Tax certificate

3283winnie

Hi can someone please help me regarding revenue so we got a tax cert in jan 2017 to say we can earn 42800 before going on the higher tax bracket but in september i got a job so we got an amended tax cert to say we can earn 58765 before going on the higher tax bracket but now they have giving us a p21 balance statement saying we owe money but on the calculations its refering to january tax cert is this correct or should it be calculated at my amended tax cert from october any advice plz

The Hill Billy

Moved to the Taxation forum from Dublin County South.

tHB

Squatter

3283winnie wrote: »

Hi can someone please help me regarding revenue so we got a tax cert in jan 2017 to say we can earn 42800 before going on the higher tax bracket but in september i got a job so we got an amended tax cert to say we can earn 58765 before going on the higher tax bracket but now they have giving us a p21 balance statement saying we owe money but on the calculations its refering to january tax cert is this correct or should it be calculated at my amended tax cert from october any advice plz

From what you have written above, it appears that at the start of the year, you were a married couple with one partner earning. That would explain the €42,800 SRCOP.

Then in September, you got a job, so you became a married couple with both partners earning.

This meant that between the two of you, you could earn up to €67,600 (but note that this breaks down as first partner up to a maximum of €42,800, second partner an extra €24,800 max) before either of you becomes liable to pay higher rate tax.

If you want to post up total gross pay for each of you for 2017 from your P60s I'll do a quick calculation of what your PAYE bill should be for 2017.

3283winnie

Squatter wrote: »

From what you have written above, it appears that at the start of the year, you were a married couple with one partner earning. That would explain the €42,800 SRCOP.

Then in September, you got a job, so you became a married couple with both partners earning.

This meant that between the two of you, you could earn up to €67,600 (but note that this breaks down as first partner up to a maximum of €42,800, second partner an extra €24,800 max) before either of you becomes liable to pay higher rate tax.

If you want to post up total gross pay for each of you for 2017 from your P60s I'll do a quick calculation of what your PAYE bill should be for 2017.

Perfect thanks so much so i earned 4780 in the year and he earned 52

3283winnie

3283winnie wrote: »

Perfect thanks so much so i earned 4780 in the year and he earned 52

Sorry ph sent txt early thanks for your reply so end of year for my husband he earned 56,250 oh which 8355 was from illness benefit which he was on till october then my total earnings was 4476 they have taxed 42800 at 20% and then 13450 at 40% is this right i dont think it is as they have added are both gross and taxed it at 20% 42800 and the rest at the higher bracket tks for your help also can i ask how do i know if the illness benefit is added to my husband gross income on his p60 as the tax office have added the 8355 to his gross pay from p60 tks

Squatter

Income for 2017:

Him: 56,250 (including Illness Benefit)

42,800 @ 20% = 8,560
13, 450 @ 40% = 5,380

You:

4476 @ 20% = 895.20

Total PAYE Due: €14,835.20 less your credits (see below) of €5845.20

Tax credits: Personal: 1650 for each of you. PAYE credits: 1,650 for him, 895.20 for you. Total: 5845.20.

So the total amount of PAYE that the pair of you should pay for 2017 is €8,990.20 (this would exclude any additional tax credits that you may have claimed, for health expenses, etc.)


The answer to your questions:-

"they have taxed 42800 at 20% and then 13450 at 40% is this right" YES it is.

Part A4 of your husband's P60 would show whether his illness benefit has been included in his total pay. You need to look at Part B3 of the P60 to see whether they have taxed him on his Illness Benefit. If it has been taxed by the employer then Revenue shouldn't have taxed him again on it.

3283winnie

Squatter wrote: »

Income for 2017:

Him: 56,250 (including Illness Benefit)

42,800 @ 20% = 8,560
13, 450 @ 40% = 5,380

You:

4476 @ 20% = 895.20

Total PAYE Due: €14,835.20 less your credits (see below) of €5845.20

Tax credits: Personal: 1650 for each of you. PAYE credits: 1,650 for him, 895.20 for you. Total: 5845.20.

So the total amount of PAYE that the pair of you should pay for 2017 is €8,990.20 (this would exclude any additional tax credits that you may have claimed, for health expenses, etc.)


The answer to your questions:-

"they have taxed 42800 at 20% and then 13450 at 40% is this right" YES it is.

Part A4 of your husband's P60 would show whether his illness benefit has been included in his total pay. You need to look at Part B3 of the P60 to see whether they have taxed him on his Illness Benefit. If it has been taxed by the employer then Revenue shouldn't have taxed him again on it.

Thank you on a4 on p60 its says 0.00 himself earnings are 56250 thats including my 4476 are tax credits with expenses are 7016 tks for your help b3 says 3459 total tax paid so would this come of the tax bill aswell as the tax credits tks

Squatter

3283winnie wrote: »

himself earnings are 56250 thats including my 4476 are tax credits with expenses are 7016

Sorry but that statement doesn't really make much sense!

Are you saying that HIS income of €56250 includes YOUR income of €44746?

and did you mean to type "our tax credits are €7016"?

3283winnie

Squatter wrote: »

Sorry but that statement doesn't really make much sense!

Are you saying that HIS income of €56250 includes YOUR income of €44746?

and did you mean to type "our tax credits are €7016"?

Yes they have added my earnings to his gross earnings of 43200 and added his illness benefit of 8277 which gives him a total of 56250 then taxed it all together the tax credits are as follows personal tax 3300 employee tax cr 1650 home carer tax cr 1100 health expenses 372 total of 7317 tax credits

Squatter

3283winnie wrote: »

the tax credits are as follows personal tax 3300 employee tax cr 1650 home carer tax cr 1100 health expenses 372 total of 7317 tax credits

Ouch! Throwing the home carer tax credit into the mix changes things a bit! For one thing, you cannot claim both the increased Standard Rate Cut-Off Point for dual income couples and the Home Carer Tax Credit, so I'm puzzled as to how you got an increased SCROP in September!

You'd better disregard the calculations that I did for the two of you earlier in this thread as they don't apply to your situation.

Are you by any chance being paid Carer's Allowance as well? If so, it's taxable income so Revenue would need to to told about it.

3283winnie

Squatter wrote: »

Ouch! Throwing the home carer tax credit into the mix changes things a bit! For one thing, you cannot claim both the increased Standard Rate Cut-Off Point for dual income couples and the Home Carer Tax Credit, so I'm puzzled as to how you got an increased SCROP in September!

You'd better disregard the calculations that I did for the two of you earlier in this thread as they don't apply to your situation.

Are you by any chance being paid Carer's Allowance as well? If so, it's taxable income so Revenue would need to to told about it.

No i was giving home carer for being a stay at home mother no i dont get carers allowance its very confusing

Squatter

OK, I've tweaked the calculations that I did earlier to reflect the Home Carer bit:-


Income for 2017:

Spouse: €56,250 (which includes both Illness Benefit and your wages)

56,250 @ 20% = 11,250 (based on what you wrote above, i.e. that your revised SCROP is €58,765!)

You:

nothing!


Gross PAYE Due: €11,250 less your tax credits of €7,317 leaves Net PAYE due to Revenue of €3,933.

How much tax is shown in his P60 for 2017 at B3?

3283winnie

Squatter wrote: »

OK, I've tweaked the calculations that I did earlier to reflect the Home Carer bit:-


Income for 2017:

Spouse: €56,250 (which includes both Illness Benefit and your wages)

56,250 @ 20% = 11,250 (based on what you wrote above, i.e. that your revised SCROP is €58,765!)

You:

nothing!


Gross PAYE Due: €11,250 less your tax credits of €7,317 leaves Net PAYE due to Revenue of €3,933.

How much tax is shown in his P60 for 2017 at B3?

3439 tks for all your help

3283winnie

Squatter wrote: »

OK, I've tweaked the calculations that I did earlier to reflect the Home Carer bit:-


Income for 2017:

Spouse: €56,250 (which includes both Illness Benefit and your wages)

56,250 @ 20% = 11,250 (based on what you wrote above, i.e. that your revised SCROP is €58,765!)

You:

nothing!


Gross PAYE Due: €11,250 less your tax credits of €7,317 leaves Net PAYE due to Revenue of €3,933.

How much tax is shown in his P60 for 2017 at B3?

3339

Squatter

3283winnie wrote: »

€3339

So he would appear to owe Revenue about €600.

Hopefully they'll reduce your tax credits for 2018 rather than asking him to pay it!

3283winnie

Squatter wrote: »

So he would appear to owe Revenue about €600.

Hopefully they'll reduce your tax credits for 2018 rather than asking him to pay it!

But on there p21 they have said i owe 3100 euro there calculations are as follows

Income 56250

42800 @ 20% = 8560
13450@ 40%= 5380

Total 13940

Less tax credits of 7317

Less tax of 3439

Total 3183

The reason im struggling with it is because they have added my income with my husband he is the bigger earner so i gave him my tax credits cause was advised to do this so when i recieved my amended tax cert in october it states he can earn 56750 before the higher tax bracket very confusing as to why they did 40% on any of the income

Ciaran

Squatter wrote: »

OK, I've tweaked the calculations that I did earlier to reflect the Home Carer bit:-


Income for 2017:

Spouse: €56,250 (which includes both Illness Benefit and your wages)

56,250 @ 20% = 11,250 (based on what you wrote above, i.e. that your revised SCROP is €58,765!)

You:

nothing!


Gross PAYE Due: €11,250 less your tax credits of €7,317 leaves Net PAYE due to Revenue of €3,933.

This calculation is wrong. You can't have both a SRCOP of 56250 and the home carer's credit (included in the 7317). Also the husband's income is over 42,800 so can't be all taxed at 20% anyway.

Total income: 56,250
42,800 @20% = 8,560
13,450 @40% = 5,380
Gross Tax = 13,940
Less Credits: 7317
Net Tax = 6,623

3283winnie

Ciaran wrote: »

This calculation is wrong. You can't have both a SRCOP of 56250 and the home carer's credit (included in the 7317). Also the husband's income is over 42,800 so can't be all taxed at 20% anyway.

Total income: 56,250
42,800 @20% = 8,560
13,450 @40% = 5,380
Gross Tax = 13,940
Less Credits: 7317
Net Tax = 6,623

The home carers should of been stoped on the amended tax cert as i told them i was working so should it not only be 9 months of home carer added also he paid 3780 tax so should that be taking off and why send me a copy of the amended tax cert to say its 56700 before higher tax bracket tks

Ciaran

3283winnie wrote: »

The reason im struggling with it is because they have added my income with my husband he is the bigger earner so i gave him my tax credits cause was advised to do this so when i recieved my amended tax cert in october it states he can earn 56750 before the higher tax bracket very confusing as to why they did 40% on any of the income

Does the same tax credit cert show a standard rateband of 56,750 and the home carer credit? That doesn't sound right.

If you have the tax credit cert to hand, how is the 56,750 broken down?

Squatter

Ciaran wrote: »

This calculation is wrong. You can't have both a SRCOP of 56250 and the home carer's credit (included in the 7317).

Also the husband's income is over 42,800 so can't be all taxed at 20% anyway.

But from the information posted, the husband's income appears to include the wife's income!

3283winnie

Ciaran wrote: »

Does the same tax credit cert show a standard rateband of 56,750 and the home carer credit? That doesn't sound right.

If you have the tax credit cert to hand, how is the 56,750 broken down?

Ok ive sent a photo of the first orginal tax cert for january 2017 then the amended tax cert from october when i started work hope you can view these tks for your help

3283winnie

3283winnie wrote: »

Ok ive sent a photo of the first orginal tax cert for january 2017 then the amended tax cert from october when i started work hope you can view these tks for your help

Can you see the attached file showing the breakdown on tax cert?

Squatter

3283winnie wrote: »

Can you see the attached file showing the breakdown on tax cert?

Yep, both of the attachments are fully legible.

I note however that the second TCC states that it's "for the period 27 October to 31 December 2017 on a week 1/month 1 basis" which complicates the calculations further!

I had calculated your tax on the basis that the €56,750 SCROP that you told me about was for all of 2017, but that's incorrect because your second TCC is on a week 1/month 1 basis, so I'm out as I'm not familiar with how the home carers credit works and don't want to misinform you.

Sorry.

3283winnie

Squatter wrote: »

Yep, both of the attachments are fully legible.

I calculated your tax on the basis of the €56,750 SCROP that you told me about, but Ciaran reckons that I'm wrong so I'm leaving it to him as I'm not familiar with how the home carers credit works.

Thanks so much for all your help its just so confusing 😣

Squatter

3283winnie wrote: »

Thanks so much for all your help its just so confusing ��

Please see the edit to my previous message.

Ciaran

The second attached cert doesn't have the illness benefit included, I'm guessing that was the January one with home carer's credit and no credit for you?

My guess is that your husband's employer used that cert all year and never taxed the illness benefit. Tax of 40% on illness benefit of €8,835 (as on the other cert) comes to €3,534. Taking off the €372 credit for health expenses gives €3,162 which is only a few euros off the amount owing above.

3283winnie

Ciaran wrote: »

The second attached cert doesn't have the illness benefit included, I'm guessing that was the January one with home carer's credit and no credit for you?

My guess is that your husband's employer used that cert all year and never taxed the illness benefit. Tax of 40% on illness benefit of €8,835 (as on the other cert) comes to €3,534. Taking off the €372 credit for health expenses gives €3,162 which is only a few euros off the amount owing above.

I can see that is probaly the case but why add my income of 4777 to the illness benefit of 8735 and my husband gross pay of 43210 giving us the 52620 and then calculating it on 20% and 40% i can understand that over the 42800 mark would be taxed at 40% am i not allowed to earn up to 24000 before going on the higher tax bracket but they have just added all the figures together which makes it more complicated so are you saying that we were taxed on the lump sum of illness benefit which ended in october ?

Squatter

3283winnie wrote: »

.... are you saying that we were taxed on the lump sum of illness benefit which ended in october ?

Your second tax credit cert shows that your tax credits were reduced to take account of the untaxed illness benefit.

So this reduction in credits took care of any tax due on the IB.

Ciaran

3283winnie wrote: »

I can see that is probaly the case but why add my income of 4777 to the illness benefit of 8735 and my husband gross pay of 43210 giving us the 52620 and then calculating it on 20% and 40%

You're taxed on both your incomes together because you're jointly assessed. You're better off this way, otherwise your husband could only have had €33,800 taxed at 20% and the rest at 40%.

i can understand that over the 42800 mark would be taxed at 40% am i not allowed to earn up to 24000 before going on the higher tax bracket

If you're claiming the home carer's credit, you can either get the credit of €1,100 or the extra €24,800 taxed at only 20% but not both. The credit of €1,100 was worth more to you in your situation last year so that's what is given on the P21.

are you saying that we were taxed on the lump sum of illness benefit which ended in october ?

That's what it looks like, yes.

3283winnie

Ciaran wrote: »

You're taxed on both your incomes together because you're jointly assessed. You're better off this way, otherwise your husband could only have had €33,800 taxed at 20% and the rest at 40%.

If you're claiming the home carer's credit, you can either get the credit of €1,100 or the extra €24,800 taxed at only 20% but not both. The credit of €1,100 was worth more to you in your situation last year so that's what is given on the P21.

That's what it looks like, yes.

Ok i think i understand so on the p21 its says they will reduce tax credits to 796 for 2019 2020 2021 and 2022 so will that start nxt january and will my husband just pay more tax each week or will i have a tax bill every year ? If i had taking the extra 24800 instead of the home carer would all the income of been taxed at 20% or is it only 42800 for my husband and 24800 for me tks

3283winnie

Squatter wrote: »

Your second tax credit cert shows that your tax credits were reduced to take account of the untaxed illness benefit.

So this reduction in credits took care of any tax due on the IB.

Yes i can see the tax credits that were taking of for the illness benefit so why would i be taxed such a high rate if my credits were taking already ive no idea why

Ciaran

3283winnie wrote: »

Ok i think i understand so on the p21 its says they will reduce tax credits to 796 for 2019 2020 2021 and 2022 so will that start nxt january and will my husband just pay more tax each week or will i have a tax bill every year ?

It'll be an extra amount each week out of his wages.

If i had taking the extra 24800 instead of the home carer would all the income of been taxed at 20% or is it only 42800 for my husband and 24800 for me tks

42800 for your husband and 24800 for you.

3283winnie

Ciaran wrote: »

It'll be an extra amount each week out of his wages.


42800 for your husband and 24800 for you.

When will the do this will it be 2019 tks

3283winnie

Ciaran wrote: »

The second attached cert doesn't have the illness benefit included, I'm guessing that was the January one with home carer's credit and no credit for you?

My guess is that your husband's employer used that cert all year and never taxed the illness benefit. Tax of 40% on illness benefit of €8,835 (as on the other cert) comes to €3,534. Taking off the €372 credit for health expenses gives €3,162 which is only a few euros off the amount owing above.

Looking at the cert from october they had taking 1767 tax credits from my husband for his illness benefit i also feel should my 4777 gross income not be taxed all at 20% ??? They have used the january cert and giving us the home carer which works out a lot more on the return.. like i know we are jointly assessed but i can earn 24800 which i only earned 4777 which would be 20% taxed which is 955.40 take away my tax credit of 895 as i only worked for 4 months in 2017 so im not entilted to the full 1650 tax credit then taking the illness benefit off the tax credits like in october cert leaves us with 3183 credits can i not change it to the october cert way it works out so much less owed what do you think ?

Ciaran

3283winnie wrote: »

Looking at the cert from october they had taking 1767 tax credits from my husband for his illness benefit

Looking at that cert again, as Squatter said earlier, it's on a week 1 basis so essentially tax was only collected on the illness benefit for the portion of the year after that cert issued. This happens to avoid €3,000 being taken out of the next pay cheque.

i also feel should my 4777 gross income not be taxed all at 20% ??? They have used the january cert and giving us the home carer which works out a lot more on the return.. like i know we are jointly assessed but i can earn 24800 which i only earned 4777 which would be 20% taxed which is 955.40 take away my tax credit of 895 as i only worked for 4 months in 2017 so im not entilted to the full 1650 tax credit

Unfortunately, if you want to have your 24800 taxed at 20%, you can't have the €1,100 home carer tax credit as well. In your case, you'll pay less tax with the home carer credit so you're better having your income taxed at 40%.

When will the do this will it be 2019 tks

Yes.