Mortgage options

[rhtwamley]

Hi there, Recently availed of the Governments Special Incentive Career break for a period of three years. I received my first payment on commencement of the break(quarterly in arrears) but this was rolled in with my last pay slip and I was taxed on the two combined? It came as a bit of a surprise as the amount per annum is ten and a half thousand and I was expecting to pay very little if any tax on such a low amount. Am I entitled to a tax refund? Cheers

 

[deadlyduck]

Don't forget that you are taxed on ALL income earned in the calendar year on a 'cumulative' basis. Therefore, if you have been earning for the first half/ two-thirds of the year you will likely be paying tax on earnings, even though your more recent earnings will be much lower than your earlier earnings.

It's likely that the tax adjustments arising due to your drop in income (you might have been paying tax at 41% earlier in the year if your income was high enough but now with the drop are unlikely to be doing so; hence your average tax rate should decline) will probably be sorted out by your payroll office before December 31.

If in doubt, you can ask the tax office for a 'Balancing Statement' after December 31 for the 2009 tax year.