I'm from New Zealand and just started working here in the UK in July 2016 on a 2 year working holiday visa. My partner and I both started working around the same time (different employers), however I noticed that the deductions on our pay slips were immediately different, despite being on a similar hourly rate (note that we are also on the same visa).
Tax and NI were deducted from my payslips immediately, whereas his employer started deducted NI, but no tax at all for the first few months. I did a little research and discovered that we are entitled to a £11,000 tax free allowance. His employer opted not to deduct tax until he reached £11,000 income threshold, then started taxing at 20% thereafter.
However my employer started deducting income tax from my first payslip, but have also informed me that they have been using the correct tax code, therefore my taxes should be correct and I am unlikely due a tax return in April.
So how does this work? Why didn't my employer start taxing me until after I reached £11,000 income. And since they didn't, why would I not be due a refund for all of all taxes I paid during that period? Very confused to say the least!
We are leaving the country in June to return home for good, so overall I would have been working for less than a year by the time we go. Would love to understand what this all means before we leave!
Could someone please explain this to me in layman's terms, as I am finding it really difficult to understand the UK tax system.