The Cine Technician (1943 - 1945)

THE CINE-TECHNICIAN January — April. 1944 "PAY AS YOU EARN" INCOME TAX We are grateful to the Income Tax Advisory Bureau of the Inland Eevenue Staff Federation for the following notes : — 1. The " Pay as You Earn " system is intended to arrange tax deductions to fit the pay. When pay goes up, tax goes up ; when pay goes down, tax goes down; when pay stops (through sickness or unemployment) tax will be refunded. 2. The tax deducted by employers will be the tax due for the year as near as it is possible to work it. For the ordinary worker the largest undei'-deduction is not likely to be more than 26s. in the year — or sixpence a week. Over-deductions will be much smaller in most cases. 3. At the end of the year, i.e., some time in 1945, an assessment will be made by the Tax Office, and a notice sent to the taxpayer shownig ins exact liability and how much he has underpaid or overpaid. Over-payments will be refunded, and under-payments will be collected with a later year's tax. 4. To achieve this result a good deal of simplification has become necessary. The employer will be given a set of Tax Tables by which to work out the tax, and an official Tax Deduction Card for each worker. This card will show the worker's Income Tax Code number, but it will not show any details as to how the Code number has been arrived at. These details will go only to the individual taxpayer on his " Notice of Coding." 5. These Notices of Coding were issued all over the country in the last fortnight of January. If they are wrong it is important that an appeal be made at once so that the Tax Office can correct the coding before sendin the Tax Deduction Cards to the employer. Wherever possible in large factories, arrangements have been made for someone from the Tax Office to attend the works to deal with appeals, and thus save writing letters or calling at the Tax Office. If no such arrangements are made, Trade Union officials can ask for a speaker from the Tax Office to address a Branch meeting or any other gathering at which general points can be explained. If in any exceptional case there is some difficulty in securing a speaker for a Branch meeting, reference might be made to the Income Tax Advisorv Bureau, I.R.S.F., 7 and 0, St. George's Square, S.W.I, (which is, of course, an unofficial body) and we may be able to help. 6. The notice of coding is similar to the familiar notice of assessment. There are printed entries for all the usual allowances, and it is not proposed to go into detail about these, but only to mention those which are different from previous years. 7. Housekeeper Aliowance is now extended to any case where a housekeeper is maintained to look after a child. No allowance can be claimed for an " unmarried wife," unless child allowance has also been given. 8. Dependent Relative Allowance is increased to £50 maximum on a sliding scale. The rule is to deduct the dependent's total income from £80, and the difference is the allowance subject to the £50 maximum. If two or more people contribute to the dependent, the allowance must be shared, and, of course, the allowance won't exceed the amount of the contribution to the dependent, i.e., if a man sends 5/ a week to his aged mother living somewhere else, he is not entitled to more than £13 a year allowance. 9. Life Insurance is allowable at 3/6d. in the £. As the Tax Tables issued to the employers only deal with tax at 6/6d. in the £, and 10/ in the £, the Life Insurance is halved, and included with the Personal allowances. This means that instead of getting £2 at 3/6d. = 7/ tax. the ordinary worker gets £1 at 6/6d. This obviously doesn't make any difference to the weekly deductions, and any little adjustments will be cleaned up at the end of the year. (See Note 3.) 10. A few workers have dividends from which tax is deducted at 10/ in the £, (Notably Copartnership stock in the G-as Industry). If the worker is only liable at 6 6d. in the £ he gets an allowance for the extra 3 (id. This again is done by halving the dividend, ami adding it to the allowances. The result is £1 at 6/6d. instead of £2 at 3 6d.— another tiny difference for the end of year adjustment. 11. The Tax Tables sent to the employers are worked out on the basis that everything is earned income. But some items such as expenses, superannuation, interest, payments and payments to wives under Court Orders ««i