Right i know this is a minefield but ive tried ringing the tax office but i'll be retired by the time i get to the front of the queue.

I started back to work in March, i havent worked for a few years due to raising children, anyway im only part time and my tax code is 647l, from what ive been told this means i can earn £6470 before tax is paid!! is this right???

Anyway i havent earned that much yet but im already paying tax, not much but im still paying it, i know its not anything major but id just like to know.

So if there are any people out there that know more than me on this topic id be grateful.

> Anyway i havent earned that much yet but im already paying tax, not much but im still paying it, i know its not anything major but id just like to know.
>

If on your current wage by the end of the tax year you will have earned more than the tax allowance then you are taxed on the amount you are projected to earn over that.

If your job ended before the end of the tax year and you had no income (benefits count towards your tax allowance) then you would get a refund.

Ah thanks,

well my partner has always worked and i wasnt claiming any benefits other than tax credits, and according to this website they are non taxable.

http://www.direct.gov.uk/en/MoneyTaxAndBenefits/Taxes/BeginnersGuideToTax/IncomeTax/IntroductiontoIncomeTax/DG_078305

that if im reading it right which is always debatable

Yes - as Brainless said -if the amount you are expected to earn from your current wages will be above the amount of your tax allowance then the excess is divided into the appropriate number of weeks/months and deducted at each pay period.

So as a very rough example if you were paid monthly and earnt £1000 per calendar month then your expected earnings for a year would be £12,000. If you take the £6741 allowance from your from £12,000 you get £5259 and this is the amount that you would pay tax on. The £5259 would be divided by 12 - for the 12 months - and you would pay tax on anything you earnt above £438.25 per month.

If you were not able to give your new employer the form showing your correct tax code when you first started working for them - P45? - your employer would have to put you on emergency tax which is a higher rate than normal and you would get the excess you have paid refunded to you once your employer has received the form telling them your correct tax code.

The above is a rough guide in a very simple form and there may be other allowances etc that will affect the rate of tax you pay - and of course tax matters are never very simple :-)

Tax Code 647L allows you to earn £6475 free pay per year (no tax paid) this is broken down into weeks and months. You can earn £124.50 per week (or  £539.58 per month) without paying tax any pounds over £124.50 will be liable for 20p worth of tax.

It may be worth checking if your code has any other letters after it. If your code has W1 (week 1) or M1 (month1) this is actually emergency tax code and should be changed as you would not get the benefit of all your tax free allowances.

Hope that simplyfys it a bit.

As you started in March you should not be on a month /week 1 code as this is automatically dropped at the start of the new tax year on 6th April. If you are on the 647L you must be making over the amounts the OP stated each week or month.
A 647L code is known as a cumulative code and as such the figure tax is worked out on cumulates each week/month and unfortunately tax has to be paid if you make over the limits.
The direct gov website gives more details and is easier to understand than HMRC site which tends to be more technical.

Yes that right but its spread over 12 months you get an allowance each month and it does mean you always know what your tax is.