To think I shouldn't have been taxed?

[Cashmerecardi1]

Started a new job in June after being Self-employed for a few years. When I filled in my P60 or whatever it is was before I started with my new company, I ticked the box that said 'This is my first job since 6th April.' and basically allocated all of my tax free allowance to this new job.

I was under the impression that the tax free allowance is £12,500. To date, in this job I've earnt £9000. Today is payday and I've been taxed for the first time....is that correct?

I thought that until I'd earnt £12,500 in this new role that I wouldn't be taxed....Am I being really thick?

Sorry yes you’re being a bit dim. The tax allowance is divided over the year, then you use up any unused allowance from being unemployed and then you’re taxed from that point.

Normally they tax on what you are expected to earn over the tax year. So if I earn £30k pa, I pay the same tax in month 1 as I do in month 11. Otherwise people’s take home pay would fluctuate a lot over the year which most salaried people wouldn’t want because they’d need to save A lot for leaner months.

It’s monthly so by April £1041 earnings tax free , May £ 2082 ytd tax free June £3123 etc

Ah okay, that makes sense. Just me being an idiot then! Thanks

From April to November you are entitled to earn £8333 tax free - £12500 / 12 x 8. So if you have earned £9000 then tax is due on the extra £667. Next month you will be able to earn £1041 tax free and be taxed on anything over that. Does that make sense? It's done cumulative so you have been allowed to be tax free for the year until you caught up as you didn't earn in April and May

It does not work on the basis of you earning up to £12570 and then being taxed. The payroll system uses your tax code, which might be 1257L but may be something different and uses that to calculate your total gross pay to date and the Income Tax paid to date.

November is Month8 in payroll terms. So 8/12ths of £12570 is £8380. If your gross pay is over that, then you will pay Income Tax in month 8.

National Insurance is calculated differently and you will have noticed that being on your payslips quite a bit earlier... I think it is paid in any month where your gross pay is over £520.

Have a look at your payslip and see if it shows Gross Pay To Date and Income Tax Paid To Date, or entries with similar wording.