Backdated pay pushing salary into top bracket - are we being overtaxed?

[OTheMarriedManatee]

DH recently got a pay rise, backdated to the beginning of the year. That lump sum pushed his salary for one month into what looked like the 50% rate of tax. HMRC then adjusted his tax code, with the result that he's now being taxed 50% on everything, even though he doesn't usually earn anywhere near enough to be in the 50% bracket.

Is there anything we can do to query/get this corrected? It's taken a massive hit out of our income that doesn't seem justified at all.

Are you saying that HMRC have issued him with the D1 tax code? If so that is almost certainly wrong and you should call the number on the coding notice to get it corrected.

Otherwise it should correct itself in the coming months: tax is normally worked out on a cumulative basis since the begininng of April, so if the back pay has taken him over £62,500 in August tax will be calculated at 50% on anything over that, but in September only earnings over £75,000 will be taxed at 50%.

Hi MrAnchovy

Thanks - this is really useful. AFAIK he hasn't received a new tax code so hopefully it will work out as you say. I guess we'll see come the end of September - fingers crossed!