Regarding tax
thinkingsoul
Community member Posts: 68 Connected
Not sure if anyone can help me but will give it ago.
I have spoken to HMRC and they said my tax free allowance is up to 12,500 before I pay anything, I am still working. when will I get my new allowance where I won't pay any tax untill I get over the 12,500? is it April. Thank you all.
I have spoken to HMRC and they said my tax free allowance is up to 12,500 before I pay anything, I am still working. when will I get my new allowance where I won't pay any tax untill I get over the 12,500? is it April. Thank you all.
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The tax free allowance is £12,570/annum. It runs from 6th April to 5th April each year.0
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@calcotti does that mean I won't pay anything in April ?0
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Hello @thinkingsoul thanks for reaching out.
That's right it is April, the 2021-2022 tax year began on April 6th 2021 and will run until April 5th 2022. So the next one will run from April 6th 2022, and so on.
Was there anything else you need a hand with today?
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thinkingsoul said:@calcotti does that mean I won't pay anything in April ?
If you are employed your employer deducts tax each month based on your earnings and the Tax Code issued to you by HMRC (which HMRC also tell the employer) on the assumption that your earnings will continue throughout the whole year. If it wasn't done that way you would not pay any tax for several months but would then see a massive drop in take home pay when tax started to be deducted.
Usually the tax calculation is applied on a cumulative basis which means that in month one of the year the calculation looks at your pay for that month against a tax free amount of £1,047.50 tax (one twelfth of the annual allowance). In month two it looks at your total pay to date against a tax free amount of £2,095.00 taking into account any tax already paid etc.
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