"Tim" wrote
Similarly, the PAYE system could be enhanced to cope with
the situation of two employers. But it hasn't been. So what?

"Andy Pandy" wrote
Yeah, how exactly? Please explain. I've explained exactly
how it could have been enhanced to cope with the CTC, you
explain how it could be enhanced to cope with two employers.

How tedious. Well, as you're having trouble thinking clearly, try:

Instead of simply one "tax code" for each employer for each taxpayer, keep a
number for each "earnings slice" for each employer.

Currently, this will be (say) A1 for the part of the nil-rate band allocated
to employer1, A2 for the part of the nil-rate band allocated to employer2,
B1 for the part of the 10%-rate band allocated to employer1, B2 for the
part of the 10%-rate band allocated to employer2, C1 for the part of the
22%-rate band allocated to employer1, C2 for the part of the 22%-rate band
allocated to employer2, and so on.

You'll always have A1+A2 (+A3+A4...) = 4745 (current tax year), B1+B2
(+B3+B4...) = 2020, etc etc.

The Inland Revenue allocates the amounts A1,B1,C1,A2,B2,C2 etc to each
employer just as they allocate tax codes today - but with fuller information
from each employer as to earnings (updated whenever necessary), so as to
make best allocation of allowances.

How's that?


"Tim" wrote
Again, the above is simply not true (not for everyone
at least). The tax code was changed if you had a
beneficial (low-rate) mortgage from your employer.

"Andy Pandy" wrote
Yeah, well done, you've found an odd situation where what I wrote didn't
apply.

Exactly. So don't say "anyone"!

"Andy Pandy" wrote
But anyway MIRAS was abolished before the CTC was
introduced so in the time period we were discussing it was irrelevant.

Errr - let me remind you what *you* said :-

"Andy Pandy" wrote
Anyone getting MIRAS after the rate was restricted
wouldn't have had it affect their tax code at all ...

In other words, you were considering the "period since MIRAS was
estricted" -- *NOT* "the period after CTC was introduced"!!
You can't change the goalposts just to try to win the argument!

"Tim" wrote in message ...
Yeah, how exactly? Please explain. I've explained exactly
how it could have been enhanced to cope with the CTC, you
explain how it could be enhanced to cope with two employers.

How tedious. Well, as you're having trouble thinking clearly, try:

Instead of simply one "tax code" for each employer for each taxpayer, keep a
number for each "earnings slice" for each employer.

Currently, this will be (say) A1 for the part of the nil-rate band allocated
to employer1, A2 for the part of the nil-rate band allocated to employer2,
B1 for the part of the 10%-rate band allocated to employer1, B2 for the
part of the 10%-rate band allocated to employer2, C1 for the part of the
22%-rate band allocated to employer1, C2 for the part of the 22%-rate band
allocated to employer2, and so on.

You'll always have A1+A2 (+A3+A4...) = 4745 (current tax year), B1+B2
(+B3+B4...) = 2020, etc etc.

The Inland Revenue allocates the amounts A1,B1,C1,A2,B2,C2 etc to each
employer just as they allocate tax codes today - but with fuller information
from each employer as to earnings (updated whenever necessary), so as to
make best allocation of allowances.

How's that?

3/10

Too much information would need to be exchanged throught the tax year. Far too
bureaucratic. If both pay days are at the same time (many companies pay on the
last day of the month) then there probably won't be time for the necessary
details to be exchanged. If one employer pays a big year end bonus/overtime
payment on the last payday in the tax year they could end up paying too much tax
as they may enter a higher tax band while wasting part of a tax band in the
other job.

"Tim" wrote
Again, the above is simply not true (not for everyone
at least). The tax code was changed if you had a
beneficial (low-rate) mortgage from your employer.

"Andy Pandy" wrote
Yeah, well done, you've found an odd situation where what I wrote didn't
apply.

Exactly. So don't say "anyone"!

"Andy Pandy" wrote
But anyway MIRAS was abolished before the CTC was
introduced so in the time period we were discussing it was irrelevant.

Errr - let me remind you what *you* said :-

"Andy Pandy" wrote
Anyone getting MIRAS after the rate was restricted
wouldn't have had it affect their tax code at all ...

In other words, you were considering the "period since MIRAS was
estricted" -- *NOT* "the period after CTC was introduced"!!
You can't change the goalposts just to try to win the argument!

I've already congratulated you on your stunning victory on this point (see
above). Not that I want to pour cold water on it or anything, but the fact
remains it wasn't applicable to the relevant time period we were initially
discussing.

--
Andy

"Tim" wrote in message
...
"JethroUK©" wrote
but they are unwritten rules (only way to find
out these "rules", is when you are affected)

"Tim" wrote
Really? Are you sure about that??


"JethroUK©" wrote
absolutely positive - have you ever
seen any mention in the adverts - nope !

I wouldn't expect to see that kind of detail on the adverts. Did you?

Did you look on the IR website? Did you read any literature/leaflets
produced by IR??

"JethroUK©" wrote
- you will see lots of posts here from people that dont realise that
Tax Credits may have to paid back (unlike any other form of benefit)

There are many things that many people don't realise - that doesn't mean
that you cannot find out those things if you look in the right places.


"JethroUK©" wrote
say income tax paid by the month you born in
Jan pay nothing
Feb pay 10%
Mar pay 20%
Nov & Dec pay 100%
because that's about the size of it

"Tim" wrote
Now you're just being silly.

"JethroUK©" wrote
No sillier than the current Tax Credit system that pays anything
from 100% to 0% dependant [solely] on where abouts in the
tax year you claim (might as well be the month of your birth)

No, they depend on your earnings during the tax year.

precisely (needs are not governed by the tax year)

Just like, for
instance, tax allowances do.

but tax allowances are ongoing (just like a gas bill, doesn't matter from
quarter to quarter what you pay because it's always balanced at the end)

Tax credits are not ongoing & that's the difference

Scenario:

Working Couple earn £15k.p.a (7.5k each) - one of the couple is out of work
for exactly one year (income reduced to 7.5K makes them eligible for tax
credit approx £65ish week = £260ish month)

Scenario in April
Couple get £260 month for one whoooooooooooole year £3120 - starts new job
disqualifies for Credit comes off system

Scenario in May
Couple get £260 month for 12 months - one month clawed back against new job
in new tax year = £2860

June
Couple get £260 month for 10 months £2600

July
£2340

ditto

ditto

March!
entitlment of £260 (which [will] be clawed back following april, due to
joined income of £12.5k+ (1 full salary + 1 half-year salary)

same couple remember - in exactly the same situation - bar the month it
started

Should state help vary from £3120 - £0 depending on where abouts in the
fiscal calander, your needs arise

"JethroUK©" wrote
No sillier than the current Tax Credit system that pays anything
from 100% to 0% dependant [solely] on where abouts in the
tax year you claim (might as well be the month of your birth)

"Tim" wrote
No, they depend on your earnings during the tax year.
Just like, for instance, tax allowances do.

"JethroUK©" wrote
but tax allowances are ongoing (just like a gas bill, doesn't matter from
quarter to quarter what you pay because it's always balanced at the end)

You obviously haven't thought about it properly.

Suppose you usually earn around £10Kpa, but for one period of 12 months you
get a special project which pays £50K for the year.

Now, if the project starts in October then you earn £5K Apr-Sep, £25K
Oct-Mar - a total of £30K for that tax year. You'll pay income tax at a
marginal rate of 22% on the extra earnings.
Following tax year: you earn £25K Apr-Sep, £5K Oct-Mar - again a total of
£30K for that tax year, still 22% marginal income tax.

Now suppose that the project had instead started in April. The previous tax
year you earned £5K as usual, and the following tax year you'll earn £5K
again as usual - so no change there. But for the year of the project, you
earn £50K. That clearly puts you into the high rate tax bracket - 40%
marginal income tax.

"JethroUK©" wrote
same couple remember - in exactly the
same situation - bar the month it started

In my example: "same person remember - in exactly the same situation - bar
the month the project started".

"JethroUK©" wrote
Should state help vary from £3120 - £0 depending on
where abouts in the fiscal calander, your needs arise

In my example: "should the state total income tax-take over the period vary
from 22% marginal to 40% marginal depending on whereabouts in the fiscal
calendar, the special project started" ??

"Andy Pandy" wrote
Too much information would need to be exchanged throught the tax year.
Far too bureaucratic.

(1) That may be why it hasn't been introduced
(2) No-one said it would be easy!
(3) You could get a very good approximation by guessing the earnings
up-front, and only need to adjust the proportions A1,B2 etc if it becomes
necessary.

"Andy Pandy" wrote
If both pay days are at the same time (many companies pay on the
last day of the month) then there probably won't be time for the necessary
details to be exchanged.

Most of the time, they wouldn't need to be. [See below.]

"Andy Pandy" wrote
If one employer pays a big year end bonus/overtime
payment on the last payday in the tax year they could
end up paying too much tax as they may enter a higher
tax band while wasting part of a tax band in the other job.

That would be a very unusual case. Projected total earnings would need to
be *close* enough to the next tax threshold, that they may go over if an
unexpected extra payment were made. But also they'd need to be *far* enough
away from the next tax threshold, that you're not sure which employer should
be allocated (the bulk of) the remaining part of the current tax band.

You could always add another procedure to the PAYE system, that on the first
payday of any tax year (after previous tax year's total earnings are now
fully known), any required adjustment is made to allow for the small
descrepancies caused by the last payday of the previous tax year - putting
everything right.


"Andy Pandy" wrote
I've already congratulated you on your stunning victory on
this point (see above). Not that I want to pour cold water
on it or anything, but the fact remains it wasn't applicable
to the relevant time period we were initially discussing.

It also wasn't relevant to the time period I'm thinking of now. ;-)
But then both of those are irrelevant - you changed the relevant time period
when you said "... after the rate was restricted".

"Tim" writes:

In my example: "should the state total income tax-take over the period vary
from 22% marginal to 40% marginal depending on whereabouts in the fiscal
calendar, the special project started" ??

So maybe the whole system needs changing to abolish tax (and other
financial) years and always work on a "rolling" basis. So that income
tax calculations would become something like:-

If total income (including this pay, whether it be weekly, monthly,
or any other interval regular or irregular) over the previous 365
days is £X then the total tax due for this period is £Y, so if you
paid £Z tax in the previous 365 days then this payday you have to pay
£(Y-Z) income tax.

This should be easy for a computerised system to implement, and should
not be much more difficult for a manual system.

"Tim" writes:
In my example: "should the state total income tax-take over
the period vary from 22% marginal to 40% marginal depending on
whereabouts in the fiscal calendar, the special project started" ??

"Graham Murray" wrote
So maybe the whole system needs changing to abolish tax
(and other financial) years and always work on a "rolling" basis.

Interesting idea!

"Graham Murray" wrote
So that income tax calculations would become something like:-

If total income ... over the previous 365 days ...

Why stop at 365 days? Why not full lifetime earnings??!

"Graham Murray" wrote
... is £X then the total tax due for this period
is £Y, so if you paid £Z tax in the previous 365 days
then this payday you have to pay £(Y-Z) income tax.

Have you considered what would happen under your scheme to the tax paid in
the example of the person usually earning £10Kpa but then getting a special
project paying £50K over 12 months?

Let's assume they have been grossing £833 each month for the past 12 months,
and paying tax of £76 each month (but see note below showing that this
wouldn't usually happen in practice).

When they first start earning £4167 each month, they'll initially just pay
22% of the extra £3333 in tax, giving £809 each month tax - because they
haven't yet become a high rate taxpayer (where the basis is over the

previous 12 months). After about 8 months they'll cross the high rate tax
band and start to pay 40% on a chunk of their earnings, and the tax will be
£1409 each month.

At the end of the 12 month 'special project', they have earned £50K in the
past 12 months and paid £12,208 tax, as you would expect - but it was not
even over the year (much more tax paid in last few months and much less

paid in the first months, even though the gross pay was even). [Problem ?]

Now things start to get interesting. When their pay falls back to £833 each
month, you'll see that they've actually paid more tax in the last 11 months
than would be correct for those 11 months *plus* the new one - so

they'll actually get a tax refund that month (£524)! That'll continue for a
few months, until the tax will increase over a few months in the middle of
the year to an amount of £676 each months for the last few months

(that'll only give them less than £160 to live on per month for the last 4
months of the year). [Problem ?]

Then every year thereafter, if they continue to earn £833 each month, their
tax will cycle through £524 refund, £524 refund, £524 refund, £524 refund,
£18 refund, £76 tax, £76 tax, £170 tax, £676 tax, £676 tax, £676 tax,

£676 tax. Overall each year they'll pay £914, which is correct, but it
won't be even across the year at all!!

---------------
Note:

Anyway, what happens when someone first starts a job? The tax would quite
easily be zero in the first month, because they've earned nothing in the
last 11 months and the first month's pay is likely below the (annual) tax

allowance.

In the case of the person starting to earn £10Kpa (£833 each month), the
monthly tax amounts would be: £0, £0, £0, £0, £0, £26, £83, £83, £172, £183,
£183, £183. The correct annual tax of £914 will be taken overall, but

much less initially and much more later [note that £83 is exactly 10%, and
£183 is exactly 22%]. Once this pattern has been set up, it will then
continue indefinitely (even though they continue to earn exactly the same

amount each month!).

One can borrow Payday Loan so because it is short term loan so you will have to pay low taxes.