Using my tax allowance wisely?

Estwing

I currently have two jobs, one PAYE and one self-employed and im unsure which one is best to claim my tax allowance on. I think im right in saying that HMRC states the tax allowance must be applied to my main income (which is the PAYE £23000), but it is currently being applied to my self-employed income (£12000) as this was my first income.

Am i allowed to change it (or do i HAVE to?) or would it be better to use it with my self-employed income.

Thanks in advance.

Pumpkinface_2

Estwing wrote: »

I currently have two jobs, one PAYE and one self-employed and im unsure which one is best to claim my tax allowance on. I think im right in saying that HMRC states the tax allowance must be applied to my main income (which is the PAYE £23000), but it is currently being applied to my self-employed income (£12000) as this was my first income.

Am i allowed to change it (or do i HAVE to?) or would it be better to use it with my self-employed income.

Thanks in advance.

I believe you can change where your personal allowance is applied. This won't change the amount of tax paid though, at most it might make a timing difference.

fengirl_2

You can change it over, but not a good idea to do so part way through the tax year. If you take your tax free allowance away from your PAYE job now, you will have underpaid tax from the allowances already given.
You have to ask yourself whether you would be happy taking home £108 per month less from your PAYE job, because thats what swapping your allowances would mean.

Ballymackeonan

I'm in a similar situation, with income from both PAYE and self-employment. I'm on "BR" for PAYE - the Inland Revenue have to be reminded each year - because that means that I can build up my income tax by deduction, and minimise the January and July payments as far as possible.

It suits me, might not suit you...

Estwing

Yeah im on BR for PAYE too, ah building up your income by deduction, ive just clicked on what you mean, makes good sense i never thought of that!

Thanks for the input.