Shouldn't every FT worker get a tax rebate?!

[Ch0cDr0p]

Am I being an idiot? I can't get my head around it. I work FT and salaried. I earn above the £12,570 tax threshold like many, shouldn't we all get a tax rebate each year if we are paying 20% on all of our earnings above the 12570?

I’m not sure what you mean, why would you get a rebate?

Why? You will need to explain your logic for concluding that literally everyone is paying too much tax on PAYE.

you get the 12k tax free before paying tax on income above. Why a rebate?

Sorry, but yes, you are

If only! 😃

So if you earn 22570 annually, you pay tax only on 10,000 of it, the amount over your personal allowance. You'd pay 2000 tax.

You don't get taxed on all of it and then refunded some.

What kind of rebate?

Normally it will be prorated throughout the year, so you never pay 20% of everything you get.

So if you earn, say, 2,000 a month before tax, they'll disregard 1,047 (12,570 % 12) and tax you 20% on the remaining 953.

If my first 12k is tax free then aren't I paying too much tax if I pay tax at 20% every month?!

I'm having a mind fart!
Do you only get a rebate if you earn less than 12k?
What if you earned 14k?

Have you ever read one of your payslips?

You'd only pay tax on the 2k. You do not pay 20% of your full salary in tax.

You don't need a rebate because you don't pay tax in the first place (on the first £12k).

But you don't pay 20% tax on your full salary. You pay it on your salary minus your tax free allowance

Exactly this, look at your payslips OP.

They really should teach basic tax concepts in primary schools. Beggars belief how many working adults don’t understand it.

My DC this year, for the first time, will earn around 13000 but has been getting taxed at 20% since April.
Will they get a rebate?

I understood if Dc only earned £8000 then the tax would be returned, so what happens at 13k?

You only pay 20% on anything above 12570.

so if you earn 14k you will pay 20% of 1430.

check your payslip- your “taxable income” amount will be lower than your total income. This is the amount you pay 20% of.

it sounds like you think you pay 20% on the full amount then expect a rebate? No, it’s all done automatically as above.

They’re only paying tax on the amount over 12570. So no rebate.

Ok so when they know salary they pro rate it. That makes sense.

But not for my Dc s above who isn't salaried and in first year of employment and in their 3rd job this year (seasonal work for summer, pocket money job and just started an apprenticeship)

She won't be taxed at 20% of the full 13k though. Unless her tax code is wrong.

Have they been taxed at 20%? What does the taxable income part of their payslip say?

it’s possible they were on an emergency tax code initially if it was a new employment, which may mean they were overtaxed.

it should balance out later to account for it.

I suspect your DC's tax code is wrong and/or they're getting taxed the wrong amount because of the nature of their work. In which case, they probably will get a rebate at the end of the year

Sounds like a tax code problem. What is her tax code?

If they are paying 20% of the total they'll be on an incorrect/emergency tax code, and need to call HMRC and get that changed ASAP. Alternately, they will be able to claim back what's overpaid at the end of the tax year, but it's easier and more straightforward to just give them a call.

No, it’s the same even if you aren’t salaried.

If she's been paying tax on the whole lot then yes she will get a rebate, this happens if the tax code is wrong

But most people tax is calculated before you are paid so you won't have paid tax on the first 12k and aren't due a rebate