"splitting" the tax free allowance?

insurgente

hello all. sorry if this is a repeat post, but I had a quick look and couldn't see anything that quite answered my question.

Basically I'm working 2 jobs right now; one full time and one part time. I've only been in the country and few months so working up to now I haven't made £6035 this year. As a result, I haven't been paying tax on my 'main' job. I started working a second job on the side, and obviously as I hadn't finished my main job, i couldnt provide them with a P45... on the second job I'm on basic rate tax (which is somewhere around 20%?) despite the fact that put together, I haven't made anywhere near the 6035 threshold.

So what I'm wondering is; should I be paying tax on the second job? I've got varying answers from the tax people. The nationwide line told me that I can 'split' the tax free allowance; as my main job is 37.5 hours a week and the second job around 13, I could divide the 6035 correpondingly. However, when I rang my local tax office, they told me that the 6035 wasn't a threashold amount (i.e. that I earn up to that cut off before paying) but infact it's spread out over the course of a year... which made me immediately panic that they were going to demand back taxes for the past few months I've been working.

So can anyone enlighten me as to the reality? Is it possible to claim it back or should I forget about it? Thanks all

insurgente

Oh yes, also I'm finishing my main job next friday (it was only a 3 month contract, so i don't see how the tax people can average that out over a year)... if I give my new P45 to my other employer, would I be able to claim back the tax I've already paid?

jem16

insurgente wrote: »

So what I'm wondering is; should I be paying tax on the second job? I've got varying answers from the tax people. The nationwide line told me that I can 'split' the tax free allowance; as my main job is 37.5 hours a week and the second job around 13, I could divide the 6035 correpondingly.

Yes you can do this if your main job utilising the tax code is earning less than £6035 over the WHOLE tax year.

However, when I rang my local tax office, they told me that the 6035 wasn't a threashold amount (i.e. that I earn up to that cut off before paying) but infact it's spread out over the course of a year... which made me immediately panic that they were going to demand back taxes for the past few months I've been working.

That is also true. The amount is spread out over the year. You get a twelfth of your allowance each month tax-free.

Your local tax office is correct in that they are assuming you will earn more than £6035. If you feel that you will definitely not earn more than this amount then you can ask for your allowances to be split.

Oh yes, also I'm finishing my main job next friday (it was only a 3 month contract, so i don't see how the tax people can average that out over a year)... if I give my new P45 to my other employer, would I be able to claim back the tax I've already paid?

As you are leaving one job it seems rather silly to split up allowances. You should phone HMRC after you leave and say that your 2nd job is now your only job. Once your code is sorted out any refund due will be automatic as long as it happens before the end of the tax year.

insurgente

excellent, thanks for the tips...

Yes you can do this if your main job utilising the tax code is earning less than £6035 over the WHOLE tax year.

but i'll only be at this place 3 months, so it won't work out over a year? though yea, to be honest....assuming i'm not a total bum, i'll get another job and my earnings in all jobs over a year should be over 6 grand

jem16

insurgente wrote: »

excellent, thanks for the tips...



but i'll only be at this place 3 months, so it won't work out over a year?

The tax office don't look at everything individually - they look at everything over the whole tax year.

though yea, to be honest....assuming i'm not a total bum, i'll get another job and my earnings in all jobs over a year should be over 6 grand

When you get to April 6th 2009 you will be able to see if you are due a refund or not. By then you will know your taxable income for the whole tax year.

mtem74

If you know exactly how much you are going to earn at the 3 month job you could ask the tax office to allocate that exact amount of your personal allowance. That way any tax you may owe goes against your other job. Only trouble is that you can then decide to reallocate the allowance back to your main job without having the 2nd income added on. (some people have tried thinking the tax man would never know)

but to be honest, and if you can afford to, I'd wait until the end of the year and claim a refund. At least you'll get an extra little payday