Bonus payment-who will do the tax?
Discussion
Its 4 months since I left my last job (3 months gardening leave and 1 month in my new job) and just had confirmation that I will be receiving my bonus from my last job, via cheque (while you work for them the bonus gets paid via payroll direct in to your bank.
Will they "guess" at the tax due and send the cheque "nett" or will they just send the gross amount and I will have to notify HMRC?
Thanks
Will they "guess" at the tax due and send the cheque "nett" or will they just send the gross amount and I will have to notify HMRC?
Thanks
Employers (including ex employers) have the FIRST responsibility to correctly calculate and deduct PAYE and NI from payments due to employees or ex-employees. However, if they fail to do this, then the responsibility will pass to the employee (or ex-employee).
So, if I were you I would be checking the calculations and the payslip they give to you to ensure that the tax and NI is calculated correctly, If it isn't, then you will need to self-declare the income to HMRC.
So, if I were you I would be checking the calculations and the payslip they give to you to ensure that the tax and NI is calculated correctly, If it isn't, then you will need to self-declare the income to HMRC.
Post P45 payments must now have a 0T code applied which means the tax is collected at your marginal rate of tax. Assuming you are a 40% tax payer this means the tax deducted should just be a flat 40% of the gross bonus.
For NIC purposes the ex employer should calculate the NIC due using the weekly rates. NIC is a little more difficult to calculate but it is not down to you to ensure this is accurate. The ex employer must ensure it is correct.
As Eric says, the final tax liability is down to you and if you believe you have not paid enough tax then you should file a self assessment return.
For NIC purposes the ex employer should calculate the NIC due using the weekly rates. NIC is a little more difficult to calculate but it is not down to you to ensure this is accurate. The ex employer must ensure it is correct.
As Eric says, the final tax liability is down to you and if you believe you have not paid enough tax then you should file a self assessment return.
LC23 said:
Post P45 payments must now have a 0T code applied which means the tax is collected at your marginal rate of tax. Assuming you are a 40% tax payer this means the tax deducted should just be a flat 40% of the gross bonus.
For NIC purposes the ex employer should calculate the NIC due using the weekly rates. NIC is a little more difficult to calculate but it is not down to you to ensure this is accurate. The ex employer must ensure it is correct.
As Eric says, the final tax liability is down to you and if you believe you have not paid enough tax then you should file a self assessment return.
It will be 0T and NI weekly, but 0T will have the first £2800 or so at 20%, then 40% (assuming it's a monthly payroll).For NIC purposes the ex employer should calculate the NIC due using the weekly rates. NIC is a little more difficult to calculate but it is not down to you to ensure this is accurate. The ex employer must ensure it is correct.
As Eric says, the final tax liability is down to you and if you believe you have not paid enough tax then you should file a self assessment return.
Depending on how much you earn and how much the bonus is this may or may not be correct - it could be too much or too little tax. You won't necessarily need to do a tax return, the employer paying the bonus should notify HMRC of the payment who will then be able to correct any under/overpayment of tax adjusting your tax code. If you haven't heard from HMRC in a couple of months give them a call.
If the bonus is less than a couple of grand and you earn less than £35k or so then don't worry about it, everything due to be taxed will have been taxed at 20%.
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