tax help

Hi, I recently started working at Tesco. It’s my first job and I was under the impression I wouldn’t be taxed but I received my first payslip today and I’ve been taxed £106 of my monthly earnings with a tax code of OT. Can anyone help clarify what this means and how I can go about fixing this problem. I’ve spoken to HMRC but she was unhelpful and told me it’s because I don’t have a record of employment. Thanks.

The tax code 0T (that first character is a number zero, not a letter O) is an emergency tax code which is used when not enough information is available to work out what your tax rate should really be. Have you spoken to Tesco about this? It may be that they haven't provided all the necessary information to HMRC yet.

Most people will have a tax code of 1257L, which means that can earn up to £12,570 (for 2022/23) before they pay any tax. Those with a tax code of 0T pay tax (at the standard rate of 20%) from the very first pound they earn. So you need to get this sorted.

Thank you for clarifying! I’m going to speak to my manager tomorrow and see if I can get it sorted. Do you know if I will be able to claim the tax back once it’s sorted out or will this automatically be given back on my next pay slip?

The tax that you've overpaid would normally be returned via your salary (you shouldn't need to specifically claim it back).

Hopefully you'll get this sorted in time for your next pay slip.

This is only the case within the same tax year, as I understand it -- the tax on each pay packet is recalculated based on how much is due for the year so far minus the amount of tax paid up to the previous pay packet. So when the correct tax code is applied it looks like the tax has been overpaid and then gets refunded.

The problem is that OP probably won't get paid again before the end of this tax year (which is the 5th April).

I think in this case it will need to wait for HMRC to reconcile OP's tax records for the current year and conclude that tax has been paid when it shouldn't have been. I would imagine it'll get refunded as a cheque.

Hi, I recently started working at Tesco. It’s my first job and I was under the impression I wouldn’t be taxed but I received my first payslip today and I’ve been taxed £106 of my monthly earnings with a tax code of OT. Can anyone help clarify what this means and how I can go about fixing this problem. I’ve spoken to HMRC but she was unhelpful and told me it’s because I don’t have a record of employment. Thanks.