Does anyone understand payroll?

[Fred Bassett]

I'm trying to help my daughter who has just recently started work. I can't work out if she has paid the wrong amount of tax or not.

 

Regards.

 

Fred

[johnvernon74]

Whats is her tax code and what has she paid to date in this financial year? Apr 5th 2012

[Fred Bassett]

Tax code is 747L. What she has paid so far is PAYE 424.40, NI 242.22. This is confusing though. She started work on March 12th having been a student through all of 2011/12 until the middle of February. She had some earnings during that time, but nowhere near enough to attract taxation. Where she works they gave her an advance on salary of 683.00 for March - not something she asked for, they just did it. My problem here is that I think she's paid tax on what she earned for March when she shouldn't have done as her earnings in that financial year were not enough.

 

Cheers.

 

Fred

[johnvernon74]

The tax year closes 4th April 2012, and companies will roughly work out the tax. I assume she has not been paid for the end of April yet. The advance that she received in March may show wrongly on her pay slip in April and over taxed. However, when she receives her P60 she should be able to reclaim this via the tac office.

 

The figure you quote in your post is this on March payslip? Is she paid weekly. On a tax code of 747L she should be able to earn £622 per month before tax.

[Nystagmite]

The tax code changed in April. You may get more of an answer in the employment forum?

[Gbarbm]

Did she have any previous employment before this one and if so, did she have a P45 and did she hand it to the new employer?

Also, regarding the tax code, is there an x or W1/M1 after it?

[Fred Bassett]

Thanks for the replies folks. The full tax code states 747L NONCU. She had previous employment, but it was only intermittent. I don't believe she received a P45.

[SOD'EM]

I always thought that a tax code with an L on the end was what every new employee got (an emergency tax code). If so, she can look forward to a rebate in a few weeks or so when they have her proper code sorted out.

[Gbarbm]

Noncu means non cumulative. It is a coding device if you like (often referred to the emergency code in laymans terms) where the pay on each week or month is treated as if it were the first week or month of the tax year.

The usual reason why this coding basis may be used is because

HMRC have no information of the tax pagers circumstances for the period from 6 April up until the date the job commenced. Once the information is obtained, cumulation will be restored.

However, as it is now the end of the tax year HMRC will await P60 details.

The P60 will be issued to the individual by 31 May but HMRC are unlikely to process it until Sept.

If the individual wants HMRC to check if a refund is due before then, a copy of the P60 should be sent to HMRC with a covering letter giving full details of any other income received in the tax year to 5 April 2012 requesting that they carry out a review.

There is likely to be a refund due as the non cumulative basis does deduct slightly more tax than the normal cumulative basis