Commitment Bonus and TAX!
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Join Date: Apr 2009
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Commitment Bonus and TAX!
Hi,
Not sure if this is the right place to ask for advice but I thought i'd give it a go.
Just about to receive my 7 1/2 years commitment bonus, it is £2500, but upon looking at JPA found that I have had to pay around £900 in tax and NI.
My question is, am I able to claim back any of this tax? and if so, how could I go about it?
Any advice would be greatly appreciated.
Not sure if this is the right place to ask for advice but I thought i'd give it a go.
Just about to receive my 7 1/2 years commitment bonus, it is £2500, but upon looking at JPA found that I have had to pay around £900 in tax and NI.
My question is, am I able to claim back any of this tax? and if so, how could I go about it?
Any advice would be greatly appreciated.
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Short answer no - it's not a tax-free bonus, it's treated as income. Am surprised at the figure of £900, which I can only presume is your total tax/NI bill this month because of the bonus - ie. tax from salary too.
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As it's the first month of the tax year a one-off bonus may also have spoofed the payroll system into deducting some tax at the higher rate (40% instead of 20%) because you will have been taxed on the assumption that your pay will have that extra 2500 every month. (That's not anyone's fault, it's just how PAYE works) As your pay goes back to its normal rate this overpaid tax will eventually trickle back automatially in reduced payments over the next month or so.
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Wait! You could get more!
Due to the new regs that came in on 1st April, you may be eligible for £5000 at your 8yr point. Best ask your friendly adminers. Could be quids in......
Last edited by grousehunter; 20th Apr 2009 at 20:57. Reason: sp.....
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Due to the new regs that came in on 1st April, you may be eligible for £5000 at your 8yr point. Best ask your friendly adminers. Could be quids in......
"As it's the first month of the tax year a one-off bonus may also have spoofed the payroll system into deducting some tax at the higher rate (40% instead of 20%) because you will have been taxed on the assumption that your pay will have that extra 2500 every month. (That's not anyone's fault, it's just how PAYE works) As your pay goes back to its normal rate this overpaid tax will eventually trickle back automatially in reduced payments over the next month or so."
I am not so sure that PAYE is that clever and I would recommend the OP looks to do a tax return at the end of the FY if he/she does not normally pay tax at the Higher Rate. Just to be on the safe side
I am not so sure that PAYE is that clever and I would recommend the OP looks to do a tax return at the end of the FY if he/she does not normally pay tax at the Higher Rate. Just to be on the safe side
I don't own this space under my name. I should have leased it while I still could
You should always check you tax paid at the end of the year however PAYE will do a balancing act throughout the year - at least on one salary. Where is fails is where other income is concerned.
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"I am not so sure that PAYE is that clever and I would recommend the OP looks to do a tax return at the end of the FY if he/she does not normally pay tax at the Higher Rate. Just to be on the safe side"
PAYE should be that clever, as long as the code stays on a 'cumulative' (normal) basis but if the code gets changed during the year and gets stuck on 'week1/month1' ('emergency code') then the overpayment will get frozen to the end of the year. Depends how clever the person fidling with the code is! But that's unusual if, as pontius says, you've only got the one steady job, as the OP appears to have.
Whatever, a tax return shouldn't be needed (they're a pain the . . ), and unless you are dealt with under Self Assessment anyway all you need do is send your P60 to your tax office for them to check at the end of the year and they can do a repayment from that.
But, I agree, ALWAYS CHECK, the system isn't perfect!
PAYE should be that clever, as long as the code stays on a 'cumulative' (normal) basis but if the code gets changed during the year and gets stuck on 'week1/month1' ('emergency code') then the overpayment will get frozen to the end of the year. Depends how clever the person fidling with the code is! But that's unusual if, as pontius says, you've only got the one steady job, as the OP appears to have.
Whatever, a tax return shouldn't be needed (they're a pain the . . ), and unless you are dealt with under Self Assessment anyway all you need do is send your P60 to your tax office for them to check at the end of the year and they can do a repayment from that.
But, I agree, ALWAYS CHECK, the system isn't perfect!
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Due to the new regs that came in on 1st April, you may be eligible for £5000 at your 8yr point. Best ask your friendly adminers. Could be quids in......
You're not so lucky I'm afraid. The new regs are for people who have served less than 4 years and have thus far received no commitment bonus.
You're not so lucky I'm afraid. The new regs are for people who have served less than 4 years and have thus far received no commitment bonus.
Anyone got any up to date Gen on this, as I am due my 7.5 year bonus next month. However, from what I have read on an obscure Army DIN (Its JPA, after all, so should apply to the RAF), I would be entitled to £5000 NET at the eight year point under the transitional arrangements because I have only recieved 3000 at my 4.5 year point. Just to complicate matters, I am an ex-ranker and thus will be subject to an ROS anyway. All help welcomed, as I have spoken to the adminers and they deny all knowledge.
If the mods are going to get upset about threads being copied from e-goat this is one of them, see:
Commitment Bonus and TAX! - E-Goat :: The Totally Unofficial Royal Air Force Rumour Network forums
Commitment Bonus and TAX! - E-Goat :: The Totally Unofficial Royal Air Force Rumour Network forums
