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tactile

tax calculation

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Basic Pay- £34557

Band 1 A supplement

could some one explain how the income tax /NI  is calculated.

My Tax code is BR for the last 3 years/

The tax office when contacted says that i am paying basic rate while earning high income and i may have to pay back to the tax office (could be a big amount).

Any one who know about the taxation system -------pl help

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you have a tax free ammount - you should have a tax code which tells you how much, but you haven't cos you are on br code.  i don't know why that is.  

then you have a 10% rate bit for the next 2150ish.

then you pay 23% for the next 28000ish.

then you pay 40% on the rest.

you need to find out why you are still on the br rate.  you shouldn't have been on it that long.  you could owe lots of money.

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BR rate means that you haven't been allocated a tax code. there fore you pay tax on a rate of 40%, and not a tax that is calculated on the different bandings. such as the first £5000 not taxed then the next 10,000 on 22%. this happened to me and i didn't have a tax code for the first year of employment, and had paid around £1200 extra intax for that year, which i got back, which was a very nice suprise. more likely the inland revenue owes you money and you will have a lovely suprise. just contact the inland revenue, then you have to send your p60 for the past 3 years, they'll calculate the tax code and send you the check.

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BR rate means that you haven't been allocated a tax code. there fore you pay tax on a rate of 40%,

No. BR means you pay tax at 22%

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Looks like I will have to pay now if the BR is 22%.

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