Tax question?

Question

If I earn £22991 for the fist 5 months of the financial year then I swith to £16000 for the remainer of the year will i have paid too much tax?

Answer 1

You might well do.

Assuming you are an employee rather than self employed, make sure your pass your P45 from your old company to your new one. At the end of the financial year you will get a P60.

The P60 will show what you have earned and what tax you have paid - from this you can calculate yourself whether or not you have overpaid your tax.

If you don't know how to do that yourself, call your local tax office - I've always found them to be very helpful. They usually ask you to send in your documents then get back to you with a cheque! (Unless they discover that you have underpaid, in which case, they'll be asking for more, but this is unlikely in your case)

Try this website to contact your local tax office:
http://www.hmrc.gov.uk/individuals/iwtcontact-my-tax-office.shtml

Answer 2

The answer to your question is No! see why below

For the 2006/07 tax year, your allowance is £5,035, which means on your first £5,035, you will not pay any tax. On the next £2,150 Earned you pay tax at a rate of 10%. You therefore pay £215 on a total of £7,185. On the remaining amount of your first salary (22,991 - 7,185), you pay tax at the rate of 22%, which is £3,477.32. This brings your total amout of tax to £3,692.32 (£71.00 a week). You will therefore note that if your first Job was Paye, that your employer would have deducted the amount of £71.00 each week on behalf of HMIT.

The same applies to your second job in which you now earn less. Your tax here will be £215 + ((16,000 - 7,185) x 22%) = £2,154.30 (£41.43 a week). If this job is paye, then your employer will deduct this amount each week on behalf of HMIT.

So if you worked a total of 22 weeks in your first job and a further 30 weeks in your new job, then the total tax payable for the tax year would be (22weeks x £71)+(30weeks x £41.43) = £2,804.90.

You will find at the end of the year that you have not overpaid any tax, but if you have, HMIT will be quite happy to repay it back to you. Please note that these calculations do not include NI deductions, which are also done on a pro rata basis, so again you will not be overcharged.

I hope this is helpful and enables you to work things out should you change job again.

Answer 3

If your tax is payed by PAYE ie taken directly from your wage then you will pay the correct tax. At the end of the year you will receive a P60 form which will tell you your total earnings and tax for that year, if you think you have paid too much tax you should contact the tax office as given on that form.

Answer 4

Provided you gave your P45 from your last job to your new employer, the operation of the PAYE scheme will take into account your new lower salary, and you will pay much less tax (or maybe even get a small tax refund) in the first months pay.

Your tax deductions will then even out for the rest of the year.

Answer 5

No because PAYE works on what you have paid cumulatively throughout the year each time it is calculated. Provided you had a P45 when you changed employment it will all come out in the wash.

Answer 6

No, because both rates of pay exceed the personal allowance.

Answer 7

yes

Answer 8

no dont think so