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Where Taxpayers and Advisers Meet

Recent f graduates

Posts: 1
Joined: Wed Aug 06, 2008 3:30 pm

Postby textiles » Sat Oct 15, 2005 12:58 am

I have recently graduated from university and am in full time (temp) employment. Two friends of mine informed me that they only pay NI as their accoutant told them that they do not pay tax on the first £5000 they earn after leaving uni, but I am getting charged tax! who is right?

Simon Sweetman
Posts: 1690
Joined: Wed Aug 06, 2008 3:11 pm

Postby Simon Sweetman » Sun Oct 16, 2005 1:10 am

You pay tax on the income you earn in a tax year, so if you are working now you are likely to earn well over £5000 by 5 April 2006. The personal allowance is a little less than £5000.

At the start of employment you might well not pay tax for the first month or two, because the PAYE system works cumulatively. So if you first worked in October and earned £1500 a month you would probably not pay tax for the first two months.

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