMRC.
They are the experts on income/tax codes etc and can advise.
OK, but just to check.

Your issue was you weren't on the right tax code?

Which isn't a problem mentioned in this scenario.
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