tax refund advice

[mariano]

Hi, I'm new to this forum so first I will say hi to everyone!

This year I was contracting with parasol as an umbrella company. My last contract ended up on August 15th and I resigned parasol on the 21th. After that I decided to take some free time, maybe until next year. I just heard from a friend that I might be due to a tax refund from HMRC by filling the P50 form.

So I started checking my payslips between April-August and I can see I've been paying employee NI (A), PAYE income tax (B) and employment costs (C). I saw that P45 has a total taxes to date field which appears to be the sum of all the (A)+(B) since April. So what happens with (C)? why is not part of the P45 total tax sum to date?

I also have another doubt, when is the best time to claim this taxes back? Should I do this only one time during this unemployed period? how is it going to be calculated?

If I send a P50 form does the HMRC assume that I will stop working until next tax year? in that case I might be switched to a lower tax band meaning a considerable refund Am I right?

Thanks!

[Jessica@WhiteFieldTax]

The employment costs are not on the P45 as they are something between you and your employer (the umbrella), they are not part of the HMRC tax system,

Simplifying complex things considerably, the NI shouldn't be on the P45 either, as although its deducted and paid to HMRC it's under a different regieme. The circumstances for getting NI refunds are very limited and obtuse.

All that should be on the P45 is the Tax to date, and if you don't intend to work again this tax year then, yes, you should be able to get a refund through P50. Tax is calculated on an annualised basis so you will have the benefit of the full years lower tax bands.

I would caution against using the P50 if you are likely to have other income between now and 5 April.

I would have thought that your former umbrella should be able to assist with this.