Just reading an old letter from HMRC about my 2015/16 Tax Code (1060L) and I understand that my tax-free personal allowance is £10,600 but it also says something along the lines of
"We normally split your tax-free allowance into monthly or weekly amounts. This means you can get about £868 a month or £223 a week before your employer takes tax off you.
I always thought you could go through a tax year without being taxed a penny, until the moment you went over your personal allowance. However the bit in blue from the letter suggests otherwise.
I work part-time and wouldn't earn more than £868 in an ordinary month, but if I did any overtime I could quite easily go over the threshold.
My question is, say if in any one month I earned £968 would I...
a.) get taxed the basic rate (20%) on all £968
b.) get taxed the basic rate on the additional £100 only
c.) not get taxed at all providing I had not yet gone over my personal allowance
d) other
"We normally split your tax-free allowance into monthly or weekly amounts. This means you can get about £868 a month or £223 a week before your employer takes tax off you.
I always thought you could go through a tax year without being taxed a penny, until the moment you went over your personal allowance. However the bit in blue from the letter suggests otherwise.
I work part-time and wouldn't earn more than £868 in an ordinary month, but if I did any overtime I could quite easily go over the threshold.
My question is, say if in any one month I earned £968 would I...
a.) get taxed the basic rate (20%) on all £968
b.) get taxed the basic rate on the additional £100 only
c.) not get taxed at all providing I had not yet gone over my personal allowance
d) other