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Muhammad Haider
Muhammad Haider,
Category: Tax
Satisfied Customers: 812
Experience:  Director at HM Accountax
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Its with regards to Tax code OT/0, no, My tax code has just

Customer Question

Its with regards ***** ***** code OT/0
JA: Have you talked to a tax professional about this?
Customer: no
JA: Is there anything else the Accountant should know before I connect you? Rest assured that they'll be able to help you.
Customer: My tax code has just changed from S638T/0 to SOT/O i know this is because of my earnings i am no longer eligable for a tax free allowance. My query is my first wage for this month in the new tax year was paid today. Total payment was £25,023.26: i have been taxed: £10,343.06. so my YTD taxable pay is £24,997.26 : tax paid: £10,343.06. Regardless of what i earn for the year i thought the first £1 to £37,700 is charged at a rate of 20% i have been charged more than double that on this payment, my employer says i was charged: Firstly you have been taxed on 24922.27+50.58(Medical)+50.41 (fuel) = 25023.26
The first 3141.67 is @ 20% then 9358.25 @ 40% and 12523.34 @ 45%. 0T/0 tax code isn't 20% only it is deduction according to the tax bands
is this correct,
JA: Which tax year is the deduction for?
Customer: the new tax year: 2021/2022
Submitted: 11 days ago.
Category: Tax
Expert:  Muhammad Haider replied 11 days ago.

Hi,

I am an advisor at JA and happy to assist you.

In Payroll, they split your basic rate band over the year and you start getting taxed at higher rate from Month 1.

Regards

Muhammad

Customer: replied 11 days ago.
Hi Muhammad so you are saying i will be taxed at 20% on my basic salary but the higher rate on any commission. as this is the start of the new tax year i thought i get the lower rate of tax up to the first 37k this is what is confusing me. so you think what i have paid is correct before i contact HRMC ?
Expert:  Muhammad Haider replied 11 days ago.

Yes, you have paid the right tax. you can recheck here:

UK Salary Tax Calculator 2021 / 2022: Calculate my take home pay (listentotaxman.com)

Customer: replied 11 days ago.
as i live in scotland but work for a UK company based in england does my tax rate differ. thanks
Expert:  Muhammad Haider replied 11 days ago.

Yes, they'll be using your Scottish tax code

Customer: replied 11 days ago.
thanks. i still dont understand why i have been charged 40% tax on my full salary when i have only earned 25K year to date thats the bit that puzzles me but will call HRMC on monday. thanks
Expert:  Muhammad Haider replied 11 days ago.

In payroll, they divide your total basic rate band over 12 months which is £3,333 per month. If you get salary above £3,333, it will be taxed at 40%