2nd job tax implications

ElvisPresleysCat

Hi

I've been wrangling with debt for a while and have been considering a 2nd job.

I need to be able to work out my tax to see if it is worth going for it.

A friend said I will lose about £2 in every £20.

But I need the absolute amounts for tax and NI.

If someone has the formula or can point me in the right direction, I'd really appreciate it.

Currently my tax code is: 647L

Thanks
Adam

custardy

http://www.thesalarycalculator.co.uk/salary.php

you dont tell people what you earn now
if both jobs dont make the next tax threshold then it doesnt make a difference bar your usual tax

bungle82

Your second job (assuming you use your full tax allowance in your first job) would be taxed at basic rate which is 20%.

property.advert

If your first job used up all your allowances and presuming this would not take you into the 40% tax category, you would be paying full NI and 20% tax on your gross amount. In simply terms think of it like losing 30% or if easier, a 1/3 of the money you would be earning.

stitching_witch

Property.advert is almost right.

You would only pay National Insurance contributions if the second job paid over £97 a week. Each job is treated separately for NI purposes, but you will pay pax on all your earnings in your second job if you are already using your full allowance in the first job. (Three years in Payroll comes in handy sometimes!)

DarkConvict

You use your tax code on 1 source of income only.

So 647L (£6470) goes onto your first job. This tax code assumes you have just one job and as such works out your tax into the 20%, 40%, 50% bands.

Your second job is BR, basic rate of 20% for all income.

At the end of the year all income is added together and the amount of tax you should have paid is checked against what you should have paid. A Tax Charge/Rebate is then issued.

I.e.

Job 1, earn £16,470 a year.
£6470 is tax free.
£10,000 is taxed at 20% = £2,000. = ~£167 a month.

Job 2, earn £5,000 a year
£5,000 is taxed at BR 20% = £1,000

Total paid is £3,000.

Taxed is then worked out.

You earned in total, £21,470
Minus £6470 tax free = £15,000
Not in upper 40% band, so all 15,000 is charged at 20% = £3000.

If you finish jobs before a tax year early, you often over pay tax so you get a rebate. If however a second income is high, it is possible that total incomes pushes you into a 40% band. I.e. If you got charged 20% on a 2nd income earning you £30,000. You would be way over the limit so when calculated you would have under paid overall.
Just make sure you have just 1 tax code, i was given 2 tax codes so ended up under paying leaving a deficit to pay back.

----

As to NI, i don't have a clue.

ElvisPresleysCat

Thanks for your replies I will now consider things.

On another note, does anyone have a standard credit card letter template for writing to them, asking for a charge and interest freeze? Possibly a monthly offer etc?

Ta!

Adam

Numpty_Monkey

Have a look on http://www.nationaldebtline.co.uk/england_wales/debt_advice.php#6
sample letters

ElvisPresleysCat

I've been with the HSBC for 17 years now and I never thought I'd be doing this but it is the only way to tackle the charges I'm being hit with.

I recently setup a new bank account with the RBS and am in the process of moving all DDs and SOs to them. This way I will be able to have a complete control over all my finances and the bank that currently receives my monthly wage will no longer be able to eat it all in the overdraft and changes etc.

I don't know if this is a smart move but I'm doing it all the same. It is the only way I can see to do it without losing every penny I have every month. There are many temping options available but I don't want to be rash. The fact is I have way more outgoing than incoming *sigh*