Results 1 to 7 of 7

Thread: tax codes

  1. #1

    tax codes

    hi all,

    I got told today our shifts at work will be changing. so it made me wonder how it would affect how much tax I pay.

    come the end of the year I will earn about 4000 over the basic rate of tax because of overtime meaning I will have to pay 40% on the £4000, is this correct?

    my tax code is currently 106l

    next year the shift will change and my basic will be £41800 with no overtime.

    because I have earnt more the year before does this mean I will have to be on a lower tax code for the 2016 - 2017 year even tho I will not earn above the tax threshold this year?

    iv been trying to work it out and looking online for a couple of hours trying to work it all out but its just confusing me even more.

    basically im worried that I will be even worse off for a year because my tax code will change because they will assume I will earn over that amount again this year authough it will actually be less.



    any help would be great.

    thanks







  2. #2
    106l indicates your threshold of £10,600
    thats a standard code for your tax free threshold since apr 2015

    no reason that would be affected by your p60 from the previous year going in to next year Unless you breach £100k and get a T suffix to the code

    you won't be worse off as only the part above the higher rate threshold receives the higher rate tax
    Last edited by bewsher500; 17-01-2016 at 19:12.

  3. #3
    Each tax year is separate under PAYE.

    6th April 2015 – 5th April 2016

    Personal Allowance is £10,600 (tax free)
    Standard Rate threshold £31,785 (next £21,785 over £10,600 is taxable @ 20%)
    Higher Rate band £42,385 (rest up to 100K is taxable @ 40%)


    6th April 2016 – 5th April 2017

    Personal Allowance is £10,800 (tax free)
    Standard Rate threshold £31,900 (next £21,100 is taxable @ 20%)
    Higher Rate band £42,700 (rest up to 100K is taxable @ 40%)

    It sounds like your earnings were higher this year so these will have been taxed accordingly.

    Only if you’ve underpaid tax will your Tax Coding be reduced for 2016 – 2017 by reducing your personal allowance (tax free pay).

    If you’re earning less on Basic Pay without doing any overtime then you’ll be earning less so paying less tax.

    The chancellor has actually narrowed the 20% Band so people are drawn into the 40% Higher Rate Band earlier & will pay more tax.
    Last edited by Sinistral; 17-01-2016 at 20:45.
    If I'm going to be accused of it then it's just as well I did it.

  4. #4
    ok thanks for the replies. so once I have reached the 40% threshold this year probabley by next months pay will I then pay 40% on the remaining month? or will I just get a bill at the end of the year and stay on the same code for next year?

    thanks

  5. #5
    I,m self employed just had my tax bill off my accountant bloody mind boggling,tax plus advanced tax you lose the will to work.

  6. #6
    Quote Originally Posted by Tomm View Post
    ok thanks for the replies. so once I have reached the 40% threshold this year probabley by next months pay will I then pay 40% on the remaining month? or will I just get a bill at the end of the year and stay on the same code for next year?

    thanks
    Your tax-free pay (TFP) and taxable pay works on a cumulative basis through the year, and tax is deducted automatically through a set of tables.

    It’s easy to work out roughly how much tax you’ll pay. All the figures you need are on past payslips.

    By the end of month 11 your TFP allowance to-date will be £9,717 and your taxable pay to-date will be around £42,700 or thereabouts. You pay tax at standard rate and higher rate proportionately each month so just work out what tax is due on 11/12ths of the standard rate band of £31,785 … which is (£29136 @ 20% = £5827) and anything over at 40%. That will give you your tax due to date at end of Month 11.
    To get the net figure take away what tax you’ve paid to date from your month 10 payslip entry, and you’re there.

    It’s a bit more complicated than this because of National Insurance deductions which are banded too, and levied at a higher rate the more you earn.

    Anyway, a bigger chunk of your earnings in Month 12 will be taxed at higher rate. You won’t get a tax bill, and HMRC & you will be all square at year end. Your tax code for 2016/17 will be the standard 108 so will be the same as before after indexation.

    I’ve never earned enough to pay higher rate tax, so maybe should be charging you for my time on this.
    Last edited by Sinistral; 17-01-2016 at 23:19.
    If I'm going to be accused of it then it's just as well I did it.

  7. #7
    SD Regular teyhan1's Avatar
    Join Date
    Mar 2012
    Location
    Berkshire then Dorset now Herefordshire with a good dose of Dorset
    Posts
    2,330
    Blog Entries
    1
    View my Gallery (15)View my Gallery (15)
    Just use this one, it is very simple

    The Salary Calculator - 2015 / 2016 Tax Calculator
    “Man surprised me most about humanity. Because he sacrifices his health in order to make money.Then he sacrifices money to recuperate his health. And then he is so anxious about the future that he does not enjoy the present; the result being that he does not live in the present or the future; he lives as if he is never going to die, and then dies having never really lived.”........Dalai Lama

Similar Threads

  1. Discount codes
    By Thetownie in forum Deer Stalking General
    Replies: 0
    Last Post: 17-01-2016, 12:57
  2. Speechless - Tax Disc - Unpaid Tax
    By enfieldspares in forum Off Topic
    Replies: 32
    Last Post: 30-11-2015, 09:11
  3. Uttings discount codes
    By Mat7530 in forum Deer Stalking General
    Replies: 2
    Last Post: 22-09-2015, 21:42
  4. Proof Date Codes
    By enfieldspares in forum Rifles & Calibres
    Replies: 9
    Last Post: 07-05-2015, 10:16
  5. Replies: 16
    Last Post: 09-02-2012, 15:41

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •