Claiming tax back (this probably applys to you to!)

[cqueen]

I had a brain surge this morning and realised I'm owed a lot of money by the tax man. When I told the GF she realised she was also owed quite a bit. The chances are, you're probably owed too.

So heres my example and how I worked it out. A couple of years ago I was working for a company earning £12k/year before tax, thats £1k/month.

Of that 1000/month, 200 of it was tax & NI.

Now here's the important bit, you don't pay any tax on your first £5k earnings of the year. BUT to stop you having unexpect tax on your pay slip after £5k, they spread the cost of your expected total tax bill over the whole year.

So, I only worked at this company for 8 months, and so earn £8k. however I should have only paid tax on 3 of the months, not 8 (because of the £5k = 5 months tax free).

So, in theory, say £150 of the £200 I paid out/month was tax, that means I'm owed 5 x £150 = £750.

But also I realised Tax & NI should work out about 22% of your income.

So from this Ive realised they are again taxing me on the basis of £12k/year and not taken into account the 5k tax allowence.
So they should be taxing me 22% of £8k/year not £12k.

which works out I was paying an extra £54/month (for the full 8 months).

so, £54 x 8 = £432

Total owed to me: £750 + £432 = £1182.

Not bad for a mornings work

Here's a question for you lot, If I was unemployed for 2 months (but didnt bother to claim). Could I claim those 2 months unemployment benefit back? (hey I dont want any moaning about claiming unemployment, I pay NI just like everyone else and thats whats its for!).

Thanks.

[cqueen]

Oh and to claim this back, apparently I need to get the employer to send them the p60.

Why they didnt do this anyway I don't know. I would have thought it just happens automatically. Just goes to show that if you don't look into these things, they get away with it!

[Arfdog]

Congratulations Queen.

There is nothing more satisfying than making the taxbastid pay up.

Well, not many things anyway...
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I'm a lover, not a fighter.

[instigator]

[cqueen]

[Ninja]

you'll only get a differential and amount to claim back in the following scenarios:-


1) you weren't in work for the enitre tax year
2) you're on 'emergency' or BR tax code at the end of the tax year
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James
4 wheels transport the Body ... 2 wheels transport the SOUL

[Itchy]

your assumptions are wrong , you don't pay 22% tax you pay 33% , remember 11% NI for anything above the 5035Personal allowance ,

the important thing is to every month check your pay slip , and ensure there isn't BR or M1 on it , if there is either give the IR a call ,

income tax is unimportant it is refundable , NI isn't , it is non refundable on PAYE for self employed who accidentally pay way over the odds it is kinda,

just phone them up provide a P45/P60 and it should take 9-36 months to get your refund back , just to provide some perspective 2 K owed to me from last year took 7 months.

this guy who is my client they held on to his refund since 2001 (it was over 200K).
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Spain 2008France 2007Big one 2009 We all die. The goal isn't to live forever, the goal is to create something that will. In the end, your life will flash before your eyes. Make sure it is worth watching.

[Itchy]

your calcs are wrong too

12K b4 tax =

5035PA
2150 10% band = 215
4815 22% band = 1059.3

=1274.30 Income tax
=331.52 NI

(X1.5 for NI) -£10 (a week mainly because my calculation cheats) = your tax lib.
____________________
Spain 2008France 2007Big one 2009 We all die. The goal isn't to live forever, the goal is to create something that will. In the end, your life will flash before your eyes. Make sure it is worth watching.

[cqueen]

I odnt really understand much of that, how much do they owe me do you think?

[Itchy]

how much were you paid (gross) and how much tax did you pay?
____________________
Spain 2008France 2007Big one 2009 We all die. The goal isn't to live forever, the goal is to create something that will. In the end, your life will flash before your eyes. Make sure it is worth watching.

[Arfdog]

Queenie,

Normally you would write to the TaxBastardOverlords, and send them a copy of your calculations, as well as a letter telling them that you have calculated that they owe you money, and request them to have a look at the accompanying calculations.

They then do their own calculations, and write back to you telling you how or why you aren't getting even a pence back from them.

Thats the way it usually works, i believe.
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I'm a lover, not a fighter.

[Itchy]

for 12000 gross salary your take home pay should be er

208 a weekish

thats IF you got the full 12000

if you missed two months ie 10K

£180 / week ish as said I use an auto NI thing
____________________
Spain 2008France 2007Big one 2009 We all die. The goal isn't to live forever, the goal is to create something that will. In the end, your life will flash before your eyes. Make sure it is worth watching.

[cqueen]

I did 8 months of £1000/month.

Each month £200 was taken for tax & NI

[Itchy]

8000 for 05/06 ?

feg it I'm fast

8000
4895PA
3105 taxable
2090 10% = 206
1015 = 22%

short cut = 33% for NI purposes


334.95+209

8000/yr = 7456.05 take home pay if done correctly

you had 200month of which 1/3 = NI (not really true but its quicker) 133 back each working month about

1066.66 vs 500 = £500 refund backish
____________________
Spain 2008France 2007Big one 2009 We all die. The goal isn't to live forever, the goal is to create something that will. In the end, your life will flash before your eyes. Make sure it is worth watching.

[cqueen]

Ah ok, not quiet what I expected, but still £500 which I didnt know about!

[Itchy]

phone them up and ask for it back using a FAX machine to send in P60s to your local tax office ,

the IR is clogged up to hell (me and my month of tax returns) and will take months ,

telephone calls / faxes shorter time ,

address letters to the tax inspector you are dealing with over the phone = faster, as said my £500 is only an estimate they will give you a calculation if you ask.

I can't use the company computer systems to work it out exactly for you nor would I
____________________
Spain 2008France 2007Big one 2009 We all die. The goal isn't to live forever, the goal is to create something that will. In the end, your life will flash before your eyes. Make sure it is worth watching.

[cqueen]

When I phoned them they said I need to get my said employer to send them a p60.
So I phoned the said employer but the accountant isnt back till monday.

[yambabe]

[cqueen]

[cqueen]

So if I dont need to get a p60 from my employer, what should I do?

[yambabe]

In your case, as you were self-employed at the end of the tax year (are you still) it's not complicated at all. You fill the form in, send it to the taxman, (you can do this online now, very easy) and he sends you a cheque or credits your bank account.

You can do this any time after the 5th of April, the deadline if you want them to work all the numbers out for you is to get the form in by the end of next week (30th Sept) but if you prefer to work it out yourself yu have til 31st Jan to do it.

You might even get more back than you thought, because you will have set-up costs for your business even if you didn't earn anything no? And they should be deductible against your profit/income for the year. Have you got a book-keeper or accountant? Sounds like you need one........
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Sod falling in love, I wanna fall in chocolate.

[yambabe]

In fact, have you even registered as self-employed? Are you paying Class2 NI?
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Sod falling in love, I wanna fall in chocolate.

[yambabe]

[cqueen]

Business is no longer running (I got offered a good job elsewhere). I was registerd as self employed and I have just sent off my tax return.

[yambabe]

You don't need to do anything else then. Have you calculated from your return how much you are owed? As the Taxman has until 31st Jan to tell you, but if you've worked it out yourself you should be able to hurry them along a bit.
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Sod falling in love, I wanna fall in chocolate.