New to the UK, confused with taxing.

retro · 23-01-2008, 20:02

So I'm just settling down in Portsmouth from Toronto Canada, basic job to keep me afloat while I pursue my hopes and dreams after graduating post-secondary back in the lands of Canucks.

But whats bothering me is the high rate of taxing out here (and this coming from a Canadian!). I'm on what seems to be the standard 522L code, but after my monthly wages are added, I seem to be paying, on average, about 50% - 55% more than my fellow workers on the same code. I've been with this employer since 02/07/07 and this is my first job in the UK since landing in 04/04/07. Any help in figuring this out, and suggestions of any type

wuld be appreciated.

Also, anyone know of anyone out here looking for some 3D animation workers?

Thanks!

danielf · 23-01-2008, 20:25

Give the tax man a call. Usually they are very helpful.

Also, as you started work halfway through the tax year and are (presumably) on PAYE (Pay As You Earn), consider the following. Normally, 1/12th of the personal allowance (non-taxed band) is subtracted from your monthly wages before tax is calculated. If you only work for half the tax year this means you miss out on part of your personal allowance. You can claim this back at the end of the tax year. This can easily be a few hundred quid.

**Russ** · 23-01-2008, 20:31

Try www.hmrc.gov.uk as a good start with regards to tax issues.

retro · 23-01-2008, 20:33

Thanks, I plan on giving my HR a good thorough visit tomorrow and HMRC a call as well. I am on PAYE as you mentioned, and would having missed those 3 months between the start of the taxed year (starts in April, right?) and the start of my employment have been that screwy with my taxes?

Also, I've heard rumors around work that my employer is pretty sketchy with taxing and doesnt go out of their way easily to help out.... Here's hopin for the best.

**Derek** · 23-01-2008, 20:35

to the site and the UK

In addition to the advice above you'll basically get a huge chunk taken off in income tax, then more for council tax, fuel duty, taxes on alcohol and tobbaco. Flying anywhere, driving anywhere, buying a house, getting money from someones will. etc. etc.

Generally breathing is free, everything else you pay for.

**Russ** · 23-01-2008, 20:37

Quote:

Originally Posted by Derek S

Generally breathing is free

The Treasury is working on this apparently.

SMHarman · 23-01-2008, 20:38

You may be on week one tax even if you have have a personal allowance recorded. This could well mean that you are taxed at 22$ or 40% on a lot more income than you should have been.
Unlike the US (and I have no clue about Canada) there are very few deductions from your income.
http://www.hmrc.gov.uk/rates/it.htm
Salary - 5225 = Taxable Salary.
Take the first 2150 and pay 10% of that in tax
Take the next 31149 or less and pay 22% of that.
Anything above this (so you would need to be earning over 38525p/a will be at 40%

http://www.hmrc.gov.uk/forms/p49.htm
http://www.hmrc.gov.uk/forms/p49.htm#16 for more info on Wk1 pay.

On top of that there is National insurance which you may be exempt from depending on how long you are planning on staying here. http://www.hmrc.gov.uk/nic/ni.htm

If you are on Wk1 you will be taxed every week on a non cumulative basis and you need to get that adjusted. If you can get your employer to adjust that then the magic of PAYE means they will then calculate your tax refund and pay it back to you. No need to file a claim in April, the catchup of your unused annual exemption will just kick in.

phaze9 · 23-01-2008, 20:39

Quote:

Originally Posted by Russ B

The Treasury is working on this apparently.

Air 50 pence a litre plus points when you purchase it at all Tax Offices

retro · 23-01-2008, 20:55

Quote:

Originally Posted by Derek S

to the site and the UK

In addition to the advice above you'll basically get a huge chunk taken off in income tax, then more for council tax, fuel duty, taxes on alcohol and tobbaco. Flying anywhere, driving anywhere, buying a house, getting money from someones will. etc. etc.

Generally breathing is free, everything else you pay for.

I've noticed this, and it's ridiculous. What my wife (british gal) and I plan on doing, once we've spent the next 5 - 8 years out here, transfered all inheritances, and such into our names, and enjoyed the UK to its fullest, we're moving back to Canada where you can sit on a public bench without popping in a bit of change first. Hell, for the price of a small single beroom flat out here you can get yourself a 5 bedroom house, 3 bathrooms, and a few acres in my hometown.

But I gotta admit, the curry is much, much better out here.

---------- Post added at 20:55 ---------- Previous post was at 20:40 ----------

Also, another thought, does doing overtime = higher tax rate? I did about 300 quid of overtime over 8 hours on Christmas day, and as that pay hit my Jan paycheck, I'm seeing just over 20% taxation on the whole months pay.

SMHarman · 23-01-2008, 22:38

Quote:

Originally Posted by retro

I've noticed this, and it's ridiculous. What my wife (british gal) and I plan on doing, once we've spent the next 5 - 8 years out here, transfered all inheritances, and such into our names, and enjoyed the UK to its fullest, we're moving back to Canada where you can sit on a public bench without popping in a bit of change first. Hell, for the price of a small single beroom flat out here you can get yourself a 5 bedroom house, 3 bathrooms, and a few acres in my hometown.

You might want to get some tax advice on that. Transfers of UK assets to non UK citizens through marriage based relief is limited. This is the Chargable lifetime transfer rules. Not like the usual IHT is 0 on transfers between husband and wife rule.

Quote:

Originally Posted by retro

But I gotta admit, the curry is much, much better out here.

So true, I miss english curry, though http://www.bricklanecurryhouse.com/ ain't bad.

Quote:

Originally Posted by retro

Also, another thought, does doing overtime = higher tax rate? I did about 300 quid of overtime over 8 hours on Christmas day, and as that pay hit my Jan paycheck, I'm seeing just over 20% taxation on the whole months pay.

Depends. Your NI contributions will go up, your tax depends on where you are in the year and the rate tables. If you did a huge amount of overtime in a week or month, say the first month of the tax year that pushed you into higher rate brackets if you continued to earn that each month for the year then you would pay higher rate tax at that time, however as the year progressed and your average income falls below then that would be refunded through the beauty that is PAYE. When PAYE is working well it is a beautiful thing as it means that most people in the country don't have to worry about doing tax returns (compared to every man woman and child in the US having to file at least a 1040EZ each year). At the outset it can be a little more fiddly. I assume you have gone and got yourself an NI number.

KaySquirrel · 24-01-2008, 10:16

Finally, another Canuck on the board!!!

to CableForum, and to the UK!

Charlie_Bubble · 24-01-2008, 11:03

Quote:

Originally Posted by retro

Also, another thought, does doing overtime = higher tax rate? I did about 300 quid of overtime over 8 hours on Christmas day, and as that pay hit my Jan paycheck, I'm seeing just over 20% taxation on the whole months pay.

No, your overtime will be taxed at the same rate as your normal pay, unless you go into the 40% tax band through the extra income.

Taf · 24-01-2008, 11:21

When you first start working here you often find you pay too much tax, then you have to claim it back in April... You'll get a form P60 issued from work which shows total earnings and taxes for the year. Oddly, the taxman has the info already, but if you don't claim, you don't get the refund...

Try this online calculator http://www.listentotaxman.com/index....bmit=Calculate

SMHarman · 24-01-2008, 13:47

Quote:

Originally Posted by Taf

When you first start working here you often find you pay too much tax, then you have to claim it back in April... You'll get a form P60 issued from work which shows total earnings and taxes for the year. Oddly, the taxman has the info already, but if you don't claim, you don't get the refund...

Try this online calculator http://www.listentotaxman.com/index....bmit=Calculate

If you are a basic rate taxpayer with one job then they should not need to as your employer should be getting it right and refunding on their behalf.

**Maggy J** · 24-01-2008, 14:16

Welcome to the south coast retro.. I'm over in Gosport.

I'm wondering if you have been put on the emergency tax code as all new workers in the UK tax system often are until the tax man gets caught up with the paper work?You then get the excess you paid back as a rebate.