We have an employee who earns more than £ 50,000 and we are trying his tax code source is P46.When we are trying to put the tax code as 0T,system by default changes in to BR tax code.
Is the system behaving correctly in this case..Will there be any impact on tax calculation as BR code applies 20% tax band but this employee should be charged more than 20% as hisearnings is more than 37K.
Can anyone please suggest...
Thanks in advance...
Please note that the tax calculation for UK payroll is done based on the tax code as maintained in IT0065 ,.
Also please note the following :-
Code 0T u2013 This code is used cumulatively with no pay adjustment and all pay is taxed according to the relevant rate dependent on the level of earnings
Code BR - This code means that all the employeesu2019 pay is liable to basic rate tax and there is no pay adjustment allowed
Tables T5G01 and T5G02 are then used by payroll for tax calculation.
Hope this helps