UK TAX EXPLAINED// ARE YOU PAYING TOO MUCH TAX?

Summary

In this video, Gloria and Shola, an expert in nursing and finance, discuss important tax-related topics for healthcare professionals in the UK. They cover understanding tax codes, ensuring you're not overpaying tax, and claiming potential rebates for professional subscriptions and uniform costs. Shola also provides valuable advice on navigating multiple jobs, managing tax reliefs, and saving money through salary sacrifice schemes. The video aims to empower nurses to be proactive in managing their taxes, ensuring they make informed decisions to keep more of their hard-earned money, especially during challenging economic times.

Takeaways

• 😀 Understanding your UK tax code is crucial. It determines how much tax you pay, and mistakes can lead to overpayment or underpayment.
• 😀 Nurses and professionals can claim tax relief for things like registration fees and uniform costs. Be sure to check if you're eligible for rebates from the previous four years.
• 😀 If you're on the wrong tax code, especially in the case of multiple jobs, you could be paying more tax than necessary. It's essential to correct it to get a refund.
• 😀 Checking your payslip regularly helps you verify your tax code. If it's incorrect, you can take action to rectify it, potentially getting money back.
• 😀 If you’re working in Scotland, the tax code may reflect local variations, such as specific codes for Scottish residents, so be aware of these regional differences.
• 😀 HMRC provides online resources, and you can also call them directly to inquire about tax rebates or errors with your code.
• 😀 Even if you don’t want to fill out rebate forms, you can call HMRC to check if you're entitled to a refund for previous tax payments.
• 😀 If you're on a visa, claiming tax rebates does not count as 'public funds' and will not affect your immigration status.
• 😀 The current financial climate (recession) makes it even more important to ensure your tax payments are correct and that you're claiming any eligible rebates.
• 😀 To maximize savings, it's important to look for tax-saving strategies such as salary sacrifices, pension contributions, and exploring career advancement options to boost your income.

Q & A

What is the UK personal allowance and how does it relate to the tax code?

The UK personal allowance is the amount of money you can earn before you start paying tax. For most people, this is £12,570. The tax code reflects this allowance. For example, a tax code starting with 1257L indicates that you're entitled to the full personal allowance of £12,570.

How can I check if I'm on the correct tax code?

You can check your tax code by looking at your payslip. It will be listed on the document. If you're unsure about what the code means, you can search online or contact HMRC to verify it. For example, codes starting with 'S' indicate Scotland, and 'L' is a standard code for those eligible for the full personal allowance.

What is an emergency tax code and how does it affect my pay?

An emergency tax code is used when HMRC doesn't have enough information about your income. This results in higher tax deductions because your personal allowance may not be applied correctly. If you're on an emergency tax code, it's important to contact HMRC to correct it.

What are tax rebates and how can I claim them?

Tax rebates are refunds you can receive for overpaid taxes. If you've paid for professional fees, like nursing registration, or if you're eligible for other job-related expenses, you can claim a tax rebate. To do this, you may need to fill out forms or contact HMRC to make sure you're getting back the money you’re owed.

How can I claim a tax rebate for my nursing registration fees?

To claim a tax rebate for nursing registration fees, contact the Royal College of Nursing or the relevant body. You can either fill out a form or simply call them to request a check for previous payments, especially if you've paid for multiple years. HMRC will process your claim if eligible.

What should I do if I have multiple jobs and different tax codes?

If you have multiple jobs, ensure that each job is taxed correctly. Your main job should use your personal allowance, while your second job may have a different tax code or might be taxed at a higher rate. It's important to communicate with HMRC to make sure they have all your income details to assign the correct tax codes.

Why is it important to check your payslip regularly?

Checking your payslip regularly helps ensure that the correct tax code is being used, which directly affects how much tax is deducted from your salary. If you notice any discrepancies, you can contact HMRC to correct the tax code and avoid overpaying taxes.

How can I find out more about my tax code if I don't understand it?

If you're unsure about your tax code, you can search online for a breakdown of tax codes. For instance, codes starting with 'S' are for people in Scotland, and the number attached (e.g., 1257L) corresponds to the amount of personal allowance you're entitled to. You can also call HMRC for clarification.

What financial advice did Shola offer in the video?

Shola advises viewers to make their money go further, especially during tough times like a recession. This includes claiming tax rebates, ensuring you're paying the right amount of tax, cutting unnecessary expenses, and saving money through smart financial decisions.

How can I ensure I'm maximizing my tax efficiency as a nurse?

To maximize tax efficiency, nurses should claim tax reliefs on professional registration fees, uniforms, and other job-related expenses. Also, regularly check your tax code to avoid emergency tax rates and consider making pension contributions to reduce your taxable income.