Introduction to Income Tax and NICs Introduction
5.2
Tax year and tax calendar...................................................................... 36
5.3
Frequency and date of payment ............................................................ 37
5.4
Tax rates and bands............................................................................... 37
5.5
Taxable income ...................................................................................... 39
5.6
Personal Allowances.............................................................................. 39
5.6.1
Marriage Allowance .................................................................................. 40
5.7
Tax codes ............................................................................................... 40
5.7.1
Sources of tax codes ................................................................................ 40
5.7.2
Code suffixes ........................................................................................... 41
5.7.3
Tax code prefixes ..................................................................................... 41
5.7.4
Other tax codes ........................................................................................ 42
5.7.5
The relevance of the numeric part of a tax code ....................................... 43
5.8
Cumulative and non-cumulative operation of PAYE ............................44
5.8.1
Cumulative operation ............................................................................... 44
5.8.2
Non-cumulative operation......................................................................... 44
5.9
Tax tables ............................................................................................... 45
5.9.1
Pay Adjustment Tables............................................................................. 46
5.9.2
Taxable Pay Tables.................................................................................. 47
5.9.3
Operation of the regulatory limit................................................................ 50
5.10
Tax refunds ............................................................................................. 51
5.11
Holiday pay paid in advance.................................................................. 51
5.12 Appendices ............................................................................................. 51 5.12.1 Abbreviations ........................................................................................... 51 5.12.2 Key dates ................................................................................................. 52 5.12.3 Key forms ................................................................................................. 52 Gross to net and the pay statement............................................ 53 6.1 The gross to net stage ........................................................................... 53 6.2 The pay statement .................................................................................. 53 6.2.1 The legal requirements............................................................................. 53 6.2.2 Additional information ............................................................................... 54 6.3 Abbreviations ......................................................................................... 55 Starters and Leavers.................................................................... 56
7.1
Mistimed payments for starters and leavers ........................................ 56
7.1.1
NICs implications ..................................................................................... 56
7.1.2
PAYE income tax implications .................................................................. 58
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