Income tax

Jul 05, 2004 2 Replies

No. What you say would not save any money.

When calculating the tax on the salary, you take the allowance for the year to date (1 month in April, 2 months in May) and so on, and deduct from that the allowance you have already used up. This will normally leave you with

1 month of allowances. If you didn't use the allowances in previous months, then you get to use them this month.

Stopping and starting each week would give you exactly the same figures and make no difference to the amount of tax you pay.

If you are out of work at the end of the year, you can't carry that month's allowance to the following year, but you can get a refund.

Having recently started a new job I found that my second months salary was



100 less than my first months salary. After querying this I was told it was because I finished my previous job on the last day of the month (friday) and did not start my new job until the following thursday. This meant I had 5 days of tax allowances because I was technically unemployed for those days even though I did not sign on. Does this mean that tax is calculated over the whole month and not just the days you work, if this is the case would it not be a good way to pay less tax to only be employed monday to friday and start a fresh each monday e.g. you are only employed for every 20 days out of 28 and are unemployed for 8 i.e. the weekends. Obviously you would not qualify for some benefits but you could save a lot of money in tax. I am sure the bar stewards sorry inland revenue would try and stop you but do you think it could be a goer.

Jon


The way the PAYE works is that each month it allows you 1/12 or 1/52 of the annual allowances so over the year the calculation ends up correct> Did you take the P45 to your new employer? If not they could have you on the wrong code until the paperwork catches up. There is no advantage such as you suspect.

Join the Discussion

Have something to add? Share your thoughts — no account required.

Didn't find your answer?

Ask the community — no account required