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Payment change part way through the year

 
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Posts: 6
 Checkit
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Topic starter
Jul 03, 2024 5:10 pm
(@checkit)
Active Member
Joined: 2 years ago
If someone was correctly paying direct CMS based on providing payslips with £40,000 salary, but by the next annual calculation they earned in the previous tax year £33,000 so their payments automatically dropped. But also by that calculation they now had a salary of £46,000, would the CMS do a recalculation part way through the year to make the person pay more?
 
Note the person is only paying based on what they earned in the latest tax year available, so in a year or so time, they will then have the payments based on the £46,000 tax year.
 
The problem is the drop in salary/payments, but already back to an even higher salary during the lower salary's calculation year.
 
Hope this is clear, let me know if not. 
 
 

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Posts: 5565
 DadMod2
Jul 04, 2024 8:51 am
(@dadmod2)
Illustrious Member
Joined: 7 years ago

hi, CMS have a 25% threshold policy. if your income increases or drops by 25% or more, your expected to report this change to CMS at any point in the year.


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 Checkit
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(@checkit)
Joined: 2 years ago

Active Member
Posts: 6
Jul 04, 2024 3:11 pm
Reply to DadMod2

@bill337 the income hasn't increased at any 1 time by 25% though. £40,000 to £46,000 is 15%. 

 

It's just the drop in salary one year has the calculation at a lower payment. 

 

What could happen?


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 DadMod2
(@dadmod2)
Joined: 7 years ago

Illustrious Member
Posts: 5565
Jul 04, 2024 7:15 pm
Reply to Checkit
   DadMod2

@checkit not sure. You can ring CMS and ask them to explain.


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