P45 tax amount confusion

[RandomQ's]

Hi everyone

I have just viewed my P45 from an employment agency, and after adding up my income tax and NI contribution amounts shown on my payslips, it seems the employment agency have omitted adding my NI contributions to the final tax amount shown on the P45. The amount shown is the total of my income tax deductions.

Is this normal? I was always under the impression that the P45 amount tallied both NI and income tax deductions for the final amount...

To note, I started with them in May 2019 and finished with them November 2019.

Any help would be great.
Thanks guys

 

[Scalloway]

NI is paid per employment while Income Tax is cumulative. Your new employer does not need to know what NI you have paid to date.

NI paid will be on your P60.

 

[RandomQ's]

Thanks, so that means it is never tallied with the income tax on the P45? For some reason I thought it was..

 

[RandomQ's]

Sorry forgot to mention, I have to do a directors salary self assessment now (reason I left employment agency).

Can I request the P60 from them as that year is finished now?

Thanks again

 

[Scalloway]

You should have got one by now so yes, request your P60.

 

[Anna Chandley]

You were issued a P45 so you won't be issued a P60. P60s are only issued if you are still employed at the end of the tax year.

 

[Spur Support Services]

As Scalloway said, NI won't be on your P45.
You don't need it for completing your self assessment income tax return. National Insurance and Income Tax are different taxes, each with their own rules and thresholds.

For the self assessment tax return you will need an multiple employment sections, one for each employer. Use the figures from the P45 for your the section you complete for the agency employment.

However, you may want to double check whether you need to complete a self assessment tax return, as it will depend on your income sources, even if you are a director.

 

[RandomQ's]

Thanks guys, really helpful.

Whats strange for me is that whilst with them, I earned less than 12,000, but was still taxed and NI deductions taken. I though you weren't taxed until you mad over 12,000..

 

[Scalloway]

PAYE is calculated monthly on a cumulative basis so if you earned £12,000 over 7 months the payroll system would assume you would be earning enough in a year to pay tax.

NI is done each month in isolation so if you earn enough in one month to trigger an NI deduction it makes no odds what you earn the rest of the year.

 

[RandomQ's]

PAYE is calculated monthly on a cumulative basis so if you earned £12,000 over 7 months the payroll system would assume you would be earning enough in a year to pay tax.

NI is done each month in isolation so if you earn enough in one month to trigger an NI deduction it makes no odds what you earn the rest of the year.

Thanks, but honestly Im still a bit confused.

I earned about 10g, but was still taxed..?

Oh hold up, does that mean even though I earned 10g over 5 months, payroll would view it as Im "on track" to earn 12,000 over the year..?

 

[Anna Chandley]

If you have the standard tax code of 1250L then you receive £1042 of your personal allowance each month on a cumulative basis.

So if in month 1 you are paid £1600 you would pay tax on £558 (£1600-1042)
If in month 2 you are also paid £1600 you would pay tax on £558 (£3200-£2084-£558)

If you leave at the end of month 5 you will only have used £5210 of your personal allowance so if you have no other income for the tax year you will have overpaid income tax.

The above applies for income tax only not national insurance

 

[Mr D]

Means if the P45 income figure is the total income you had for the year then you should get a refund of tax paid.

Based on your tax return it should tell you when you finish the form (if online) so you will know what you are getting.
The when? Anything from a few days to a few months. When not busy I'd think by end of next week....