1. This site uses cookies. By continuing to use this site, you are agreeing to our use of cookies. Learn More.
  2. Hi Guest, welcome to the TES Community!

    Connect with like-minded education professionals and have your say on the issues that matter to you.

    Don't forget to look at the how to guide.

    Dismiss Notice

I've not been paying income tax?

Discussion in 'Pay and conditions' started by adamson89, Jan 21, 2016.

  1. adamson89

    adamson89 New commenter

    Hi all!

    I'm an NQT having started in September. I have noticed that income tax has not been deducted so far. This month I will have earned roughly £10,000 since I started so that means next month I will have been paid above the personal allowance of £10,600. Have I mistakenly not being paying income tax or is this usual and I will start paying tax next month once I am over the personal allowance?

    If I do start paying tax next month, will I be expected to pay the 20% income tax of my full yearly salary minus £10,600 personal allowance in the remaining 7 months of the year?
    That would mean £384 a month income tax which seems awfully high! This would virtually cripple me financially and seems like an odd way of doing things!

    I hope this makes sense as it is really confusing me!
     
  2. Rott Weiler

    Rott Weiler Star commenter Forum guide

    .
    All pay slips should show a Tax Code, what is it on yours?
    .
    .
     
  3. adamson89

    adamson89 New commenter

    Thanks for commenting! It is 1060L/N
     
  4. adamson89

    adamson89 New commenter

    Thanks for commenting! It is 1060L/N
     
  5. applecrumblebumble

    applecrumblebumble Lead commenter

    I would check this with your payment office you should be paying some tax after your personal allowance is applied. Otherwise by your comment they would have to tax you 20% on all your income from next month until April 5th 2016 (end of tax year). Have you done any work prior to taking up your post in September?
     
  6. applecrumblebumble

    applecrumblebumble Lead commenter

    I would check this with your payment office you should be paying some tax after your personal allowance is applied. Otherwise by your comment they would have to tax you 20% on all your income from next month until April 5th 2016 (end of tax year). Have you done any work prior to taking up your post in September?
     
  7. Rott Weiler

    Rott Weiler Star commenter Forum guide

    .
    Sounds like you have the correct tax code, 1060L = you are entitled to the basic personal allowance of £10,600 in 2015/16 tax year and taxed at 20% above that. [The 'N' means "Marriage Allowance: you’ve transferred 10% of your Personal Allowance to your partner" - does that sound right? That'll affect the calculation a bit.]

    I'd do as applecb suggests and ask your HR/payroll office to explain.
    .
    .
     
  8. Piranha

    Piranha Star commenter

    Back of the envelope calculations. If you earned £10,000 in the 5 months to January, that makes £2,000 per month, so £14,000 in the tax year to the end of the tax year. Assuming that pension contributions are to be taken off (free of tax), that leaves about £13,000 taxable income. Take off your personal allowance, and the tax should be about 20% of £2,400 = £480. This is the total for the year. I am assuming not other income in the tax year.

    Do check with payroll, but I don't think it is a big problem as the amount involved is not large.
     
  9. flyingcircusfreak

    flyingcircusfreak New commenter

    Just to clarify @Piranha's post:

    Your personal allowance runs across a tax year, not the academic year. Therefore, if you're earning £22,244 (MPS1 in 2015-16), and started in September, you will actually only have earnt about £13,000 by the time the end of the tax year (5th April) comes around. So you will only need to pay tax on about £2,400, as @Piranha says.

    http://www.listentotaxman.com/ is a good resource for plotting how much tax you should be paying, and in my experience, it's always checking that payroll have got it right.

    FCF
     
  10. frustum

    frustum Star commenter

    They divide up your 10600 allowance and apply 1/12 of it each month. If you weren't working last year, that means you'll have had 5 months allowance stockpiled unused before you started. Nine months (to December) will be £7920 of your personal allowance - possibly by the time pension and NI was taken off, you just hadn't used up your allowance so far. Double check with pay roll, but it may just be that it will only kick in this month - on Piranha's estimate, at about £120 a month.
     
    Landofla likes this.
  11. Piranha

    Piranha Star commenter

    My figures were based on £2,000 per month - if the OP is earning £22,244 pa, then the tax will be on less than £2,400 as pension contributions are taken away before tax is calculated. On reflection, I don't think that the OP needs to do anything, as if they have the right tax code and there was no other taxable income this year (e.g. on a savings account that pays interest without tax being deducted) the revenue and school wil get it right in the end. If too little tax is paid this financial year, then it wil probably have to be paid back over next year, via an adjustment to the tax code. The only thing to watch out for is that more tax will ber paid each month from April, so expect a drop in the monthly pay cheque!
     
  12. frustum

    frustum Star commenter

    If the tax code is right, it's unlikely that it won't all be correct by the end of the year (as you say, unless there's any adjustment due to other income sources).

    I was highly impressed when I quit one of my two part-time jobs (which between them did not use up the personal allowance). I had paid £8 of tax on the job I quit, and the next month that was credited to me on my payslip from the other job. I'd assumed I would have to wait until the tax return at the end of the year to sort it, but PAYE is really rather clever.
     

Share This Page