Are the first &4000/year non-taxable?

Question

I started working in the UK in oct 2007 on a salary of 25k. I heard something like the first £4000 are non/taxable, yet i had tax and NI deducted from my pay all this time at the same rate. Am i entitled for a tax rebate?

Answer 1

This year the first £5,435 of total income is free of tax (when you started work it was £5,225), but the PAYE tax deduction system works by giving you a twelfth of this each month (or a 52nd each week), then charges tax on the balance.  In most cases this works out right by the end of the year on 5 April (if you're still working then).

Your employer should have given you a "Certificate P60" showing your pay and tax up to 5 April 2008.  If the box showing a "Final tax code" just says 522L, you have almost certainly paid the right amount of tax.  If there are any other letters in that box, or a number lower than 522, ask the tax office to review your position.

Answer 2

When you say you started working in the UK in Oct 2007, does that mean you came here from abroad? If so, have you completed form P86, and sent to tax office to establish your residency status?

If you mentioned it to clarify what country you are asking about, what were you doing from the previous 6th April, when the tax year started? Then I would suggest completing form P91, as it appears you may have an unused backlog of tax allowance.

In either case, you should send form P60 with relevant form to tax office, and ask staff to review for repayment.

You can download forms mentioned from HMRC website, as hmrc/p86, or hmrc/p91.

Normally people have a tax allowance of £5435 currently, and £5225 for last year, but if you have come from abroad, that may be affected by your residency status, your country of origin, and how long you will be in the UK.

Answer 3

Every one has what is known as a personal allowance and I believe that £4K sounds about right. You are earning £25K so you will only be taxed on £21K of your earnings.

You are charged 10% tax on the first £2230 of this and the charge is 22% on the rest. In addition is national insurance payments. The payments are annotated over a years so you will pay tax every month from the day you started. So no rebate I'me afraid.

Answer 4

If I remeber correctly its alittle more than that (6k) but don't quote me. I'm guessing your not self employed.

You can ask for a tax refund at the end of each year if you paid too much. Go talk to your local HM Revenue.

Good luck!