I think i've been over taxed this month by thousands of pounds

I was under the assumption that the first 12.5k you pay nothing. Up to 50k it's 20% over that is 40%

I made £7400 in total money due to high locum rates/Covid/Pay for days off in Lieu and bunching up Locums i had done over the last two months.

But they've basically taxed me at all of these rates. I paid over £2000 in taxes alone, before student loan, NI, Pensions, and at the end my take home was £4400.

This really makes no sense at all to me

Reply 1

CatInTheCorner

Original post by Anonymous

I have no clue about tax, but I would contact the employer and ask if this is normal, and if not, ask who you can contact

Reply 2

Zarek

You are being taxed on assumptions made about your projected annual income. If you are over taxed you can claim a rebate at the end of the tax year. Alternatively call HMRC, explain the situation and they might be able to adjust your tax code in a way that helps

Reply 3

Anonymous #2

Original post by Anonymous

Hi,

When did you make this money, over what period of time?

Reply 4

username3901812

As Zarek wrote above, the tax authorities assume that you are going to earn this much every month until the end of the financial year and tax you accordingly. Since it's the first month of the financial year now, that's a very high assumed income and hence high tax rate.

Reply 5

Angiogram1

Original post by Anonymous

Your nil rate band of £12k is spread evenly over (normally) a 12 month period. So if they have taxed you at all those rates that sounds correct.
You may have been given a basic rate code (often happens if it’s your first employment) as your employer doesn’t have any payroll history for you. As above say it will be sorted by end of tax period.

Reply 6

_Rusty_

Volunteer Team

Original post by Anonymous

From what I understand ypu have earned 7400 in 2 months. They project that (multiply by 6) tp work out your income for the year. They then use that to calculate your tax bracket accordingly. If you dont achieve that tax bracket ie. You earn less than expected from the projections you can ask for a rebate at the end of the tax year.

I think i have that all correct :lol:

Reply 7

pipsteruk

Original post by Anonymous

Others have correctly explained that the tax free allowance is spread over the full year, so divide the 12570 (assuming your on a 1257l tax code) by your payment frequency to get the tax free amount for the period you were paid in.

Therefore your already going to be paying more tax if you get paid (lets assume months) 2 months wages in one tax month as you will only get that ONE tax free allowance rather than two (one for each month you earned).

Secondly, as others pointed out, your higher wage that period is used to calculate an estimate of earnings for the rest of the tax year to see if you need to pay tax a higher rate.

It depends what tax code you are on though as to what happens next,(assuming your talking about the payment occuring this tax year) - if you are on a cumulative code (ie 1257L NOT WEEK ONE MONTH ONE) then if your pay goes back to normal next pay period then you should get the overpayment of tax straight back into your payslip automatically.

If your on a week one month one code, ring up hmrc and find out why (as its unusual for someone to be on a w1m1 this close to the start of the tax year) and see if you can get put onto a cumulative code.