Tax.

[Oh How Original]

Basically I am starting a new job on the 4th May and I can pick and choose what hours I do.

I know the standard allowance in the UK is £12,500 before you pay tax, but am I right in thinking if I earn say £13,000 a year, I'll get taxed on it all throughout the year and then receive the tax back at the end of the fiscal year?

It's the first job that I've been able to pick and choose what I do, if I can do less hours and pay less tax and have more free days to go biking and whatever else, then bonus, but is it actually worth it or am I not gaining much?

Not too bothered if I lose a bit of pay by doing less hours, I'm just thinking, a few more hours is basically going to come out in tax anyway.

Hope I've explained that right and someone knows.

[Kpowell911]

Have you worked at all since April 6th 2019?

 

I believe itll work its self out on what you work in the first month and then presume you will get that every month and tax you accordingly. If it fluctuates, youll get it back any over payment. 

 

I understand what youre saying as  i was employed in the 2018/19 tax year  it worked like that for me. I actually earnt £12k in 3 months (wasnt my regular wage there was a £2500 bonus in there) then stopped worked. I paid £1600 in tax and £1100 in national insurance  as it presumed i was going to be earning £4k a month for the whole year, however my employment ended in June 2018. About a week ago i got a refund of £1450. But thats because my expected earnings didnt match how much tax id paid. 

 

With you youll be working the whole year so if you only earn £13k, as long as its spread over 12 months (well 9 in your case) youll just pay the correct amount of tax monthly so wont be an issue i dont think? You should only pay tax on the £500 as youre getting paid monthly? The only reason youd be taxxed differently is if you earnt that £13000 in 2/3 months?

Edited April 29, 2019 by Guns

[Oh How Original]

2 hours ago, Guns said:

Have you worked at all since April 6th 2019?

 

I believe itll work its self out on what you work in the first month and then presume you will get that every month and tax you accordingly. If it fluctuates, youll get it back any over payment. 

 

I understand what youre saying as  i was employed in the 2018/19 tax year  it worked like that for me. I actually earnt £12k in 3 months (wasnt my regular wage there was a £2500 bonus in there) then stopped worked. I paid £1600 in tax and £1100 in national insurance  as it presumed i was going to be earning £4k a month for the whole year, however my employment ended in June 2018. About a week ago i got a refund of £1450. But thats because my expected earnings didnt match how much tax id paid. 

 

With you youll be working the whole year so if you only earn £13k, as long as its spread over 12 months (well 9 in your case) youll just pay the correct amount of tax monthly so wont be an issue i dont think? You should only pay tax on the £500 as youre getting paid monthly? The only reason youd be taxxed differently is if you earnt that £13000 in 2/3 months?

 

No I haven't worked since last year.

I get what you mean as well, my main concern was, if they tax me for the full £13k, would I get it back.

From what you're saying, yes I would, which would be a nice Brucie bonus.

On the flip side I could do 14 hour days, 6 days a week and pull 2,600 a month in and just live with the tax and NI, but with biking season well and truly upon us and having a visit in September for over a week and then taking most of December off, I don't want to commit to anything like that... Would rather casual and not get taxed through the backside.

And yes it's monthly pay, would rather weekly personally but that's just personal preference.

Cheers, you've answered my question nicely.

[Kpowell911]

34 minutes ago, Oh How Original said:

 

No I haven't worked since last year.

I get what you mean as well, my main concern was, if they tax me for the full £13k, would I get it back.

From what you're saying, yes I would, which would be a nice Brucie bonus.

On the flip side I could do 14 hour days, 6 days a week and pull 2,600 a month in and just live with the tax and NI, but with biking season well and truly upon us and having a visit in September for over a week and then taking most of December off, I don't want to commit to anything like that... Would rather casual and not get taxed through the backside.

And yes it's monthly pay, would rather weekly personally but that's just personal preference.

Cheers, you've answered my question nicely.

Tax is a bizarre one It actually turned out quite handy for me this (last tax year) as although it miffed me paying it at the time, I got it back and id have never kept £1450 back so it was a nice bonus.

 

I went though a bit if a topsy turvy time last year due to redundancy and I used this calculator to work everything out and I was spot on with it. My issue was complicated more because I also set up my own company, and had to fill in a self assessment (although profit was tiny due to start up costs, like not even an RC's worth).

 

https://www.uktaxcalculators.co.uk

 

The tax office don't know your future, they can only go on what information they are given, by your employer In term of wages.

 

Lets use your £13k example, and a full 12 month tax year. Doing the same hours each week. Simple.

 

That would mean youre paid 12 times a year and you get

 

£1083 before tax, you would be paying £52 in Tax&NI a month and taking home £1030. You'd pay around £624 in tax a year (so in this example, youre actually worse off than if you just earn £12500....

 

However, you carry on on working the same set hours and earning the same £1083 a month. Paying £52 a month a tax. Simple.  You do this for 3x months. Then, a new Bike part comes out, and you want it. You decide to absolutely live at work for a month. You double your hours. You take every bit of over time. You end up earning £2600 that month (before tax). You only wanted to do it for that month, you will return to doing your basic £1083 wages/hours next month,

 

The tax man now sees that you've earnt £2600. He now thinks youre going to earn £2600 EVER month now cause you've had a massive pay rise. All of a sudden, the tax man now things youre on £26,640 a a year (3x months @ £1083, and 9x months @ £2600). Youre now taxed according this this. Of your £2600, you'll probably see £2000 of it, £600 that month will go to the Taxman. You've gone from paying £600 a year to £600 a month in tax..... However, the next month, you return to your £1083..... So you've actually earnt £14500 (11x months of £1083 and 1 month of £2600). There MAY be a small amount of tax owed back to you, as you paid one months worth on a £26k salary. This will either adjust over the financial year (ie you'll pay less tax in the next few months) orrr you'll get a rebate of any tax money owed.

 

This used to mess me up in my old job, cause Id sometimes get a bonus of £2500, which would land on one pay packet. All of a sudden the Taxman thought id now had a £30k a year raise out the blue (and rinse me for it)

 

Its well worth looking into, and taking advantage of the tax free amount. My Mums in her late 50s, works part time in a super market. I worked out (using that calculator) she could drop a day a week and actually lose no money as she would only need 3x days transport not 4x.

Edited April 29, 2019 by Guns

[Oh How Original]

27 minutes ago, Guns said:

Tax is a bizarre one It actually turned out quite handy for me this (last tax year) as although it miffed me paying it at the time, I got it back and id have never kept £1450 back so it was a nice bonus.

 

I went though a bit if a topsy turvy time last year due to redundancy and I used this calculator to work everything out and I was spot on with it. My issue was complicated more because I also set up my own company, and had to fill in a self assessment (although profit was tiny due to start up costs, like not even an RC's worth).

 

https://www.uktaxcalculators.co.uk

 

The tax office don't know your future, they can only go on what information they are given, by your employer In term of wages.

 

Lets use your £13k example, and a full 12 month tax year. Doing the same hours each week. Simple.

 

That would mean youre paid 12 times a year and you get

 

£1083 before tax, you would be paying £52 in Tax&NI a month and taking home £1030. You'd pay around £624 in tax a year (so in this example, youre actually worse off than if you just earn £12500....

 

However, you carry on on working the same set hours and earning the same £1083 a month. Paying £52 a month a tax. Simple.  You do this for 3x months. Then, a new Bike part comes out, and you want it. You decide to absolutely live at work for a month. You double your hours. You take every bit of over time. You end up earning £2600 that month (before tax). You only wanted to do it for that month, you will return to doing your basic £1083 wages/hours next month,

 

The tax man now sees that you've earnt £2600. He now thinks youre going to earn £2600 EVER month now cause you've had a massive pay rise. All of a sudden, the tax man now things youre on £26,640 a a year (3x months @ £1083, and 9x months @ £2600). Youre now taxed according this this. Of your £2600, you'll probably see £2000 of it, £600 that month will go to the Taxman. You've gone from paying £600 a year to £600 a month in tax..... However, the next month, you return to your £1083..... So you've actually earnt £14500 (11x months of £1083 and 1 month of £2600). There MAY be a small amount of tax owed back to you, as you paid one months worth on a £26k salary. This will either adjust over the financial year (ie you'll pay less tax in the next few months) orrr you'll get a rebate of any tax money owed.

 

This used to mess me up in my old job, cause Id sometimes get a bonus of £2500, which would land on one pay packet. All of a sudden the Taxman thought id now had a £30k a year raise out the blue (and rinse me for it)

 

Its well worth looking into, and taking advantage of the tax free amount. My Mums in her late 50s, works part time in a super market. I worked out (using that calculator) she could drop a day a week and actually lose no money as she would only need 3x days transport not 4x.

 

Thankfully for me it's local, it will cost me about £15 per month in fuel for my bike so that's not a big deal, but when you work it out that way, I might as well do two hours less a week and not pay tax at all.

Then if I decide I want more, I can always increase my hours to a new fixed amount and I'll know exactly how much I'm going to get taxed and paid every month.

I have used a calculator before too, it's a handy tool, I just wasn't sure how accurate it would be.

[dylangrah]

It's disgusting that you have to pay so much taxes just earning a 500 pounds more than the "standard" allowance fixed by the government.  Our elites always say they're backing the poor and middle class but we get hurt much more than the rich. I don't have any personal hate towards the rich but the fact is they usually avoid taxation. They have nice attorneys and pay them a lot of money to find loopholes.  I don't have such money to pay even for tax accountant, so I fill in tax forms on my own. There is software like the ThePayStubs which helps me with that process, but I'd like to get more support from the goverment. At least, don't tax us that much!

Edited September 30, 2021 by dylangrah

[Alex97]

10 hours ago, dylangrah said:

It's disgusting that you have to pay so much taxes just earning a 500 pounds more than the "standard" allowance fixed by the govrmt.

It gets worse when salary goes up, being taxed £500 is the stuff of dreams 😂

[Nick]

You should not get taxed for the whole amount. You will only be taxed on anything over £12,500, like Kpowell has said this is usually worked out by the firms accountants when you first start, it's possible they'll stick you on a temporary tax code until it is all formalised.

 

To work for £13,000 would still be worth it, the tax you pay on that extra £500 is so small it'll still be beneficial I would of thought, unless they are demanding a lot more responsibility/hours from you.

 

National Insurance is still charged on everything you earn, no escaping that one sadly.