Emergency Tax Question

[GillsMan]

Hi,

I started my current contract (which is my first contracting role) on 17 May this year. As it's my first contract, I decided to use an umbrella company who pay me on a weekly basis (it's Parasol btw).

I didn't have my P45 at the time I started, so filled in a form, selecting option B to specify that this is my only or main source of income. I have since received my P45 but (big mistake) I forgot to send it to my umbrella company. So, I'm on an emergency tax code and am currently paying about 50% tax!!

I'm going to send in my P45 ASAP, but when/how will I get my tax back? I'd really rather not have to wait until the end of the tax year, so does anyone know what the solution is?

Cheers!

(PS - apologies if this should be in Accounting/Legal forum - feel free to move it if it should. Ta).

[Zippy]

I dont think Parasol will give you the tax back, so contact your tax office or the HMRC helpline and ask them.

[Scrag Meister]

I dont think Parasol will give you the tax back, so contact your tax office or the HMRC helpline and ask them.

Surely they'll calc what should have been paid vs what you actually paid and reduce subsequent payments to even out the over payment.

Lets face it, it wont matter until year end really.

[GillsMan]

Surely they'll calc what should have been paid vs what you actually paid and reduce subsequent payments to even out the over payment.

Lets face it, it wont matter until year end really.

Why's that? One thing I've never gotten to grips with is tax. I've no idea what (if anything) I can claim back, and I'm just a bit (a lot) hopeless in this area really. Quite shameful tbh.

[VectraMan]

I went through much the same thing when I started (with Parasol too). I had to wait until after doing a tax return, but did the return ASAP in April and got the refund about June.

[GillsMan]

Sweet, thanks for that all. It'd be nice to get it back sooner, but it's not the end of the world to get it all in one lump sum.

[northernladuk]

Why's that? One thing I've never gotten to grips with is tax. I've no idea what (if anything) I can claim back, and I'm just a bit (a lot) hopeless in this area really. Quite shameful tbh.

Does that explain your reason for posting this in the business section and not the accountancy?

[LisaContractorUmbrella]

If you ticked box B you will have been allocated a week 1 or month 1 tax code which should not result in you having to pay 50% tax. The only difference between this and a standard code is that it is non-cummulative - if you work each week/month without a break from the start of the tax year it will make absolutely no difference to the tax that you pay. Can you confirm the code that has been used on your payslip?

[lje]

You should be fine. As long as Parasol get your P45 and change your tax code the new calculation will look at what you should have paid so far given your new tax code and will only charge you tax when you owe something. So if in the first month you've paid more tax than you should have in this tax year for your new tax code then you won't be charged any tax that month. It'll all come out in the wash.

If you find that you are still paying the emergency tax then Parasol need to be reminded to change your tax code.