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Tax code advice

Discussion in 'General Discussion' started by megakid, 28 Jul 2006.

  1. megakid

    Wise Guy

    Joined: 6 Jun 2004

    Posts: 2,389

    Location: London

    Hi all,

    I wonder if there's any tax experts who can give me some quick advice?

    Excuse me if this is long but if anyone can offer me any advice, I'd appreciate it greatly!
    Last september I got a job at weatherspoons - this was my first job that particular tax year and I didnt work the previous tax year either so no P60 or P45 to give to them when I started working. They didnt ask me to fill out a P46 (and I didnt know any wiser at that point) so...I get charged 22% tax on my measly £60pw income on a BR (or BR1?) taxcode. "Fine" I thought - "I'll claim it back".
    So, in December (3 months later) I'd had enough and quit (never work there - trust me!) and immedietly got a job at Blockbuster where again, because Weatherspoons was slow - I didnt have a P45 to give in but I said I would so didnt fill out a P46 again - still on the BR taxcode. About 2 months later, Weatherspoons FINALLY sent me my P45 after much nagging from me. I handed this to Blockbuster asap - it was now Feburary.

    The tax year end came and went - I'm still getting taxed £1 every hour I work (I earnt £5 an hour) - no biggy, I'll claim it back. So I get my P60 from blockbuster and all is fine. I dont know if I should have acted now but I didnt - exams etc. Anyway, continue on a Blockbuster still on BR tax code in the new tax year. Then I quit Blockbuster and come to the City and do an internship - now I'm earning almost £700 a week and I didnt have a P45 to give them from Blockbuster (too slow again) - but this time I fill in a P46 - and get put on 503L1 tax code (which I understand is "awaiting processing" or something similar?). This means I will be taxed over £4000 this year and I'd have earnt about £12000 net. I understand I will have earnt over the personal allowance therefore I'll have to pay a little tax but not that much!!

    What are my options?

    Will I have to wait until April, new tax year (*sob*) to claim it all back? Can I do something about it now?? What would you do?

    Regards!

    James
     
  2. Admiral Huddy

    Caporegime

    Joined: 17 Feb 2003

    Posts: 29,617

    Location: Chelmsford

    £4k does sound a lot tbh.

    Have you filled in a tax return form for last year detailing all your income? It sound like you'll need to sum up all your earnings and let them calculate it for you, regardless what your P45/P60 says.

    If you didn't have a code, then you'll be taxed on everything and any money owing will be paid as soon as your assement is complete.

    My guess is that if you have had iregular earning, you may be paying tax on account. Which basicallt means your paying for this years tax in advance. They are assuming that you earn the same as last year and will tax you on that assumtion. Basicallt the IR don't like being owed money.

    The dealine for the Inland revenue to caluculate your tax is September 2006 for year ending 5th April 2006.

    My advice is to call the tax office on your last notice of coding and tell them exactly your situation. The will help you.
     
  3. megakid

    Wise Guy

    Joined: 6 Jun 2004

    Posts: 2,389

    Location: London

    I calculated, with my pre-tax earnings as of Sept 06 - I would have to pay approximately £500 tax (taking into account personal allowance). I know for a fact that I have already paid well over quadruple that!

    I have never done a tax return as I thought that was for self-assessment? I have always been on PAYE.
     
  4. philio16

    Gangster

    Joined: 18 Oct 2002

    Posts: 158

    Location: Manchester, UK

    Find out the tax office for your employer (and possibly your old ones) and give them a call. They helped me reclaim £2500 and it was all pretty speedy service!
     
  5. Admiral Huddy

    Caporegime

    Joined: 17 Feb 2003

    Posts: 29,617

    Location: Chelmsford


    You need to do a tax return.. Just ring the tax office and they'll send you one. Once you have filled in all the details send it back and they'll calculate exactly your position.

    You need to ask for a seperate Employee form for each job you done in that tax year.

    It's the only way i'm affriad. If you miss 30th September, then you will have to do it yourself. "self assesment" as you say. The deadline for that is 31st January 2007.


    Is soon as they realise they owe you money, you'll get a refund. Likewise, if you owe them, you'll get a bill.

    If your income is irregular, you will have to pay tax on account i'm affraid.
     
  6. chippie

    Wise Guy

    Joined: 7 Dec 2003

    Posts: 1,566

    First off you do not need to complete a self assessment tax return and you have until 31 January 2012 to get the year ended 5 April 2006 sorted out.

    Now, here is what you need to do:

    Write a letter to your tax office and enclose your P45 from Wetherspoons, and your P60 from Blockbuster for the year to 5 April 2006 and ask for a refund.
    Include in the letter a bit saying that Wetherspoons and Blockbuster were your only jobs in the year, and prior to starting at Wetherspoons you were a student or whatever, and state if you were claiming any benefits or not.

    You will then get a cheque back for overpaid tax for that year.

    Include in the letter that you are currently working for whoever your current employer is, and say that you are on the wrong code. Provide them with a copy of your P45 part 1 (keep a photocopy for yourself) from when you left Blockbuster and they will issue the correct code. Any overpaid tax for the current year will then be refunded to you with your wages when your employer operates your new code (this will mean you will pay -tax so it will be added onto your gross pay, or you might just pay much less than normal until it evens out)
     
  7. Admiral Huddy

    Caporegime

    Joined: 17 Feb 2003

    Posts: 29,617

    Location: Chelmsford

    By law, everyone should submit a tax return form were your earnings are either subject to further tax or where too much tax has been paid.

    What he really needs to do, is pick the phone and speak to a tax advisor at the inland revenue. They may ask him to fill in a tax return or they may ask him to submit the said details.

    .. and where did you get 2012 from.. Sorry mate but if you owe tax after the January deadline for the tax year just gone, you will have to pay interest on money owed and subsequently fined.
     
  8. chippie

    Wise Guy

    Joined: 7 Dec 2003

    Posts: 1,566

    No they don't, not if they are dealt with under PAYE. You are however legally obliged to inform HMRC of any income you receive that isn't taxed.

    As he is dealt with under PAYE then you have 5 years and 10 months after the end of the tax year in question to be reviewed, that means for the year ended 5 April 2006 he (and HMRC) have until 31 january 2012 to review the year.
     
  9. Oakesy2001uk

    Mobster

    Joined: 7 Sep 2005

    Posts: 3,312

    I dont understand all this tax business, I should sit down and do the sums as I'm proably owed something. wish you could go see "the tax man" and say, eh up mate what do you owe me! :D
     
  10. Admiral Huddy

    Caporegime

    Joined: 17 Feb 2003

    Posts: 29,617

    Location: Chelmsford

    accepted - but he can still complete a tax retrun form.. it'll save a lot of bother.




    I think you are getting a little confused..

    The deadline for completing self assessment is 31st January. Payment is due on or before this date. The penalty for late payment is a fine and tax owed accrues interest on account.

    The IR have right to review your tax affairs for 5 years after the end of tax year (VAT longer).
     
  11. Admiral Huddy

    Caporegime

    Joined: 17 Feb 2003

    Posts: 29,617

    Location: Chelmsford

    that is what the Tax Return form is for.. It works both ways.

    :)
     
  12. chippie

    Wise Guy

    Joined: 7 Dec 2003

    Posts: 1,566

    I'm not confused. He is not dealt with under self assessment, therefore does not need to complete a return

    If you are not dealt with under self assessment then there are no penalties or fines, and you are not charged interest on any underpaid amounts.

    As I said, 5 years and 10 months, to take it to the 31 January.

    I do know what I am talking about because I am a taxman and I do this all day long every day.
     
  13. Grrrrr

    Soldato

    Joined: 23 Oct 2002

    Posts: 5,696

    Location: Various

    I've been having problem with my tax code as well, guess what i did... *shock horror* i rang up the tax office and sorted it out.
     
  14. Admiral Huddy

    Caporegime

    Joined: 17 Feb 2003

    Posts: 29,617

    Location: Chelmsford

    I was waiting for that ;)

    haha then you must be right then. It'll make a change for someone working for the tax office to know what they doing then! :p
     
  15. WillyNelson

    Soldato

    Joined: 28 Oct 2003

    Posts: 5,443

    Location: Worthington-on-sea

    There is no way that the OP has underpaid their tax so I would very much doubt that they will be required to fill out a self assesment for a run-of-the-mill tax code problem.

    Megakid, ignore all the hoo-ha about deadlines etc and follow chippie's advice. It's a very simple problem with your tax code and will be very straight forward for your tax office to sort out.
     
  16. Sequoia

    Wise Guy

    Joined: 15 Aug 2005

    Posts: 2,948

    Ooooh. I'm glad it wasn't me that said that, even if I agree. ....... Er ..... wait a min ....


    :D
     
  17. Fishman

    Wise Guy

    Joined: 19 Oct 2002

    Posts: 1,035

    Location: Welwyn Garden City

    I was under the impression and think that im correct in saying that until your earn enough to pay into the 40% tax rate at a standard job then you wont have to do a tax return every year. This is reserved for people that earn more and those that attract the attention of the IR by such activites as cashing in shares. [edit] + self employed/those with multiple jobs at the same time. As long as you are PAYE and they have you NI number they pretty much know what you are earning [/edit]

    You wont have to fill a tax return in unless they send you the form/request.

    Last year I overpaid tax by ~£480 as per my calculation. I filled in a form stating how much I earnt, a few of my bank accounts which do and do not pay tax on income and how much tax I had paid. I dont think I had to send a p60 (the one every year) or any other form off, there was merely a box to check that confirming the data came from that form.

    A week later I get the letter agreeing with my assesment with a cheque for slightly more than I had calculated !
     
  18. Admiral Huddy

    Caporegime

    Joined: 17 Feb 2003

    Posts: 29,617

    Location: Chelmsford

    haha I can't argue with that. I'm only saying what i'd do and what i've been doing for years.


    As I said, the mans gotta pickup the phone rather than listen to our ill advice. :)
     
  19. Skeptic

    Mobster

    Joined: 18 Oct 2002

    Posts: 4,153

    Location: UK

    Thanks, Chippie! I'm not in exactly the same situation but mine is quite similar; you've just cleared a lot up for me. Saved me a phonecall!

    Thanks again.