assessable pay query

paul39222 · Post by **paul39222** » 14 Jan 2018, 12:54

Could someone maybe shed light on the following?

I commenced employment with Royal Mail on 15th June 2017 and tax has been deducted from my earnings since w/c 3.11.17 (tax period 31/2018). However, this was when my assessable pay was only £6,967, when of course the tax free allowance is £11,500.

Is this in order? And if so, what haven't I understood? As far as I recall, I have had no other income this tax year and my tax code is the generic 1162L/0.

joewyan · Post by **joewyan** » 14 Jan 2018, 13:29

By the end of the year will your pay be over the £11500 threshold if you continue to get paid what you currently get paid each week? If so then you are liable for deductions yes, if not then I’m not sure why this has happened unless you earnt a lot for some weeks and it will come back to you when you earn lower amounts again.

paul39222 · Post by **paul39222** » 14 Jan 2018, 13:47

I'm a normal postman, so yes my pay at the end of the tax year will be over £11,500 but not sure why tax started to be deducted when I had only earned about £7,000. I would assume tax would start to be deducted when I had earned £11,500!

joewyan · Post by **joewyan** » 14 Jan 2018, 13:57

paul39222 wrote:I'm a normal postman, so yes my pay at the end of the tax year will be over £11,500 but not sure why tax started to be deducted when I had only earned about £7,000. I would assume tax would start to be deducted when I had earned £11,500!

To be honest I’m surprised it didn’t start deducting from the start unless your earnings have gone up. You will be deducted each week as long as you earn over approx £221 because they calculate tax based on your earning that much every week until the end of the year. You only pay tax on anything over £221 and it will be 20% of your earnings over that amount.

Hope this makes sense.

Post by **RobertT** » 14 Jan 2018, 13:59

In practice it’s not a case of not paying tax until you hit £11,500, but they assume you will get paid at a certain rate until the end of the tax year and make weekly deductions as appropriate.

By the time you reach 5th April, things should have evened themselves out.

In the meantime you may find this calculator useful: https://www.gov.uk/estimate-income-tax" onclick="window.open(this.href);return false;

Janet Brum · Post by **Janet Brum** » 14 Jan 2018, 17:30

I had the same querry in the past and from what I could find out is the tax people take out 10% weekly tax instead of 20% to help with the earnings, if they were to take 20% after the 11.500 treshold, it would have been harder for my wallet.

paul39222 · Post by **paul39222** » 14 Jan 2018, 17:38

Many thanks for all your replies. From what you say, I think I pretty much understand it now.

Post by **Lincox** » 15 Jan 2018, 19:00

The simple answer is that the £11500 personal allowance is divided up over 52 weeks so that you get an allowance against your weekly pay.
If you were given all of your allowance up front it would mean that if you earned £11500 in the first week of the tax year there would be no tax deduction, which of course is ludicrous.