5 year money

Discussion in 'Army Pay, Claims & JPA' started by mouth130410, Sep 22, 2006.

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  1. is it true that i can claim the tax back on my 5 year bonus money. I have asked various people and seem 2 get a different answer off everyone including my clerks. Could someone with any pay knowledge please inform me
  2. The following is taken from DirectGov - Tax

    So in short - No you can't!
  3. I thought all my dreams had come true cheers undercrackers :D :D :D :D :D :D
  4. This brings back some memories! This question was often raised when I was in the Army, and I can explain where the confusion comes from:

    As you know the tax year runs from April to March, and you get a set of tax allowances each year - let's say 4k a year.

    In theory if you're on 24k a year you could argue that you should pay no tax in April and May while you use up your allowances, and then tax on all your income for the rest of the year.

    However this means that the tax man would get virtually no money in April, and most people would prefer to spread their tax allowances across the year anyway. To allow this to happen your full year salary is projected based on your earnings to date, so:

    In April he takes your earnings x 12, to give a full year salary projection and calculates the tax due on that in the year. He then multiplies it by 1/12 and that's the tax you pay in April.

    In May he takes your earnings / 2 x 12 to give a full year projection and calculates the tax due on that in the year. He then multiplies it by 2/12 to give the year to date tax due. The tax you have already paid is deducted from this to give May's charge.

    This methodology works well, so long as your salary doesn't fluctuate too much - you pay a fairly even amount of tax each month, and in March they are using your actual salary so it all balances out.

    Where things go wrong is if you are paid a bonus early in the tax year let's take our 24k a year guy who gets a 5k bonus in April. The tax man takes his April wage (5k bonus + 2k salary) and multiplies it by 12 to give a projected salary of 84k a year, and taxes him 1/12th of it in April. This means that he gets a big tax bill in April - if you really earn 84k a year a good chunk of your salary is taxed at 40%

    As the year progresses the calculation self corrects, so in May the tax man would assume your full year salary is 5k + 2k + 2k = 9k / 2 x 12 = 54k and tax you on that etc. This means that you would gradually get back the tax you overpaid during the year by paying less tax, or in the case I've given by getting an automatic tax refund without having to do anything.

    I hope this explains the system - A lot of civilian company's get around this by paying bonuses in March.
  5. 5 year bonus
    Its all lies :x :x
    I had the cheek to join in the wrong year
    I have asked several times (including a letter in soldier mag)
    And i do not get any bonus EVER :x :x :x
    So if you get one take it and run and enjoy what you get :wink:
    Sprogs!!! :x :twisted: :x :twisted: :wink: