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Tax on Wages

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  • #1

    Tax on Wages

    hi all, its nice to be back on here and in a different forum

    ive not got a problem as such but just need something clearing up regarding tax on my wages.

    last tax year (April 2010 - April 2011) i received £2700 due to me being on JSA and then from April 2011 to July 2011 i received £886 on JSA then my job kicked in from July to now.

    now im familiar with the tax code which is 747L and that it means i have to earn £7470 before i get taxed which is correct as i have had 3 lots of wages now and haven't been taxed but is this worked out on this tax year so £7470 minus £886 and my 3 months wages or last tax year so £7470 minus £2700 and my 3 months wages? or both?

    Thanks.
    Tags: None
    • 1 thank
  • #2
    Re: Tax on Wages

    This finacial tax year ONLY
    • 3 likes

    Comment

    • #3
      Re: Tax on Wages

      i thought that as last year would of been a different tax code and would of surely confused things.

      do you know how this works? will i keep being untaxed untill i earn over £7470? which would be around January on my £15000 salary? then i assume i will be taxed based on all my wages rather than minus the allowance which should be the £7470 divided by each calendar month?
      • 1 thank

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      • #4
        Re: Tax on Wages

        As far as I am aware you will be taxed as soon as you earn the £7470, but I am not sure if the JSA is included in the £7470
        • 3 likes

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        • #5
          Re: Tax on Wages

          If its taxable, then yes the amount earnt from JSA will be included in the total earnings allowed before tax is deducted from your earnings.
          Please note that this advice is given informally, without liability and without prejudice. Always seek the advice of an insured qualified professional. All my legal and nonlegal knowledge comes from either here (LB),my own personal research and experience and/or as the result of necessity as an Employer and Businessman.

          By using my advice in any form, you agreed to waive all rights to hold myself or any persons representing myself of any liability.

          If you PM me, make sure to include a link to your thread as I don't give out advice in private. All PMs that are sent in missuse (including but not limited to phishing, spam) of the PM application and/or PMs that are threatening or abusive will be reported to the Site Team and if necessary to the police and/or relevant Authority.

          I AM SO GOING TO GET BANNED BY CEL FOR POSTING terrible humour POSTS.

          The Governess; 6th March 2012 GRRRRRR
          • 3 likes

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          • #6
            Re: Tax on Wages

            JSA is a taxable means tested benefit - which will be included with anything earned that same year, so as stated above, as soon as you hit the earning of the tax code, then it will become taxable again.
            • 3 likes

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            • #7
              Re: Tax on Wages

              you dont earn up to your tax allowance BEFORE starting to pay tax. Thats not how it works.

              Your first wage is anticipated as your average, an estimate of your annual income calculated, the tax allowance subtracted, and tax on the balance calculated. (best way i can explain it)

              You should be taxed and NId from your first pay cheque so i would be querying that.
              • 4 likes

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              • #8
                Re: Tax on Wages

                Originally posted by stevokenevo View Post
                you dont earn up to your tax allowance BEFORE starting to pay tax. Thats not how it works.

                Your first wage is anticipated as your average, an estimate of your annual income calculated, the tax allowance subtracted, and tax on the balance calculated. (best way i can explain it)

                You should be taxed and NId from your first pay cheque so i would be querying that.
                Makes sense, thanks stevo

                Liam please disregard my post 4
                • 2 likes

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                • #9
                  Re: Tax on Wages

                  Just to clarify further, although you may have handed in your P45 to your employer, their is no certainly as to how long it will take before the HMRC have processed and setup an account for you, therefore it could be 2-3 months or longer from the start or employment to any tax actually being taken from your wages. Before it used to be within the first month or 2 but i guess recent cut backs etc have added to futher delay at the HMRC.
                  Please note that this advice is given informally, without liability and without prejudice. Always seek the advice of an insured qualified professional. All my legal and nonlegal knowledge comes from either here (LB),my own personal research and experience and/or as the result of necessity as an Employer and Businessman.

                  By using my advice in any form, you agreed to waive all rights to hold myself or any persons representing myself of any liability.

                  If you PM me, make sure to include a link to your thread as I don't give out advice in private. All PMs that are sent in missuse (including but not limited to phishing, spam) of the PM application and/or PMs that are threatening or abusive will be reported to the Site Team and if necessary to the police and/or relevant Authority.

                  I AM SO GOING TO GET BANNED BY CEL FOR POSTING terrible humour POSTS.

                  The Governess; 6th March 2012 GRRRRRR
                  • 2 likes

                  Comment

                  • #10
                    Re: Tax on Wages

                    Originally posted by stevokenevo View Post
                    you dont earn up to your tax allowance BEFORE starting to pay tax. Thats not how it works.

                    Your first wage is anticipated as your average, an estimate of your annual income calculated, the tax allowance subtracted, and tax on the balance calculated. (best way i can explain it)

                    You should be taxed and NId from your first pay cheque so i would be querying that.
                    thats how i thought it worked, basically my tax allowance is divided up into each month?

                    i spoke to the admin lady at work and she seems to think i wont get taxed until ive earned £7470 due to me not earning much last year but then that would surely mean i get taxed on the entire of my remaining months wages until the next tax year?

                    will i have to back pay the tax ive not been charged?

                    thanks

                    Comment

                    • #11
                      Re: Tax on Wages

                      sometimes you get a tax rebate for the previous year in your wages if you had been taxed on a low income previously (if you were taxed on an income lower than your allowance), But, this would be clearly marked in your payslip.

                      All i can say is i have never experienced a situation where you dont pay tax till you hit your allowance (and i have experience of owning 3 companies and employing people).

                      So based on what you have told me , as big Dunc would say, 'im out'

                      Comment

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