Navigating the complexities of taxation can be a daunting task, but gaining a solid understanding of how taxes apply to education staff is essential for financial stability and peace of mind. In this blog, we break down the essentials of tax, making the complex simple and ensuring you’re well-equipped to tackle tax obligations.
Your Introduction To Tax
UK Income Tax runs for a 12-month period from 6th April to the 5th April the following year.
Employers will deduct taxation before paying the balance of your wages.
At the end of each year should you still be registered with GB we will issue a P60 which indicates the totals of salary and deductions paid to you through that tax year.
Everyone has a Personal Allowance which will be allocated to your income. This is set by the UK Government during each Budget. Please be aware that this Personal Allowance is allocated per individual and not against the numerous employments that you have, i.e., working with three agencies you will not be able to have three personal allowances.
Understanding Tax Codes
HMRC will provide a tax code to individuals, which consists of numbers followed by a letter. For example a Personal Tax Allowance of £12750 would be 1275 followed by a letter – in most cases this is “L” which indicates that the tax code will automatically be updated following any Government changes in allowances
Other codes could include: –
BR – all income to be taxed at 20% (Basic Rate)
DO – all income to be taxed at 40%
OT – all income to be taxed
DI – all income to be taxed at 45%
Should you have more than one job then it will be likely that this income will be taxable at a higher rate.
Please note that GB are unable to alter your Tax Code without the authorisation / notification from HMRC. Should you feel that your tax code may be incorrect then you should contact HMRC via telephone or your personal Gateway Account.
Your Tax Responsibilities
Remember, if you’re embarking on a new role with GB, be sure to have your most recent P45 at the ready from your previous employer. In the event that a P45 isn’t available, fear not – the HMRC Starter Checklist (formerly known as the P46) will come to the rescue, ensuring that HMRC is well-informed about your circumstances from the get-go.