AIBU to not understand this situation?

[YoungAndRestless]

The situation here is that I had never worked in the Uk until now and I don't have a National insurance number. I started a job this month and I'm waiting on the national insurance number application. I was told that anyone who doesn't have the number yet will be put on an emergency tax code and will have to pay higher tax.

As expected, I have been put on an emergency tax code but there has strangely been no tax deduction from my salary this month. A national insurance contribution has been deducted from my salary but no tax.

This obviously concerned me and I brought it up with HR. I was told that because I have never worked in the UK before, I haven't used up my tax free allowance yet ( I don't know what that is) and this is why I have not been taxed. I was told that I will have to start paying tax from April onwards when the new financial year begins.

This conflicts with the information I was given before and I'm a little worried that I might run into trouble later.

I am really hoping someone can help me make sense of the conflicting information I'm being given.

Given that the end of the tax year is in three weeks they are correct that you havent used your personal allowance. Not sure about whether they should have taken something anyway, but logically I would say not.

Your best bet is to ring HMRC to check.

Well, everyone is allowed to earn around 6k before paying tax. As you only have March to think about, they know you havent earnt that in one month so cant deduct any thing from you.

If, say, you earn 1k per month, in April they will see that 1k as the first of a total of 12k (they will estimate), and so will tax you on the bit that would be over your allowance.X

Oops dunno what that X was!

Thanks so much everyone :)

I did try giving HMRC to check, but I was put on hold for 45 minutes! I might try again but at the time I thought it was best to ask my employer directly.

I just don't want to be accused of tax fraud later on at some point. Haha

tax allowance is more like nearly 8k and for the next year has gone up to 10K allowance (mine has anyway?!)

You wont get done for fraud?! You may have a re-calculation done if you under pay (guessing you wont be earning that much before April)

I have been over-paying for a few months after a couple of decent months at work pushed me into higher rate tax payer salary bracket- my normal wage means I'm way, way under that sadly. Quick phone call to HMRC sorted that out and got me a nice refund too.

Probably best to fact check before giving someone bollocks tax advice. Personal allowance for this tax year is £9440.

I thought it was aroubd 6k.

So its around nine.

www.hmrc.gov.uk/rates/it.htm

If you're actively trying to resolve the situation, I can't see you getting done for tax fraud.

If it was me, I think I'd look into writing to HMRC rather than calling - no being left on hold AND you have a paper trail -- and I'd also start setting aside the amount you would have expected to be taxed in a separate account, just in case, to stop you getting stung at a later date. If it turns out your employer is right, then it's either treat money or savings for a later date.

(I could be wrong about the letter writing though -- maybe it's more appropriate to call them. It's just something I'd look into.)

You cannot be guilty of tax fraud or get into any other kind of trouble based on your employer getting it wrong. You would only be in trouble if you had lied in order to avoid paying tax. And in this case it sounds like your employer is getting it right.

When you joined you were probably asked to complete a P46 form. On this you would have ticked the box to say you have not been working or receiving JSA or certain other benefits since last April. If you did your employer should have put you on code 944L. That means you can earn £9440 this tax year. Since the tax year runs from 6th April 2013 to 5th April 2014 we are nearly at the end of the tax year so you would have to be on a very high salary (in excess of £100k) to have any liability for tax this year. National Insurance, however, works differently. You have to pay that for any week where you earn more than £149 so it is not surprising you have to pay some NI.

I wouldn't bother putting aside anything for tax. Since you have only started working this month it is very unlikely you will have to pay any tax for the 2013/14 tax year.

Brilliant :) Thanks so much everyone. I feel much more sorted now.

Unless you earnt 9k this month, you won't be paying tax this year, and it will kick in next month when they will take tax off if you earn above £830 ish a month.