Tax year question.

dobsdave

Started a new job in June. We get paid on the 1st Friday of the month for the previous month.
So for time worked in December, we will get paid this on the 6th Jan.
My question is, will that payment be considered for 2016 or 17?
The payslips don't have an actual dates on them, but are called 201609 for payroll received on 7th Oct for example.
Thanks.

exaisle

I'd assume that the 201609 meant September 2016 so the one you'll get in January will be in the 2016 tax year.

Mrs OBumble

I believe that the money will be regarded as income for y he year when you are actually paid, no matter when you did the work.

So if you get December's pay in January, then it counts as income for the follow year.

Avatar MIA

exaisle wrote: »

I'd assume that the 201609 meant September 2016 so the one you'll get in January will be in the 2016 tax year.

It looks like that the October payment is for September. The company takes a week to process and make payment, but refers back to September.

If that's the case the Jan 2017 payment will be in your 2016 P60 and taxable in 2016.

thesimpsons

I thought only income paid over in Jan-Dec 2016 period could be included in the 2016 P60 using that year's credits, cut offs etc. so your P60 for 2016 would only have whatever you were actually paid for in 2016.

Surely if the payment is made in January 2017 it becomes part of the 2017 tax year and subject to the relevant credits/cut offs etc under the 2017 budget requirements. I've never seen it operated the way Avatar describes.

Avatar MIA

thesimpsons wrote: »

I thought only income paid over in Jan-Dec 2016 period could be included in the 2016 P60 using that year's credits, cut offs etc. so your P60 for 2016 would only have whatever you were actually paid for in 2016.

Surely if the payment is made in January 2017 it becomes part of the 2017 tax year and subject to the relevant credits/cut offs etc under the 2017 budget requirements. I've never seen it operated the way Avatar describes.

Look at what the OP describes - the payment is in one month, but relates back to the prior month. That's the month from which the tax credits and bands will be taken.

For argument sake, assume salaries were run in your company in December, but the pay clerk forgot to pay you until into 2017 – to what period would the pay relate?

It would be 2016.

Mrs OBumble

thesimpsons wrote: »

I thought only income paid over in Jan-Dec 2016 period could be included in the 2016 P60 using that year's credits, cut offs etc. so your P60 for 2016 would only have whatever you were actually paid for in 2016.

Surely if the payment is made in January 2017 it becomes part of the 2017 tax year and subject to the relevant credits/cut offs etc under the 2017 budget requirements. I've never seen it operated the way Avatar describes.

Indeed. What more, most weekly or fortnightly payroll systems pay across tax year boundaries. I cannot imagine them apportioning pay across multiple financial years.

Carawaystick

If you were a contractor and invoiced for work done in Dec2016, you'ld pay 2016 tax on it.
the invoicing is implicit in an employees case.

Avatar MIA

Question - how many here have processed payroll

allthedoyles

It would all depend on the pay period . If his pay in October was actually pay period 09 then there are 3 months left and his pay in early January will be in 2016 .

It looks to me that his monthly pay day is the Friday following month-end .

exaisle

Carawaystick wrote: »

If you were a contractor and invoiced for work done in Dec2016, you'ld pay 2016 tax on it.
the invoicing is implicit in an employees case.

This is completely irrelevant to the original post. Employees do not invoice their employers.

Avatar MIA

exaisle wrote: »

Employees do not invoice their employers.

Or they do, but Revenue don't like it :pac:

psnKOB79LFC

Basis of assessment on when income is earned, not paid, so 2016