Jump to content
House Price Crash Forum
Sign in to follow this  
aclwalker

Tax Avoidance (not Evasion).

Recommended Posts

In an idle lunch hour I decided to get my payslip out and work out if the tax and NI were correct or not. I noticed that my tax code was wrong so the exercise has been worthwhile so far!

Anyway, I couldn't quite get the tax and NI to work out exactly to what was on the payslip.

I looked closer on the HMRC website and discovered that there are two ways that employers can work out NI contributions. Firstly they can do the exact percentage method or they can use a table lookup method. The exact percentage method is a bit of a pain because the allowances are quoted weekly, so you have to convert this to monthly (which isn't a simple x4 calculation, of course).

I had used the exact percentage method which was out by 20p or something. I then used the table method and got it to work out exactly. Guess which method results in paying more NI? Yes, the tabular method. Essentially the £94 a week threshold works out as £408 and x pence, whereas the tabular method is rounded DOWN to £408 (not sure if figures are exactly correct here, but it illustrates the point anyway). This rounding down means that you are robbed of a small part of your non-NIable allowance every month, which of course benefits Brown.

As for the tax, I realised that my incorrect tax code was meaning that I'm paying more tax than I should, but even taking this into account, I couldn't get it to work out exactly. I know that they drop the last digit, so I tried all 10 different final digits for my allowance and still couldn't get it to work out. I couldn't find any mention of a tabular method of working out income tax.

Anyway, this NI rounding down thing looks like another (albeit minor) stealth tax.

Does anyone have any clue as to where I could be going wrong with the tax? I have used this years allowances and rates but I still get it to be 20p or so out (in Brown's favour, of course).

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.