Pregnancy & Birth Clubs <
28/06/2013 at 15:23
I know I’m thinking way in advance but there is reason, we are trying to decide whether to go ahead with our plans to go to Florida in August next year, but money is tight and this is one thing I can’t seem to work out. It’s been booked but we haven’t put our deposit down yet which is why I’d like to figure this out sooner rather than later.
I know that you are still entitled to the car for ML, but what I can’t seem to find out is how you are taxed on it. My car + fuel comes in at around £95 per month in tax, so will I still pay that level of tax through my ML? Or does it not work like that at all?
I’ll be starting my ML at the end of Feb so near the end of the financial year, don’t know if that makes a difference?
Short of ringing the tax office, I can’t seem to find out. Does anyone know or could point me in the right direction? £100 odd pounds a month off my maternity pay would definitely end our holiday plans to be honest, as we’d need that money to cover the massive shortfall every month.
28/06/2013 at 16:13
Your tax will depend on a number if things. Are you usually a higher rate tax payer or a basic rate tax payer? If you go on ML at end of Feb, how long will you be off for and will it be just statutory maternity pay you get or enhanced? For example if you are usually a higher rate tax payer but for the next tax year you become a basic rate tax payer due to matenity pay then you will be taxed less on your car. I will try and get back on later and expand a bit more.
28/06/2013 at 16:22
Pretty much wss. It's entirely dependant on which tax band you fall into on ml. Presumably you won't be getting fuel so that bit won't be payable. I'm higher rate just about but the 2 months I'm on statutory mat pay should just bring me under so those months I'll be paid less. We get a generous mat pay of 18 weeks though.
28/06/2013 at 18:08
No idea sorry but did i miss your BFP?! Congratulations ob! Xx
28/06/2013 at 20:04
Sorry I'm late back to this! I'm a basic rate tax payer and I have the car and private fuel benefit.
We get statutory maternity pay, 6 weeks at 90% rest at SMP. I'll be hoping to take 9 months off.
Thanks Willow :)
28/06/2013 at 20:10
I missed your bfp as well! Massive congratulations!
28/06/2013 at 21:21
Thanks pip x
28/06/2013 at 22:30
In that case you may well drop into starting rate ie not pay any tax on it, depends how much the car is worth as a benefit in kind.
29/06/2013 at 00:36
Ahh I did know that! Can’t remember the exact figures but it was between 5 and 6 thousand for the car and fuel.
So is it the value of the car and fuel, plus everything I will earn on SMP, and I only pay tax on whatever goes over my personal allowance? Will it be corrected at the end of the next year or will I pay much less tax month to month?
Sorry for all these questions, I just can’t seem to get my head around it!
29/06/2013 at 08:54
I have realised that it's so hard to work it out! I thought I had it all sorted on my lovely spreadsheets, then I got paid this month and got paid an extra week because maternity is paid weekly and there are 5 sundays in June, even though I've only finished work yesterday. My employer gave me a gross list of what I'd get paid each month but told me they cant work out the tax because it will adjust through the time I'm off as my wages go down (I get extra from my employer to SMP). If I were you I'd work on worst case scenario, save as much as you can until you finish then you'll probably be ok.
29/06/2013 at 12:32
Awe congratulations OB :) x
30/06/2013 at 07:06
Hey OB, the benefit in kind for your car is deducted from your personal allowance so your PA is then reduced from the start of the tax year and your get the reduced value as your tax free earnings. The standard PA is 9440 so if you have say £5k deductions for your car, this means your can earn £4440 this tax year before you start paying tax. With what your saying you get for mat leave you will earn that (remember your mat leave will fall over two tax years so will be sort of offset in terms of earnings/tax by the months you've been working full time). So essentially you will still pay your tax. Obviously your tax will go down in month but that will be in line with your reduced income when on mat leave and getting the stat mat pay. I don't get fuel benefit, so not sure if that will change any, but this would be reported in your P11d and wouldn't be picked up until the end of the tax year and adjusted retrospectively.
Should have said, if you have any other benefits in kind (reduced rate mortgage, loan, free medical cover etc) your PA will be lower than the above.
01/07/2013 at 10:46
Thanks Lamby and PC.
MDD, thank you for the info, I sort of get it, still have no idea on actual monthly figures. Such a pain!
01/07/2013 at 11:29
I know *nothing* about tax, but just wanted to say I'd missed your bfp too! Congrats x
01/07/2013 at 11:40
Thanks BW :) x
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