Starting work mid year - tax

[krytonsheep]

I don't think there should be any reason the umbrella company can't take in to account the fact you haven't worked this year.

With the Payroll software I use (Sage) I would just get you to fill out a P46 (your P45 won't be valid for this tax year), set your tax code to 603L, set your total pay & tax to date to zero... and that's it.

Come your first few pay cheques you'll be paying no/very little tax and then it'll go back to normal (obviously depends on how much you get paid). The payroll software should work this out automatically.

Come the end of the year you'll have paid exactly the right amount of tax for the amount you've earned.

On a side note the tax code relates directly to your personal allowance so 603L =£6030, hence your umbrella won't change this unless they get a different code from HMRC. The P46 has a section for the employer to write down what tax code they've used initially for you, HMRC can then check this and usually reply in a few months time to confirm the code is ok (or adjust you allowance down if you owe tax from a previous year).

[LisaContractorUmbrella]

[QUOTE=Belle;731742]

Any overpaid tax will be refunded by your employer and you shouldn't have to wait till the end of the tax year.QUOTE]

I've spoken with the umbrella and they say they can't adjust my tax code and that all I can do is apply for a refund at the end of the tax year. According to my calcs, I'm will be overpaying tax by around 234.00 a week as there is no way I will hit the higher tax bracket before the end of the tax year . My tax code seems to be based on my yearly gross, which does take me into the higher tax bracket. Would be nice if I did not have to overpay now only to get it back later...enforced savings!

What tax code have the umbrella company used?

[Ardesco]

Will HMRC give you interest on the excess payment?

[Solidec]

Will HMRC give you interest on the excess payment?

[Belle]

[QUOTE=Zippy;727864]Any overpaid tax will be refunded by your employer and you shouldn't have to wait till the end of the tax year.QUOTE]

I've spoken with the umbrella and they say they can't adjust my tax code and that all I can do is apply for a refund at the end of the tax year. According to my calcs, I'm will be overpaying tax by around 234.00 a week as there is no way I will hit the higher tax bracket before the end of the tax year . My tax code seems to be based on my yearly gross, which does take me into the higher tax bracket. Would be nice if I did not have to overpay now only to get it back later...enforced savings!

[xoggoth]

Know nowt about umbrellas but that last certainly sounds like a downside I don't think anyone's mentioned before. The director's method in these circumstances would result in less NI.

[dmini]

NI is on a weekly/monthly basis, for normal employees - so you cant claim back on that. Even if you are only paid for one week in a year, if that week is over the "weekly" allowance, you have to pay NI on it.

If you've got a previous p45 (even an old one) use that with your umbrella.
Worst case is that it wont get sorted before year end and you will complete a SA form and get lots back! Otherwise they should send you a P46 to complete. If they dont, make them!

[Zippy]

Advice needed please. I'm starting a new contract next week (through an umbrella) and have not worked at all in the current tax year. Will I be paying tax and NI based on a "yearly" gross figure? And if so, is there any way my tax and NI contributions can be adjusted accordingly now to save claiming back in April?
Thanks

You are starting work for a new employer (the umbrella) so you will be on emergency tax for a few weeks. Any overpaid tax will be refunded by your employer and you shouldn't have to wait till the end of the tax year.

Good luck in the new contract!

[Belle]

Advice needed please. I'm starting a new contract next week (through an umbrella) and have not worked at all in the current tax year. Will I be paying tax and NI based on a "yearly" gross figure? And if so, is there any way my tax and NI contributions can be adjusted accordingly now to save claiming back in April?
Thanks