Too Much Tax Paid?

[Greysmad]

Other half left his work last month. He had overtime due to him which he had to wait for until this month’s pay. Top line for the overtime was £279.81 and they’ve taken £55.80 tax off that (plus NI). Does the tax seem a lot for that amount? Tax code they’ve used is MT 01 which is different than what was normally used and an emergency code I think.

Is there any reason why they’d use that code? Just wanting to see if he needs to have yet another argument with them!

[Maydup]

20% of £279 is £55.80 (sadly!) so the calculation looks correct to me.

[davebro]

His personal allowances will have been used against the basic pay he got for that month so a 20% deduction seems correct.

[New Judge]

MT 01 is "Month 1". That means that the tax calculation does not consider any other earnings or tax deductions from the financial year. If the payment was made this month this is month one of the financial year. Did (or will) your OH have any other income this month? If not he should pay no tax on that sum but he won't be able to get it back from his previous employer as they have acted correctly.

[bobbinwales]

Am not sure it works like that for a refund newjudge as hmrv don't know for sure he won't earn more in next 50 weeks. Even if he don't work again or have pension income I think hmrc will want to leave any refund until spring '/ summer 2023?

[bobbinwales]

Sorry newjudge... on rereading it maybe that's what you meant newjudge

[New Judge]

Yes, what he needs to do is to ensure his P45 figures include the extra amount he has been paid this year. When he begins work again the PAYE system will then account for that tax and it should balance out with his first lot of salary.

[Peter Pedant]

yeah I was gonna say that it all wodges out in the 2022-3 tax year. The new employer will want his P45 and puts him on an emerg code until he gets it,
but even that evens out.

[Deskdiary]

Is it just me that thinks the HMRC tax system for individuals is so complex and unwieldy on purpose?

I’m not a conspiracy theorist, but even as a PAYE employee I’ve been doing self-assessment for about 15 years and I’m still none the wiser.

I don’t think I’m particularly stupid, but I’m always baffled.

I had a CGT liability last year (having previously signed an s431) and knew exactly how much I owed, because I worked it out for myself, and the number was confirmed by an accountant, but they absolutely wouldn’t have it. 12 months later I’m still arguing the toss with civil servants who are still working from home and who are still swerving phone calls “due to Covid”.

[bobbinwales]

Just you I think deskdiary.

[Peter Pedant]

There is a tax simplification ctee
and did so 1997 but if the chancellor cannot resist tinkering with the tax charges then the complication re-occurs

I had a look-ette at s431 and it is not surprising there is conflict - are you Mrs Sunak by any chance?

I was over assess by a factor of ten - £32 000 rather than £3200 and nothing flagged at HMRC until I squawked
( they sortta said 'oh, yeah')

[New Judge]

//...I’m still arguing the toss with civil servants who are still working from home and who are still swerving phone calls “due to Covid”.//

And that's an absolute scandal, dd. There is no need for anybody to be WFH now and they all need to get off their Arisses and get back to the office. The idiots who defend WFH and say that everybody is working to the same (or even higher) levels of efficiency obviously haven't tried to contact any organisations (state or private) recently.

Rant over and apologies to Greysmad for going off topic. But I just can't help it because it is absolutely outrageous.