Work tax contributions?

[TurboTobz]

I've been told when earning a low-ish wage, your not liable to pay tax does anyone know how much this is that you can earn before paying tax? and also how you go about reclaiming it?

Thanks in advance, ps. I have tried google and have seen mixed answers and gov websites not massively clear.

[kavan-k]

On your pay slip there will be a tax code, mine is 944L, add a zero to the end and thats your number, i can earn up to 9440 before i start paying tax, and if you are already paying it, your work can sort the reclaiming part for you.

Hope this helps.

[TurboTobz]

So you can earn 9440 without tax if you are earning over that are you taxed for whatever you earn after that 9440 or the whole years pays taxed?

Cheers matey

[Fozzie]

You pay tax at the appropriate rate on the excess. So if you earned say £12,000, you'd pay tax on £2,560.

The basic rate is 20% so you'd pay £512, spread over 12 months i.e. you'd loose around £42 each month out of your pay.

You can have a problem with tax because they estimate what they think you're going to earn for the year and then deduct tax accordingly. So if your pay goes up and down, if your first couple months are say £1000 gross, they'll tax you assuming that you'll earn £12000 in a year, then you might have a couple of really low pay months and end up earning less than the taxable allowance in a year, then they end owing you a refund, because they took tax off you when you shouldn't have paid any.

It's all based on the financial year (i.e. April - March) rather than calendar years too, incase that wasn't confusing enough already lol

[kavan-k]

Basically if i eran over 9440 in a year i will pay tax, but as above, its very complicated as they just estimate what you earn, its a pain in the ass when your just starting, i did cash in hand for ages then when i went through the books i was getting paid through an 'emergency tax code'. But after like 4 months i got it all sorted and a tasty tax rebate too

[Jay2ohh]

hell yeah! look at your tax rebate as a savings account let the tax man think he's doing something right then right before the end of the tax year or when you need some extra cash sit on hold for ages tell the fukkaaas theyre taxing you wrong " oh yes mr ..... i believe we owe you ££££" sorted. every new job i've had its a bloody pain but quite good getting it all in one go! i cant remember what i can go up to but i know they've still got me on emergency tax so ill ring them soon

[kavan-k]

^ its brilliant isn't it haha

[TurboTobz]

I think ive got the jist of things, I've never been told about any of this all my previous jobs I've just gathered they'd tax me correctly.

So I do earn over 9440, by a fair bit. So, I get taxed for the what ever I earn over 9440 and the difference between the gross annual income and 9440 will be divided over 12 months and so I am actually correctly taxed?

[Fozzie]

That's the idea mate, as long as you're on a fixed wage it all works out fine and dandy it's only if your income goes up and down that you can end up with issues