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Not paying income tax

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tbates2614 | 02:43 Fri 10th Aug 2007 | Personal Finance
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My wife has just started her 1st job in england, she has a tax code of 522 - however she is not paying any income tax. When I phoned her agency about this they said its because she started work after April.

Can anyone explain this to me?
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With a tax code of 522, she can earn �5220 in the year April 07 to March 08 before she starts paying any tax. Under the way PAYE operates, employers tax tables provided to them by HMRC calculate this annual amount as a monthly (or weekly, if one is paid weekly) amount. For your wife this is 5220/12 per month or �435 pm. But because she has only just started work, she is able to earn the 'non taxable'amounts for April, May, June and July before the tax tables kick in (4 x �435) or �1740 by the end of July. This is why no tax has been assessed to date. It will sort itself out in August's pay packet.

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Not paying income tax

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