Do you pay tax on smp?

[lemontree12]

Just wondering? My maternity pay has been messed up every month, but this month they took 165 off my smp. Does this sound right?

Thanks

 

[LuckyYem]

Personally I didn't this time as I only work part-time and was within my tax allowence. I believe SMP is a taxable benefit though.

ETA: Just checked on the directgov website and it is classed as a replacement of income, not a benefit and therefore taxable.

 

[.Mrs.B.]

Yes, if you've earn't over £9000 since April then it will be taxed. If you haven't earnt over £9000 you shouldn't be paying any tax on it.
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[Sproglet]

Yeah, 165 sounds high unless you earned a lot before you went on maternity.

Best thing is to wait till April then write to HMRC asking them to check your tax, they'll look at the whole year and see if you've paid too much or not. It's hard to tell with just one month's wages.

 

[Sproglet]

Don't forget, tax is usually worked out monthly by employers (so you get around £750 a month tax free), even if you've earned over 9k you might not have used all your tax allowance yet. Otherwise you'd pay no tax at the start of the year and lots of tax at the end.

 

[glitterfly]

Yes it's subject to tax and NI deductions. If you've earned less then your personal allowance for 2012/13 (£8105) then you will get some back at the end of the tax year. (April) it is likely that it could take a few months if you don't apply.

FYI: If you have a student loan and have paid repayments to them yet earned under £16,000 (depending on course start date) you can claim some of your repayments back..

I was paid my SMP in a lump sum before my company when into administration and have been heavily taxed on it. However I will be claiming a lot of it back come April.

Some references:
Personal allowances
https://www.hmrc.gov.uk/rates/it.htm

SMP
https://www.hmrc.gov.uk/paye/employees/statutory-pay/smp-overview.htm

What else can be deducted
https://www.hmrc.gov.uk/manuals/spmmanual/spm21025.htm

 

[glitterfly]

Just wondering? My maternity pay has been messed up every month, but this month they took 165 off my smp. Does this sound right?

Thanks

If they have messed up your SMP have they rectified it in this payslip? If they have paid you more SMP, the pay systems automatically deduct tax so if you have a higher income then you'll have higher tax then normal.
As I posted earlier, if you are under the 20% tax threshold and thereby you have not used more then your personal allowance them you will be able to claim back some of this from HMRC but beware they are just as quick to deduct if you have earned over the threshold but haven't paid enough tax.

Xxx