Paying tax on first employment

[jagracer]

My daughter started work in late July and has just had her first pay slip and she says she's paid no tax, only NI. Her annual salary is somewhere around £35K and her code should be the normal 700l or whatever it is now. I thought tax was deducted from day one not once you go over the £7000 earnings limit. She hasn't had a job for a few years and even then they were only part time and she didn't earn much more than £40 or so a week. Does she need to see her payroll dept?

[BigAl77]

This happened me last time I changed jobs...it should sort itself out in the next pay however the tax will get retrospectively calculated and could end up with less money in her hand in the coming months.

Nothing really to worry about.

[spikeyhead]

I'll change the numbers to make the sums easy.

Imagine your code was 5200, so 100 a week

First pay arrives in week 26, so you'd not pay anything if you'd earnt less than £2600, but it then becomes normal tax after that.

Hope that makes sense.

[jagracer]

spikeyhead said:

I'll change the numbers to make the sums easy.

Imagine your code was 5200, so 100 a week

First pay arrives in week 26, so you'd not pay anything if you'd earnt less than £2600, but it then becomes normal tax after that.

Hope that makes sense.

Sort of makes sense but why do I pay tax from week 1 in each new pay year?

[spikeyhead]

jagracer said:

Sort of makes sense but why do I pay tax from week 1 in each new pay year?

Because in week 1 then you're only allowed 1/52 of your tax code before you start paying tax.

If you start working in week 26 then you don't start to pay until you're up to 26/52 of it

[jagracer]

Ah, I see what you mean now. Ta

[mph1977]

how much did she earn from april to the start of her new job ?

[jagracer]

mph1977 said:

how much did she earn from april to the start of her new job ?

Nothing. This is her first job since leaving uni a few weeks before. Her last paid job was around 2009 and that paid peanuts.

[mph1977]

jagracer said:

Nothing. This is her first job since leaving uni a few weeks before. Her last paid job was around 2009 and that paid peanuts.

so she's got April, May and June tax allowance 'saved up' so it's unsuprising she didn't pay tax on July's wages as she'd got one third of her annual tax allowance to got at ...

[Simon Brooks]

Chances are her employers got her sign a revenue declaration that this is her first job in this financial year and as such they have put her straight onto an acculative tax code, personally I would have used a week one coding and waited for revenue to issue tax coding, same result, just a different route

Out of interest what degree did she take and what career path, my daughter is just going into her final year

[jagracer]

She took a medical degree so she's now a very junior doctor. You're correct about the self declaration, I remember her filling it out. What's your daughter doing?

[Simon Brooks]

Pure psychology, has just finished a years placement in a non verbal unit of a special needs school (7-16), she wants to specialise in autism, taking her back to uni this weekend, this will be the first time both of them are at uni at the same time, he is starting his second year

You may find that your daughter will still have a little more free pay to catch up with this month if she didn't hit the limit in her last pay packet, however the bad news is, it should be on track by next month and then should be the same each month, give or take a quid