Dean Winchester Posted July 29, 2008 Share Posted July 29, 2008 So got my wage slip today and got slapped silly with tax as I was kind of expecting due to alot of backpay I received. So I have my normal national insurance coming off and the amount of tax I'd kind of expect to pay on the amount I had received but then I have another amount in my deductions entitled Recovery.... What exactly is this for? Is it something to do with me being paid a lot more than I usually get paid? Link to comment Share on other sites More sharing options...
I P Knightley Posted July 29, 2008 Share Posted July 29, 2008 So got my wage slip today and got slapped silly with tax as I was kind of expecting due to alot of backpay I received. So I have my normal national insurance coming off and the amount of tax I'd kind of expect to pay on the amount I had received but then I have another amount in my deductions entitled Recovery.... What exactly is this for? Is it something to do with me being paid a lot more than I usually get paid? Sounds like it. If you got a whole bunch of back pay in a previous payslip and tax wasn't deducted, then you're just getting taxed now. Means you've had that tax money for a month for free. The phrase "Recovery" is probably one created by your HR/Payroll people. If the above doesn't make sense, give them a call and hope that they have a clue! Link to comment Share on other sites More sharing options...
Toggie88 Posted July 29, 2008 Share Posted July 29, 2008 It sounds like you've been under taxed previously. Phone then up and say you've been over taxed and see what they have to say. I've got a mate who does admin in the call centre and he said the folk that answer the phones are clueless. He told me anyone could call up and they would give them cash. Says it's a complete joke... Link to comment Share on other sites More sharing options...
Dean Winchester Posted July 29, 2008 Author Share Posted July 29, 2008 Unfortunately I wasnt lucky enough to be able to receive anything just now but due to me starting University in September and the sharp drop in income she reckons I've practically paid of my Tax for the year so any tax I pay from September until April when am working part-time will be reclaimable by me. And the recovery was apparently the tax I would've paid on the backpay. Dunno why I didn't realise that Roll on april Link to comment Share on other sites More sharing options...
I P Knightley Posted July 29, 2008 Share Posted July 29, 2008 Unfortunately I wasnt lucky enough to be able to receive anything just now but due to me starting University in September and the sharp drop in income she reckons I've practically paid of my Tax for the year so any tax I pay from September until April when am working part-time will be reclaimable by me. And the recovery was apparently the tax I would've paid on the backpay. Dunno why I didn't realise that Roll on april It's a while since I did any payroll work but I think the system is that your annual allowance (the amount you can earn without being taxed) is divided by 12. rounding for simplicity: You're allowed to earn ?6000 in a year without being taxed. HMRC assume you're working for 12 months and so you're allowed ?500 per month. If you work only one month for an entire year but earn ?2000 in that month, you should have no tax to pay. HMRC, though, will work out that you've earned ?1500 that should be taxed and will tax that at 10% and 22%. When you get to the end of the tax year, you tell HMRC that you've only earned ?2k & therefore reclaim the tax. A whole load of hassle - they should allow the first ?6000 earned chronologically to be tax free and then tax everything after. They're not exactly going to run out of money in April, are they... Link to comment Share on other sites More sharing options...
70's Throwback Posted July 29, 2008 Share Posted July 29, 2008 So got my wage slip today and got slapped silly with tax as I was kind of expecting due to alot of backpay I received. So I have my normal national insurance coming off and the amount of tax I'd kind of expect to pay on the amount I had received but then I have another amount in my deductions entitled Recovery.... What exactly is this for? Is it something to do with me being paid a lot more than I usually get paid? Have you considered contacting your HR payroll dept? Link to comment Share on other sites More sharing options...
blairdin Posted July 29, 2008 Share Posted July 29, 2008 It's a while since I did any payroll work but I think the system is that your annual allowance (the amount you can earn without being taxed) is divided by 12. rounding for simplicity: You're allowed to earn ?6000 in a year without being taxed. HMRC assume you're working for 12 months and so you're allowed ?500 per month. If you work only one month for an entire year but earn ?2000 in that month, you should have no tax to pay. HMRC, though, will work out that you've earned ?1500 that should be taxed and will tax that at 10% and 22%. When you get to the end of the tax year, you tell HMRC that you've only earned ?2k & therefore reclaim the tax. A whole load of hassle - they should allow the first ?6000 earned chronologically to be tax free and then tax everything after. They're not exactly going to run out of money in April, are they... That's basically it - it is because most of us pay PAYE income tax on a cumulative basis. Essentially, the IR assume you will receove your annual income evenly throughout the year and so our tax code dictates a running total of how much tax free earnings we should have received by each month of the fiscal year - you are taxed on anything over this running total and any tax already paid in the year to date is deducted. So when you receive back pay like you, you will pay far more tax that month, but should find that you pay less on your nomal earnings tax in subsequent months until the end of the tax year. If you have a cumulative tax code, you may even find there comes a point where a refund will automatically be generated by the PAYE system. If you (HMFC_Riley) are not going to have a taxable PAYE income when you start uni, I think it is your responsibility to contact the IR next March and ask them to check the amount of tax you have paid against your earnings. Link to comment Share on other sites More sharing options...
blairdin Posted July 29, 2008 Share Posted July 29, 2008 Forgot to say - the "recovery" bit on your back pay will will probably be the IR recovering any income tax from earnings prior to the current tax year (i.e any backpay in respect of salary due before 6 April 2008). This is not paid on a cumulative basis, as the cumulative tax year has ended, so any backpay will have to be added to your earnings for that year and tax re-calc'd accordingly. Hope that makes sense. Link to comment Share on other sites More sharing options...
Gambo Posted July 29, 2008 Share Posted July 29, 2008 "Tax.... I dont get it"? None of us do, it all goes to the government. Link to comment Share on other sites More sharing options...
Cobblers Posted July 29, 2008 Share Posted July 29, 2008 "Tax.... I dont get it"? None of us do, it all goes to the government. Unless you're self employed with a good accountant:rolleyes: Link to comment Share on other sites More sharing options...
Doyle Posted July 29, 2008 Share Posted July 29, 2008 "Tax.... I dont get it"? None of us do, it all goes to the government. Just thought I would let you know. I get your tax. Im a student, and work for the government Link to comment Share on other sites More sharing options...
The Old Tolbooth Posted July 29, 2008 Share Posted July 29, 2008 Unless you're self employed with a good accountant:rolleyes: Now there's a man who sings from my song sheet Link to comment Share on other sites More sharing options...
brownkg Posted July 29, 2008 Share Posted July 29, 2008 Unless you're self employed with a good accountant:rolleyes: "good" of course in accountant speak is an antinym............ Of course a Good lawer would argue otherwise:confused: Link to comment Share on other sites More sharing options...
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