Tax query! 40% tax, but won't earn over threshold in year...

[TheDetective]

I've had a google, but can't find a definitive answer, and although I will ring the tax office on Monday, I wondered if anyone could answer my query!

I am going to be going on matenity leave in October. I have annual leave to use before maternity leave. I will be working extra shifts during the annual leave. My usual monthly pay before tax is £2800. I will be earning an extra £1800 before tax by doing these extra shifts. My monthly pay will therefore be £4600, but obviously this will attract 40% tax over roughly the first £3500. I won't earn over the threshold this year, so how do I get the money back I will have overpaid? And will it definitely deduct the 40% because it is PAYE?

I can't really afford to wait til April to get it back. I'm doing the extra shifts to have the money for my maternity leave!

TIA!

You will get taxed at 40%, but it should even out over the next few months once your pay isn't so high.

You can contact HMRC for the extra tax to be repaid. Here is a link to the relevant part of the HMRC website

You might be better off if you ask for a new tax code though, because I'm pretty sure the repayment won't get processed until after the end of the tax year. Do contact HMRC and see what they suggest.

If you are getting SMP you won't need to do anything, the tax refund will come through your payslip unless for some unusual reason your tax code is non-cumulative, normally indicated on your payslip by an X, M1 or W1 after the code (eg 810L M1).

It just came back as part of PAYE for me. Rather nice when my income had just fallen to SMP as it bumped it up quite a bit for the first couple of months.

I am also interested in this, as I will have a lump sum of holiday paid that will take me over the 40% bracket in the month - very similar to yourself actually.

My research has led me to believe that, actually, if you are on a standard 810L tax code, and have been earning approx 2,800 each month since April, you will have enough in your cumulative 20% allowance left not to pay at 40% - the lump sum will still fall under your 34k allowance cumulatively.

Very willing for someone to tell me otherwise, but this conculsion is a combination of HMRC and long periods of being on hold to the tax office - could well be incorrect!!

Aparrently you will pay more NI because your £147 ish is done on a weekly basis, so there is no way of getting out of that one and you won't get refund.

In summary - tax is dull - I wish I knew someone in Accounting!