Second Job Tax Help

choccy31 · 7 September 2017 at 4:09PM

Hi there,

I am currently looking at wroking a second job for a short period and am really confused about the tax position.

I currently work full time at £30k a year and will be working possibly a second job at approximatly £8844 a year.

Ideally I don't want my tax on my main job to be affected in anyway, so how will i work this exactly and how much tax would i be paying on the second job?

Thanks

agrinnall · 7 September 2017 at 4:31PM

It's likely that you will pay 20% tax on all the second job earnings and 12% NI on part of it. The calculator that I put the figures into makes the net pay in a full year £6993.60.

The key to not affecting tax on your main job is to ensure that HMRC know that the new job is a second one so that the correct tax code is issued, which should be BR (although might start off as being 0T). You need to give answer C on the New Starter Checklist at your new employer.

http://taxaid.org.uk/guides/information/issues-for-employees/employee/form-p46

00ec25 · 7 September 2017 at 7:58PM

as above, the key will be to tell the second job employer that this is your second job

That way your tax code will be set up correctly so you will pay 20% tax on the second tax with no personal allowance (as that has all be "used up" on the 30k job). You won't earn enough between both jobs to hit the higher rate tax bracket so you will pay tax on the second job at the basic rate 20%

NI is slightly different in that the £680.33 tax free allowance (assuming you are paid monthly) is per job, so you will pay 12% NI on the second job on the earnings ABOVE £680.33 per month

choccy31 · 8 September 2017 at 2:22PM

Thanks everyone.

If my main job earnings increases say up to around £36k / £37k during this period, will this have a bigger impact on my second job tax?

Thanks

Dazed_and_confused · 8 September 2017 at 2:38PM

Current tax year you need to be over £43k total taxable income before you start paying 40% tax (£45k outside Scotland) so as second job will be only part year you should be fine.

Likely to be different from April 2018 as you would have full years income from both jobs and the tax free allowance and rate bands will probably change.

Remember it is taxable pay not "salary" which matters, taxable pay is often lower i.e. you have company pension payments deducted before tax. Your payslips should show taxable pay as will your P60.

As agrinnall and 00ec25 have said the most important thing you need to do is make sure you sign the correct starter declaration with your new employer so they operate BR tax code. If you don't do this they may use the emergency tax code which will mean you build up a tax debt to HMRC.

Wookey · 8 September 2017 at 2:52PM

choccy31 wrote: »

Thanks everyone.

If my main job earnings increases say up to around £36k / £37k during this period, will this have a bigger impact on my second job tax?

Thanks

Earnings between 11.5k and 45k you pay 20%, over 45k then you start to pay 40%, there are some further allowances but the vast bulk of the population fall into those criteria. So if your main job pays you 37k for the year and the part time job pays you 8k then you are within the limits and will pay tax at 20%, if the part time job pays you 9k then you would expect to pay 20% on the amounts up to 45k and then 40% on the amount over 45k so roughly £400 on the 1k earned above the higher threshold, that is a fairly simplified version and if other allowances are claimable then it would have an affect on that.

Dazed_and_confused · 8 September 2017 at 3:00PM

Unless you live in Scotland!

choccy31 · 13 September 2017 at 4:14PM

Many Thanks Everyone.

Just waiting to hear now on the second job acceptance and then I guess I will speak to the HR and get them to sort out the coding.

choccy31 · 19 September 2017 at 3:09PM

Got the second job all ok, now just need to work out the tax part with them. Seems unlike my normal job which is montly, they pay every 4 weeks.

00ec25 · 19 September 2017 at 3:32PM

choccy31 wrote: »

Got the second job all ok, now just need to work out the tax part with them. Seems unlike my normal job which is montly, they pay every 4 weeks.

this is very simple:

1. you inform HR /payroll that this is a second job by ticking option C on the new starter checklist
https://www.gov.uk/government/publications/paye-starter-checklist

2. HR/payroll will therefore give you tax code BR on the basis you have a "first" job which totally uses up your personal allowance so every penny you earn in your second job should be taxed at 20% as you do not have any tax free personal allowance remaining to allocate to job 2

3. at the end of the tax year HMRC's computers will see if your total gross earnings for that tax year were above the higher rate threshold (£45,000). If they were, HMRC will replace your BR code with a D0 code as that taxes your second job at 40%, not 20%, so you will then pay the "correct" rate of tax on your second job. Your first job will be unaffected since you will continue to have a cumulative code on that one and its earnings will be less than 45k gross

[Deleted User] · 19 September 2017 at 4:16PM

00ec25 wrote: »

this is very simple:

1. you inform HR /payroll that this is a second job by ticking option C on the new starter checklist
https://www.gov.uk/government/publications/paye-starter-checklist

2. HR/payroll will therefore give you tax code BR on the basis you have a "first" job which totally uses up your personal allowance so every penny you earn in your second job should be taxed at 20% as you do not have any tax free personal allowance remaining to allocate to job 2

3. at the end of the tax year HMRC's computers will see if your total gross earnings for that tax year were above the higher rate threshold (£45,000). If they were, HMRC will replace your BR code with a D0 code as that taxes your second job at 40%, not 20%, so you will then pay the "correct" rate of tax on your second job. Your first job will be unaffected since you will continue to have a cumulative code on that one and its earnings will be less than 45k gross

I am not sure that you are correct on the last bit (from personal experience:)) HMRC won't tax all of the second earnings at 40% - it would not be appropriate if only a small part was liable at 40%! If the op earned 37k and 9k he would be overpaid £1600 on a D0 code on the second job.

In my experience they will leave the second job at BR and review. Unfortunately for the op they will restrict the PA at the main source to prevent repeats.

Second Job Tax Help

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