Income tax question

candlegrease

Hi,

So as as far as I understand we are taxed based on the year running from January 1 -> December 31. Therefore, if I work a job with a salary of 40k before tax, and I start work in July 2014 and end July 2015, I will have earned 20k in the first six months (July-Dec) of the year and 20k in the first six months of the 2015 (Jan-July). If I don't work again in July am I right in saying all my income will be in the lower band as I don't exceed 32k in a given tax year?

Hopefully that was explained clearly. Thanks in advance.

barneystinson

candlegrease wrote: »

Hi,

So as as far as I understand we are taxed based on the year running from January 1 -> December 31. Therefore, if I work a job with a salary of 40k before tax, and I start work in July 2014 and end July 2015, I will have earned 20k in the first six months (July-Dec) of the year and 20k in the first six months of the 2015 (Jan-July). If I don't work again in July am I right in saying all my income will be in the lower band as I don't exceed 32k in a given tax year?

Hopefully that was explained clearly. Thanks in advance.

Yes

CIARAN_BOYLE

Some of the 20k earned in 2015 may be taxed at the higher rate but the difference can be reclaimed later in the year.

candlegrease

CIARAN_BOYLE wrote: »

Some of the 20k earned in 2015 may be taxed at the higher rate but the difference can be reclaimed later in the year.

I see. I don't understand why it would be though, given it's a new tax year.

CIARAN_BOYLE

candlegrease wrote: »

I see. I don't understand why it would be though, given it's a new tax year.

Because while you have 32800 at the lower rate each year you only get access to about 630 of it each week you will earn more than each week for the first six months òf the year so pay tax at 41% and get a refund at the end of the year.

candlegrease

CIARAN_BOYLE wrote: »

Because while you have 32800 at the lower rate each year you only get access to about 630 of it each week you will earn more than each week for the first six months òf the year so pay tax at 41% and get a refund at the end of the year.

That makes sense, thanks. I see that it's based on projected earnings.

namenotavailablE

I've an Excel calculator available at the address given in my signature line below (must be logged in to see it) which might help you with your query/ confirm your understanding.