2 Jobs tax code help

chris1344

Hi,

I can see that you have helped alot of people out with tax problems, so was helping that you could help with this for me ......

I am a student at university but have had a part-time job for years, which gets a variable income per month. I do pay some tax as I work alot during the summer and other breaks so just go above the cut-off.
However, this year as part of my uni course, I do one years paid placement. To make sure that i still have a job for next year, I am also keeping my part-time job for only 7 hours per week.

I have now been on placement for 4 months, and my placement provider have asked about my tax code and I need advice for what is best.

My part-time job has this tax code: 647L, but I have earnt £7800 so far this tax year, however monthly income will not top £200 until Sept/Oct after the placement.

My placement job will pay £15,000 a year (therefore, my main earner) but I am on tax code BR. My gross pay is 1268pm, but due to my tax code, I am only taking home 920pm.

Should I be doing anything to change this, make it better for myself? Should the BR code be for my 7hrs a week job? Would it make alot of difference to me?

Thanks for yor help!
Chris

jem16

At the moment your tax code is wasted on your part-time job as you are not earning enough to utilise the allowance so you are paying more tax than is necessary.

Best course of action is to have HMRC swap around the tax codes so that your placement uses 647L and your part time job uses BR.

chris1344

Thanks for replying so quick!

How much difference would this make to me?

And also, would I be able to contact HMRC to back date it to September when my placement started or what that mean too much hassle for them?

If I get it back-dated, could I get some money back?

Thanks

Lokolo

You cannot backdate as such. However when you get your P60s (which you will get around May). You can send them off and get a tax refund.

If you then choose to switch tax codes when you leave your placement you can give you P45 (which you get when you leave a company), hand it into part time employer and they will sort it out.

zygurat789

You don't have to back date anything paye is usually cumulative and so automatically back dates.
You can choose your main tax office, which at the moment is for your part time job, I would keep it here since your placement is only temporary. Give them a ring and tell them about your placement and they will divide them between your jobs however you tell them. You must have the tax office reference number for your placement, the wages office will give it to you.

chris1344

I have two different opinions here, can anyone shed light onto which one is the best for me?

Also, can you clarify what I need to do when my P60's come through? I need to send them both off and they will automatically realise I have been taxed too much, or will I need to work something out?

Cheers

jem16

chris1344 wrote: »

I have two different opinions here, can anyone shed light onto which one is the best for me?

At the moment with £15,000 at BR code you are paying £253.60 in tax each month. With your part-time job at £200pm and a tax code of 647L you pay no tax.

If the 647L code was attached to the £15k job you would pay £145.68 in tax. The £200 pm part-time job with BR code would see £40 tax coming off so a total of £185.68

So basically an extra £70 approximately each month.

If the tax codes were split over each job - for example 240L with your part-time job and 427L with the £15k job you would pay £178.68 in tax.

Which way is best HMRC may be able to advise. However doing nothing will see you pay too much tax which will need to be claimed back once you receive your P60 (by end of May) and then at least 6 weeks for HMRC to process.

If you get the codes changed now you should be in time for it to be applied before the end of the tax year which will give an automatic refund the first time the code is utilised (provided it's a cumulative code)

Also, can you clarify what I need to do when my P60's come through? I need to send them both off and they will automatically realise I have been taxed too much, or will I need to work something out?

Cheers

If you do not chnage the tax codes you get your P60s - copy them but send the originals to HMRC saying you feel you have paid too much tax and would like a refund. You do not need to calculate anything.

Lokolo

jem16 wrote: »

If you do not chnage the tax codes you get your P60s - copy them but send the originals to HMRC saying you feel you have paid too much tax and would like a refund. You do not need to calculate anything.

Yes you do, for funsies!

mjm3346

If this tax year your part time income has already reached £7800 that will use all your tax free allowance so the BR code is correct on your other employment.

jem16

mjm3346 wrote: »

If this tax year your part time income has already reached £7800 that will use all your tax free allowance so the BR code is correct on your other employment.

As you don't get all of your allowances in one go they won't all have been used yet. So far only 10/12ths of the allowances have been used.

mjm3346

jem16 wrote: »

As you don't get all of your allowances in one go they won't all have been used yet. So far only 10/12ths of the allowances have been used.

The income already earned is enough to use all the allowance for this tax year. By the end of the tax year the correct amount of tax for the part-time job should have been paid (by refund through PAYE if monthly income from the job is less than the remaining proportion of the tax allowance).
There should be no allowance left to shift to the other employment and if the tax code was moved now the total tax paid across both jobs would be the same.
For the coming tax year it will make a difference if the total income from either job is less than the personal allowance.