Tax Credits & Tax Rate Bands

I

Ion2211

Registered User
Messages
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Hi Guys,

I just signed up based on a friend's recommendation.

I'm hoping somebody here could help me out by clarifying my tax credit situation because I'm a bit confused to be honest.

So here's the situation..

- I finished my previous job in April of this year and started a new job in August. (I was in receipt of Jobseekers Benefit in the interim)

- When I started my new job in August, I provided my new employer with my P45.

- Shortly after starting, I received an "Amended Tax Credit Certificate - 2013" in the post :

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- I've received 2 salaries since then (Aug & Sept), on both Payslips my Tax code was "W" as opposed to "N" denoting "Normal".

- I rang the Tax Office to clarify. Apparently I was being taxed on a "week 1" basis (which doesn't mean much to me). The lady I spoke to notified me that I had slightly overpaid tax (by about €70/80 according to her). She said she will re-issue a tax credit certificate to my employer and my overpayment will be reimbursed in my next salary.. Great.

- So yesterday I received another "Amended Tax Credit Certificate - 2013" in the post. Whats baffling me now is that my tax credits seem to be lower than before and my 41% tax band seems to also have dropped from €32,800 to €30,251 along with my Yearl/Monthly/Weekly figures!


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What I'm not clear on; If I've been Overpaying tax for the past 2 months why have my Tax Credits and my Tax Rate bands been reduced? Surely this will result in me paying more tax next month?

Also, I was under the impression that the Tax Rate Band figures are fixed at the standard rate for anything up to 32,800 and 41% on anything above that... Why will I be paying 41% on anything above 30,251? Is this threshold not meant to be the same for everybody?

Thanks for any insight you can offer.
 
Jobseeker's Benefit is taxable, but you didn't have tax deducted when it was paid to you.
Some of your 20% band has been "used up" with the Jobseeker's Benefit you received between April and August.
I'd assume the adjustment in your tax credits is to bring your tax position up to date, including the JB.
 
Don't worry. At the end of the year request a P21 statement and all your income and tax will be calculated based on the whole year and your will get a refund for anything you're due.

Your tax situation often becomes a bit messy when you change jobs and even more so when you through some social welfare into the mix.
 
Thanks for the replies. I wasn't aware JSB was taxable, so i'm essentially paying tax on my tax!

That said, i wonder why they didn't pick up on this when they sent out my first tax credit cert after starting my new job?

Also, will they automatically re-increase my tax credits and 41% threshold once the tax on my JSB has been cleared? .... I imagine i'll have to chase them again for it.
 
Given that it's close to the end of the year, my advice would be to just leave it as it is if you can afford to.

It should automatically sort itself out at the end of the year and your tax credit cert at the start of 2014 should be "normal" again.

If you really want to follow up on it now, maybe send an email to your local revenue office. I find it handier than ringing and being on hold for an age! Can take a few days to get a response to your email but if you include all the information clearly in your email they should be able to sort out your situation.
 

Thanks PolkaDot, will a new Tax Credit Cert be sent out automatically at the start of 2014 or will I have to request it??
 
Your employer should get your info automatically. You might not receive a cert in the post yourself.

Are you registered for PAYE online? Good way of seeing your latest cert yourself.
 
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