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Post Info TOPIC: Sage Payroll Tax Band Details - help!!!


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Sage Payroll Tax Band Details - help!!!


Hi,

I amended my tax bands and bandwidths on Sage Payroll after April and think I may have got it wrong! Tax deductions are really low and I thought it was just adjusting for previous over-payments, however checking on HMRC I think I may have input them wrong and now I think I may have to make big deductions from employees. My payroll screen is as attached. I followed what looked right according to legislation (ie the allowance up to £7475 at 0% then 20% from there up to £35k. How can this not be right???? Hoping someone can help.

 



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Senior Member

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The rates look correct to me.



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Liz Needham FFA FIAB FFTA

Needham Accountancy Ltd



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Oops, no, you're confusing the single persons tax allowances with the tax bandings for taxable income. The bands should be entered as following

£0 to £35,000 at 20% (basic rate)
£35,001 to £150,000 at 40% (higher rate)
£150,001 + at 50% (additional rate)

The single persons tax allowance is £7475 (tax code 747L) which is apportioned over the year and deducted from taxable pay before the above rates are applied. I think you'll need to recalculate past periods. Good luck

Amanda



-- Edited by esPAYonline on Tuesday 5th of July 2011 01:38:00 PM

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Amanda - thank you so much for clarifying. It all made sense as far as the bands go but the numbers were starting to look really odd. i thought i'd been doing it wrong for the last 4 years, but turns out only since i 'corrected' it 2 months ago. Thanks again.

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