Claiming tax back- what is the limit?

[sherby]

I'm a student, but Im getting taxed by my work. I claimed back last year but i have worked alot more this year. I wondered what is the maximum you can earn before you can't claim tax back? Or is it a case of you can claim back up to the allowance and anything earned over it you cant claim back.?
I hope that makes sence...!

Many thanks,

[kempie]

Your personal tax code is the indicator of how much you can earn in a tax-year before you are liable for income tax i.e. your tax allowance.

Assuming you have the 'usual' code for this tax-year (2007-8) of 522L, this signifies that if you earn below �5225 (this figure is arrived at by tacking a 5 to the end of the 3 figures of the code) you are not liable for income tax. Any tax you may have paid whilst earning up to this amount can be claimed back.

If you earn more than your allowance, the amount over the allowance is taxed at the applicable rate e.g. earnings of �7225 would attract taxation of the �2000 over the �5225 allowance.

The amount of tax you should pay and the amount you do pay through the PAYE system (especially via Emergency Tax) do not always match up. Irrespective of how much you earned, if you have paid too much income tax you can claim back the overpayment at the end of the tax year, however the trick is calculating how much tax you should have paid.

Sites such as this are useful for that calculation...
http://www.listentotaxman.com/

Asking your employer for form P38S when you start your employment prevents paying income tax from the outset.

[Tichfield]

Each tax year (6 April to 5 April) is treated separately.

If you have paid too much tax in a year you can claim back the overpayment.

On the other hand if you have not paid enough tax then you will be asked to pay what you owe.

[kags]

kempie is right about the form P38S, BUT it only applies during the long summer break. The rest of the year you will just have to suffer the tax then reclaim it.

[kempie]

Indeed, I neglected to specify that the P38S allows students to receive pay free of Income Tax (within earning limits) who undertake work during a holiday break period from education, but surely this is for all such holiday periods not just Summer?

[kags]

kempie - I think you are right, it used to specify in the PAYE instructions for employers that the P38s must only be given during the summer vacation, but it has now changed and specifies only that it must be during a holiday
http://www.hmrc.gov.uk/forms/p38s.pdf
http://www.hmrc.gov.uk/manuals/epmanual/EP8600 .htm
indeed it mentions the holiday spanning 5 April so it must mean all holidays. I am a little out of date, my apologies!

[boleynground]

Check the tax code on your payslip - if it is 522l (on its own, or followed by ***) then it sounds like you are on a cumulative code. This should be the case if you were working for your present employer on 6th April 2007. They can start the tax year on the cumulative code.
If you are on 522l Wk1, or 522L X, then that is non-cumulative. My daughter has even found herself on BR Wk1, when they thought there's was a second job (ie no allowances). In these cases, find out who deals with the tax for your employer, from the wages office, and give them a ring, or write (with your National Insurance number and tax reference (also from the wages office) and get yourself put on a cumulative code. It is the easiest way, but be quick and get in touch soon, as the tax year finishes on 5th April.

[hev]

In short, there is no maximum amount it depends on how your tax code operated throughout the year if you are currently still working you will have to wait until the tax year ends to apply for a refund when you get your P60 . If you have stopped and are not going to work again this tax year then complete a P50 and send in with your P45 to your tax office.You can earn 5225 tax`free then the next 2130 is at 10% anything over this is taxed at 22% so if you have a P45 then you can roughly work it out