Does anyone know anything about tax?

[KathH]

DD started an apprenticeship at #100 per week (sorry pound sign not working!). Giving obviously a salary of #5200 per year. I had assumed that she wouldnt pay tax as under the personal allowance. She's received her first wage slip today and has been paid for 2.57 weeks which is right as she's only in her third week but has been stopped #50 odd pounds in tax. Is this cause she's on an emergency tax code or something or does she need to get in touch with HMRC. Am not sure whether I've understood properly and dont want to make a total tit of myself (or rather her) if she queries it. Thanks in advance.

On the wage slip there should be a tax code. If it is the "normal" one it will be something like 640L (can't remember what the tax allowance is at the moment but it will be the first three digits of whatever the allowance is).

If it says BR then this is basic rate and your DD would be being taxed at 20% on everything she earns. Has she had another job before? If so she would need to give her P46 form as otherwise it is assumed this is another job and so she would be taxed at the basic rate on top of it. Even if you start a first job then you can still be taxed at basic rate at first which is a pain.

There should be a tax office address on the payslip that you can get in touch with to check on the tax code. Don't worry as the money will come back, it can just take a bit of time .

From the figures you have given it does sound as if she has been taxed at basic rate on all her earnings.

Hi - thanks for the quick reply. This is her first job. On the wage slip it does indeed say Tax code BR.

If you get in touch with the tax office, she will get issued with a normal tax code and then will get the tax back in a future payslip.

Is annoying at the beginning of a job though.

When you don't have a P45 from a previous job, and HMRC haven't told the employer otherwise they have to operate a BR code. Once her P46 has been processed by HMRC (she should've filled one out when she started her employment) she will be issued with the correct tax code. Once this has happend she will be refunded any tax she has paid.

This is not the case with National Insurance but if she's only earning £100 a week she won't pay NI anyway.

That's not exactly true Eddas. The employer should only operate the BR tax code if the new employee (without a P45) ticks the box that says "I have another job or receive a state or
occupational pension." or doesn't tick a box at all.

In the circumstances, this employee would probably have ticked box A or B, both of which lead to a 647L code.

What has probably happened is one of:

• The employee hasn't been given a P46
• The employee hasn't returned the P46
• The P46 hasn't found its way to the payroll department
• The payroll department haven't looked at the P46 properly

You can sort this out by following through those possibilities until it is fixed - you don't have to wait for HMRC to act (which might be a long wait in the current circumstances) while being out of pocket (albeit temporarily) for £20 a week.

of course you're right MrA. Please ignore my post and refer to MrA's.

My NI point was right though

mra is right - but unfortunately a lot of small employers get this wrong and a lot of new employees pay a lot of tax up front at exactly the time they need the money.

Form P46 gives clear instructions to the employer about what tax code to use depending on which box is ticked.

Not just small employers DHOA, in my experience some large employers simply don't bother to do this properly.

I guess they don't care as long as it is not them who are losing 20% of their pay for no good reason

Thanks all - its actually quite a large employer! Its just a pain when she's only earning 100 pounds a week to be losing 20% of it! I appreciate that she'll get it back, will get her to speak to the Payroll Dept. I suppose at least its saved some money for her and she cant spend it on tat!