Tax and NI question
 

Is the Tax and NI you get shafted for, sorry, you pay, every month calculated monthy or based on a yearly salary?

The reason I ask is that I moved to Canada last April, and as such I'm being paid in Canada. What I'm wondering is if I would get some form of rebate, for example, if I worked in UK from Jan 2003 - April 2003, and tax and NI are calulated on a yearly basis, as I did not work from May 2003 - Dec 2003 in the UK then the calculations would be incorrect as I would not have worked a full year in the UK.

Doubt there is a rebate at all (might get one here though, as I came over in april) but just curious.

AFAIK it's calculated on an annual basis, so if yo do not work the whole year you should get some rebate.

The tax you paid is calculated on a monthly basis, but they assume you are going to paid roughly similar for the whole year. So if you stop working before the end of the tax year you will have overpaid on your tax, NI is not refundable.

I worked for three months one tax year but they assumed I would carry on earning the same amount for the whole 12 months during the three months I actually worked, so i had overapid my tax to the tune of about 600 quid. This all to do with tax allowances, i.e. how much you have to earn before you have to pay income tax, being divided on a monthly basis. I could try to explain this in words but i don't have the patience unfortunately, plus you're a clever chap you'll figure it out.

Now here's the twist, the tax year is not jan-dec, its apr-apr, the tax year changes on the 5/6th april. So if you only worked Jan -Apr chances are, if someone was clued up when doing the payrole, and they usually are, you will have paid the correct amount for those 4 months. But to be sure give your last tax office a call, and ask if you are due a rebate. The tax office will be shown on your P45/P60.

Reffo is spot on there! :)

If you worked all of April, then you will be due tax back for Apr 6 to the end of April as you will (presumably) be non tax resident for the new tax year.

Also its based on when you work rather than when you were paid. So if you are paid say mid April for work in March, then you can't claim that back because its related to the previous tax year.

Also just to note about the rip-off British tax system, you also pay tax on your NI contributions as the income tax figure is calculated on your total salary before NI is deducted :mad:

erm having worked in Canada (Vancouver) you WANT to be paying UK tax -as I recall I was paying nearly 58% Canadian tax and was shaf*ed!!! but then I was getting paid over $300k Canadian dollars..................

Monthly - correct

if you are working for the parent with a subsid in Canada then you should be paying UK tax (so you can still retain pension bens!!) with some agreement on e/r movements

Erm the e/r movements are more to fix the recharge to the Subsid if your getting paid in Sterling you dont care!!