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TonyTax
TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15713
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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I am enquiring about what my tax code would be for someone

Customer Question

I am enquiring about what my tax code would be for someone returning to work after a period of time not earning.. my salary is £4,000 per month.. £48k per year. I need to understand what my tax code would be until I reach the threshold and after that what would the tax code change to?

Seonaid
Submitted: 2 years ago.
Category: Tax
Expert:  TonyTax replied 2 years ago.
Hi.

Can you tell me what your date of birth is and confirm that, prior to starting your current job, you had not worked since before 6 April 2014. Have you received any jobseekers allowance or other state benefit in the current tax year. 2014/15?
Customer: replied 2 years ago.

My DOB is 13-02-1961


I did not receive any jobseekers allowance or state benefit.


I also am trying to work out what my monthly salary would be for the first three months because it is then I reach the threshold.


 


 


 

Expert:  TonyTax replied 2 years ago.
Thanks.

What was the start date for your new job?
Customer: replied 2 years ago.

02-06-14

Expert:  TonyTax replied 2 years ago.
Thanks.

Leave this with me while I do some calculations and draft my answer.
Customer: replied 2 years ago.

thank you


 

Expert:  TonyTax replied 2 years ago.
Hi again.

Assuming that you are on a tax code of 1000L (personal allowance £10,000) and it does not have W1 or M1 at the end (1000L W1 or M1), then your pay, tax and national insurance details for the rest of the 2014/15 tax year should be as follows:

June 2014 Gross £4,000 Tax £299 NIC £349 Net £3,352

July 2014 to March 2015 inclusive Gross £4,000 Tax £633 NIC £349 Net £3,018

If your tax code has W1 or M1 at the end, call the tax office on the number here and ask them to change it 1000L Cumulative. This will ensure that you are given credit for the personal allowance for April and May 2014 now instead of waiting until the end of the tax year..

I hope this helps but let me know if you have any further questions.
Expert:  TonyTax replied 2 years ago.
The HMRC contact telephone number is here.
Expert:  TonyTax replied 2 years ago.
The tax code should not change unless it is incorrect. Yours should be 1000L for the whole tax year.

As you did not work for the first two months of the tax year, you should have paid less tax in June than you will pay in each of the other months. Your earnings are at a level at which your June salary absorbed the unused personal allowances for April 2014 and May 2014 as well as that for June 2014 itself. After that, you should pay the same tax each month.
Customer: replied 2 years ago.

what happens if I have directors loans to the company can I set against the
tax on a monthly basis or do I have to wait till the year end?

Expert:  TonyTax replied 2 years ago.
Can you explain what you mean by setting directors loans against the tax? Do you owe the company money or does the company owe you money?
Customer: replied 2 years ago.

Sorry I saw this late yesterday.. the company owes me money as I set up this company and it was self funded.. obviously over time we will get this back in repayment of director loans..


 


I have also been advised as a director in a company my national insurance is likely to be held back to later on due to benefits etc.. therefore what will this look like for my actual salary now?

Expert:  TonyTax replied 2 years ago.

Thanks.

If you borrowed the money to lend to the company you may be entitled to tax relief for the interest you pay to the lender which can be claimed through your tax code. You can read about the criteria for claiming business loan interest tax relief here.

There are two ways to work out director's NIC. The first is as follows:

June 2014 to February 2015 NIC £349.34 per month

March 2015 £NIC £390.60

The second method which is specifically for directors, is as follows:

June 2014 NIC £0

July 2014 NIC £152.16

August 2014 to January 2015 NIC £480.00 per month

February 2015 NIC £422.50

March 2015 NIC £80.00

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