Tax question

[wahwahwah]

I am about to start a new job. I haven't worked for about 5 years and have no idea where my P45 is (they have said that they won't need it).

I vaguely remember someone telling me that the first months' pay will be tax free as I am starting partway through the tax year and to take into consideration my allowances.

Is this right - yippee if it is!

depends on how much you are earning, basically the tax free alowance and basic rate band are divided by 12 and applied to your monthly salary iirc. Don't need a P45 just a new starter (P46a?) form.

They will give you a P46 to fill in and provided i'ts your only job this tax year your money will be tax free until you reach the personal allowance, depends how much you earn as to how many months that will take. So I would expect you won't pay tax for a month or two.

They'll stick you on tax code BR which is basic rate and tax you at 20% on everything.

When you P46 have been processed your tax code will be sent to your employer telling them what your allowance is.

As you've already been paid but over paid on tax you'll get a refund of the tax. Either as a refund into your pay packet or a month of not much tax being taken.

seeyouokay - that is not correct.

The P46 includes instructions to the employer on what tax code to use depending on whether statement A, B or C is ticked. Code BR would only be used if the OP has another job or pension to which thweir personal tax allowance is being applied.

If the OP has no other job or pension, the normal tax code of 647L (for the current tax year) should automatically be applied.

The company then sends off the P46 details including details of tax code used to HMRC. They will only send out a notice of coding to the company if the tax code they have used is wrong for your circumstances (may change the code if you have unpaid tax from previous years to pay for whatever reason.

Therefore you should receive one twelfth of your personal allowance against your income for each month which has elapsed in the tax year. Depending on what you earn, this may result in you paying no tax in the first month as you have accumulated several months worth of tax allowance since the beginning of April to set against your first month's salary.

Hope that makes sense, a bit complicated!

Will second what Hippo says. If a new employee hasn't had any income since April then there is half a years tax allowance against new income around £3200 to accumulate.

But your new employer may put you on "Month one" for the first month. Which may mean that you do pay tax on the first salary payment. But contact the Inland Revenue HMRC as soon as you know which tax office which your employer is attached to.

You will only go on month one if you tick box B which says this is my only job but I have had another job or been on jobseekers allowance (taxable) etc since April.