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Where Taxpayers and Advisers Meet

Tax on Backpay

MRobbins
Posts:1
Joined:Mon Feb 20, 2017 2:09 pm
Tax on Backpay

Postby MRobbins » Mon Feb 20, 2017 2:18 pm

Hi all,

Apologies if this is in the wrong area/section of the forum, relatively new to this so please forgive my (possible) ignorance.

I have recently (1st Feb 2017) had a term time only permanent post which ran from September - September "upgraded" to a full time post. I have been sent an amount from my HR department as I am owed monies from Sep2016 - Feb 2017. My question is two - fold. 1. Is this back pay figure liable to tax? 2. If so, is it taxable with my monthly salary or as a separate payment - e.g. say my salary is £3000 a month, and the back pay amount £1000, do i pay tax on the total £4000 sum. Or, do i pay individual tax on my salary (£3000) and then an individual tax on my back pay amount (£1000). Note figures are not specific to my job or back pay amount.

Any assistance/advice/information on this would be greatly welcomed and much appreciated.

AmanSood
Posts:216
Joined:Mon Jan 09, 2017 4:12 pm

Re: Tax on Backpay

Postby AmanSood » Wed Feb 22, 2017 9:48 am

The £1,000 backpay is still salary and is taxable via the payroll as normal subject to PAYE/NIC withholding. No personal income tax to pay via your self assessment tax return for example..
Advising on UK employment, expatriate and personal taxes
aman.sood@e-taxconsulting.com.
+44 (0) 207 846 0155

SteLacca
Posts:448
Joined:Fri Aug 07, 2015 2:17 pm

Re: Tax on Backpay

Postby SteLacca » Thu Feb 23, 2017 5:25 pm

It isn't treated separately from your usual salary, but is simply taxed with your usual salary in the period that it's paid. If your usual salary is £3,000 and you receive £1,000 backpay, it is simply £4,000 in that month.


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