QUERY: beginner to PAYE tax & NI (part deux)

Quote from Ronald Raygun:
"But if your annual income is less than about =A35000, your tax rate is
zero. If it's less than about =A37000 it (i.e. the marginal rate) is 10%
(i.e. if you earn =A37k, you pay 10% of =A32k). Above =A37k, it's 22% (so
if you earn =A310k you pay 10% of =A32k plus 22% of =A33k)."

I just got my P60 and my Pay is 8136.36 and Tax deducted is 1789.92
(for total year). Following your calculation, 10% of =A32k is =A3200, 22%
of =A31136.36 is =A3250, so my total tax should be =A3500. Right?

Re: QUERY: beginner to PAYE tax & NI (part deux)

<> wrote in message
news:
Quote from Ronald Raygun:
"But if your annual income is less than about £5000, your tax rate is
zero. If it's less than about £7000 it (i.e. the marginal rate) is 10%
(i.e. if you earn £7k, you pay 10% of £2k). Above £7k, it's 22% (so
if you earn £10k you pay 10% of £2k plus 22% of £3k)."

I just got my P60 and my Pay is 8136.36 and Tax deducted is 1789.92
(for total year). Following your calculation, 10% of £2k is £200, 22%
of £1136.36 is £250, so my total tax should be £500. Right?


What is the Tax Code that is shown on the P60 ?

Re: QUERY: beginner to PAYE tax & NI (part deux)

wrote:

> Quote from Ronald Raygun:
> "But if your annual income is less than about £5000, your tax rate is
> zero. If it's less than about £7000 it (i.e. the marginal rate) is 10%
> (i.e. if you earn £7k, you pay 10% of £2k). Above £7k, it's 22% (so
> if you earn £10k you pay 10% of £2k plus 22% of £3k)."
>
> I just got my P60 and my Pay is 8136.36 and Tax deducted is 1789.92
> (for total year). Following your calculation, 10% of £2k is £200, 22%
> of £1136.36 is £250, so my total tax should be £500. Right?

Right. More precisely, your personal allowance is £4895 and the 10%
band is £2090, so you should have paid £209 for the first £6985 and
then 22% of the remaining £1151, so your tax bill should be £462.22,
and you should be due a refund of about £1328 when you complete your
tax return.

By the way, I notice that £1789.92 just happens to be exactly 22% of
£8136 (pence are ignored for tax calculations). So it looks as though
you were on a BR tax code as a result of your employer not having been
given a more correct tax code. Had you not supplied a P45?

Re: QUERY: beginner to PAYE tax & NI (part deux)

"Ronald Raygun" <> wrote in message
news:UdAfg.79253$
> wrote:
>

>
> By the way, I notice that £1789.92 just happens to be exactly 22% of
> £8136 (pence are ignored for tax calculations). So it looks as though
> you were on a BR tax code as a result of your employer not having been
> given a more correct tax code. Had you not supplied a P45?
>
or (more likely) is it your "second income" ?

Re: QUERY: beginner to PAYE tax & NI (part deux)

Ronald Raygun wrote:
> wrote:
>
> > Quote from Ronald Raygun:
> > "But if your annual income is less than about =A35000, your tax rate is
> > zero. If it's less than about =A37000 it (i.e. the marginal rate) is 10%
> > (i.e. if you earn =A37k, you pay 10% of =A32k). Above =A37k, it's 22% (=
so
> > if you earn =A310k you pay 10% of =A32k plus 22% of =A33k)."
> >
> > I just got my P60 and my Pay is 8136.36 and Tax deducted is 1789.92
> > (for total year). Following your calculation, 10% of =A32k is =A3200, 2=
2%
> > of =A31136.36 is =A3250, so my total tax should be =A3500. Right?
>
> Right. More precisely, your personal allowance is =A34895 and the 10%
> band is =A32090, so you should have paid =A3209 for the first =A36985 and
> then 22% of the remaining =A31151, so your tax bill should be =A3462.22,
> and you should be due a refund of about =A31328 when you complete your
> tax return.
>
> By the way, I notice that =A31789.92 just happens to be exactly 22% of
> =A38136 (pence are ignored for tax calculations). So it looks as though
> you were on a BR tax code as a result of your employer not having been
> given a more correct tax code. Had you not supplied a P45?

My tax code is indeed BR. My last employment ended in 2004 Sept and I
started a new job in 2006 Nov. I can't remember where my P45 is (or
whether I was given one) but I assumed that the P45 is useless after
over a year of unemployment.

Where can I go to claim my 1328 pounds back?

Re: QUERY: beginner to PAYE tax & NI (part deux)

wrote:
> Ronald Raygun wrote:
> > wrote:
> >
> > > Quote from Ronald Raygun:
> > > "But if your annual income is less than about =A35000, your tax rate =
is
> > > zero. If it's less than about =A37000 it (i.e. the marginal rate) is =
10%
> > > (i.e. if you earn =A37k, you pay 10% of =A32k). Above =A37k, it's 22%=
(so
> > > if you earn =A310k you pay 10% of =A32k plus 22% of =A33k)."
> > >
> > > I just got my P60 and my Pay is 8136.36 and Tax deducted is 1789.92
> > > (for total year). Following your calculation, 10% of =A32k is =A3200,=
22%
> > > of =A31136.36 is =A3250, so my total tax should be =A3500. Right?
> >
> > Right. More precisely, your personal allowance is =A34895 and the 10%
> > band is =A32090, so you should have paid =A3209 for the first =A36985 a=
nd
> > then 22% of the remaining =A31151, so your tax bill should be =A3462.22,
> > and you should be due a refund of about =A31328 when you complete your
> > tax return.
> >
> > By the way, I notice that =A31789.92 just happens to be exactly 22% of
> > =A38136 (pence are ignored for tax calculations). So it looks as though
> > you were on a BR tax code as a result of your employer not having been
> > given a more correct tax code. Had you not supplied a P45?
>
> My tax code is indeed BR. My last employment ended in 2004 Sept and I
> started a new job in 2006 Nov. I can't remember where my P45 is (or
> whether I was given one) but I assumed that the P45 is useless after
> over a year of unemployment.
>
> Where can I go to claim my 1328 pounds back?

I was just using those calculators and it tells me how much NI I should
have paid (around 500, but I paid 1451.34). Can NI be claimed back?

Re: QUERY: beginner to PAYE tax & NI (part deux)

<> wrote in message
news:

Ronald Raygun wrote:
> wrote:
>
> > Quote from Ronald Raygun:
> > "But if your annual income is less than about £5000, your tax rate is
> > zero. If it's less than about £7000 it (i.e. the marginal rate) is 10%
> > (i.e. if you earn £7k, you pay 10% of £2k). Above £7k, it's 22% (so
> > if you earn £10k you pay 10% of £2k plus 22% of £3k)."
> >
> > I just got my P60 and my Pay is 8136.36 and Tax deducted is 1789.92
> > (for total year). Following your calculation, 10% of £2k is £200, 22%
> > of £1136.36 is £250, so my total tax should be £500. Right?
>
> Right. More precisely, your personal allowance is £4895 and the 10%
> band is £2090, so you should have paid £209 for the first £6985 and
> then 22% of the remaining £1151, so your tax bill should be £462.22,
> and you should be due a refund of about £1328 when you complete your
> tax return.
>
> By the way, I notice that £1789.92 just happens to be exactly 22% of
> £8136 (pence are ignored for tax calculations). So it looks as though
> you were on a BR tax code as a result of your employer not having been
> given a more correct tax code. Had you not supplied a P45?

My tax code is indeed BR. My last employment ended in 2004 Sept and I
started a new job in 2006 Nov. I can't remember where my P45 is (or
whether I was given one) but I assumed that the P45 is useless after
over a year of unemployment.

Where can I go to claim my 1328 pounds back?

your local tax office will do it for free or you could pay an accountant.
take all your paperwork with you.

Re: QUERY: beginner to PAYE tax & NI (part deux)

wrote:

> wrote:
>> Ronald Raygun wrote:
>> > wrote:
>> >
>> > > Quote from Ronald Raygun:
>> > > "But if your annual income is less than about £5000, your tax rate is
>> > > zero. If it's less than about £7000 it (i.e. the marginal rate) is
>> > > 10% (i.e. if you earn £7k, you pay 10% of £2k). Above £7k, it's 22%
>> > > (so if you earn £10k you pay 10% of £2k plus 22% of £3k)."
>> > >
>> > > I just got my P60 and my Pay is 8136.36 and Tax deducted is 1789.92
>> > > (for total year). Following your calculation, 10% of £2k is £200, 22%
>> > > of £1136.36 is £250, so my total tax should be £500. Right?
>> >
>> > Right. More precisely, your personal allowance is £4895 and the 10%
>> > band is £2090, so you should have paid £209 for the first £6985 and
>> > then 22% of the remaining £1151, so your tax bill should be £462.22,
>> > and you should be due a refund of about £1328 when you complete your
>> > tax return.
>> >
>> > By the way, I notice that £1789.92 just happens to be exactly 22% of
>> > £8136 (pence are ignored for tax calculations). So it looks as though
>> > you were on a BR tax code as a result of your employer not having been
>> > given a more correct tax code. Had you not supplied a P45?
>>
>> My tax code is indeed BR. My last employment ended in 2004 Sept and I
>> started a new job in 2006 Nov.

I think you must mean November 2005.

>> I can't remember where my P45 is (or
>> whether I was given one) but I assumed that the P45 is useless after
>> over a year of unemployment.

It is. If you could not show your new employer a P45, he should have
asked you to fill in a P46 (I think) instead.

>> Where can I go to claim my 1328 pounds back?

Your tax office.

> I was just using those calculators and it tells me how much NI I should
> have paid (around 500, but I paid 1451.34). Can NI be claimed back?

Yes, if demonstrably wrong, but it's less likely to be wrong than your
income tax, because unlike income tax, it doesn't depend on other
employments. Are you sure the £1451.34 you think you paid isn't really
the total of your and your employer's contributions?

In calculating the NI due, you are supposed to disregard the first £94
per week of your pay, and of what's left, you should pay 11% of that,
and your employer 12.8%.

So working roughly backwards, if £1451.34 is 11%+12.8% of some total,
then that total would be £6098. November 2005 to 5th April 2006
could be about 22 weeks. Now 22x£94 is £2068 which added to £6098 is
£8166, so it looks like being in the right ball park.