Week 1/ month 1 Query

[HayleyD]

Hi,

I have started doing the payroll course by distance learning about a month ago.

I am a bit confused, if a tax code changes from an ordinary tax code to a week 1/month 1 will that mean that the person should receive a refund on their first pay day after their change to week 1/month 1.

I hope someone can help me.

Thanks.

Hayley
:? x

[Michael56J]

Hi Hayley.

Confusing isn't it.

No he doesn't get a refund. The idea of Week 1 / Month 1 is that the tax is NOT cumulative. Therefore, no refund is due. You process each week/month as if it's the first in the year, ignoring the previous cumulative figures.

Hope this helps.

Mike

[HayleyD]

Hi,

Thanks for your reply.

I think I understand now.

Hayley
x

[Jodie R]

in 'real life' I can't think of an example of when that would happen though. Employers use the W1/M1 code when they take on a new employee who doesn't provide a P45, so the new employer won't have any cumulative figures to start with, so they wouldn't even know if any tax had been deducted previously which could possibly be repaid!
Once the employee has provided their P45 or the employer has received instructions from the Inland Revenue, the employee will be put on a 'normal' tax code and workings from then on will be made cumulatively.

jodie

[hollers]

"in 'real life' I can't think of an example".

I have experienced this when working for a payroll department. One instance was where the worker had two jobs and the tax code was split between employments. Another one was where the worker had a query with previous years tax collected. And a third was to do with benefit queries.

I'm sure that there are more incidences elsewhere.

Sharon H

[Jodie R]

fair enough :oops:

[hollers]

Jodie, no shame!! I ought to use emicons to 'colour' my tone as I forget that people who don't know me don't know how I sound (a bit dippy at times).

My response was intended to help. I haven't done the payroll qualification but have quite a lot of experience in payroll (amongst other things) and find that dipping into the forums helps to keep me on my toes as I only know what I know. A bit like a technical Johari Window. And what I don't know at the moment is how to put in an emicon........ :)

Sharon H

[Jodie R]

i just felt a bit silly as I had racked my brains to think of when that would happen & couldn't think of anything! I've done payroll for a number of small businesses and never seen it.
Hayley, was that an actual question in your textbook or were you asking hypothetically? It's a long time since I did the AAT payroll...