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Posted Thu, 03 Mar 2022 18:52:43 GMT by Jane Knox
We are moving payroll system and have a disagreement regarding the tax treatment of new starts A new start in the previous period, on tax code 1257L wk1/mth 1 Earned £1000 in Feb and earns £2000 in March, paydate 23/3/22 I believe that the total £3000 earnings should be treated as if in March for tax purposes, with 1 x tax monthly personal allowance applied before calculating the tax due The new software provider is saying that since the employee started in a previous period, it is ok to use 2 x tax monthly personal allowance applied before calculating the tax due over the 2 periods I do know that NI and Student Loan are calculated over the 2 periods in this situation, but I did not think that tax is treated like this?
Posted Mon, 07 Mar 2022 12:14:29 GMT by HMRC Admin 19
Hi,

If an employee's code is on a wk1/mth1 basis the individual is only entitled to allowances relating to month 1.

When you pay the employee in March you will continue to use the tax code on a month 1 basis. The pay is not cumulative it is based on the pay for the individual month.

Thank you.

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