2 part time jobs and tax

eeetee

Hopefully someone can offer some straight forward advise because after phoning HMRC I'm none the wiser...

Basically I have one part time job, c. £400 month, then over the next 4 weeks will be additionally working on a freelance basis part time. This will bring my earnings above the personal allowance threshold. I was advised than I may split my personal allowance in half between the 2, but am unsure of the benefit in doing this. I have now been advised to keep things as they are, but I am a bit concerned that this means I will be taxed @ 20% on the second job as opposed to 20% abive the thressold. If this is the case, how do i ensure things 'even out' tax-wise over the year so that I don't end up over paying tax? Would this be done automatically at the end of the tax year?

browniej

Best way is to split the tax code as you were first advised - it doesn't have to be in half. The first jpb earns you approx £4800 so a tax code of 480L could be applied here with the remainder 167L applied to the 2nd job.

If BR is applied to the 2nd job and 647L to the fist you will overpay in tax which can't be claimed until the end of the tax year.

Why were you advised later not to split the codes?

yelf

it doesnt make a difference: you pay tax on the combined income above your PA. So ultimately the tax paid is the same.

CLAPTON

what do you mean 'freelance' ... is tax deducted at source or is it self employed?

browniej

yelf wrote: »

it doesnt make a difference: you pay tax on the combined income above your PA. So ultimately the tax paid is the same.

Ultimately it is the same.

However one way sees you overpay tax and then have to go to the bother of reclaiming it.

Why not simply get the codes correct in the first place?

eeetee

Thankyou for your replies guys, I think I understand this issue better now

browniej wrote: »

Ultimately it is the same.

However one way sees you overpay tax and then have to go to the bother of reclaiming it.

Why not simply get the codes correct in the first place?

I ama ware that overall the tax I pay is the same, but I would prefer to pay the correct tax from the start. I have just been taxed £80 on my first wage, which is money better of with me and not the tax man getting on the 'correct' code seems easier said than done, especially as i am not leaving one job, but running both simultaneously, (hence no P45 to instruct 2nd employer of tax status) I was not aware that the allowance could be split up other than 50/50. as with us all, i don't mind paying tax, i do mind overpayinging tax

Horseunderwater

eeetee wrote: »

Thankyou for your replies guys, I think I understand this issue better now



I ama ware that overall the tax I pay is the same, but I would prefer to pay the correct tax from the start. I have just been taxed £80 on my first wage, which is money better of with me and not the tax man getting on the 'correct' code seems easier said than done, especially as i am not leaving one job, but running both simultaneously, (hence no P45 to instruct 2nd employer of tax status) I was not aware that the allowance could be split up other than 50/50. as with us all, i don't mind paying tax, i do mind overpayinging tax

Hi
Work out what your actual part time job gross income for year will be - If this will be less than £6475 take that off and the balance will be left to cover your freelance stuff which you settle at the end of the year via self assessment. That is a very simple way to do it.
Make sure that you keep a record of any business mileage by car keep bus or train tickets and any other expenses related to the freelance stuff. Suggest keeping them in date order stapled into a simple diary with daily pages. If you do not have many and your turnover is under approx £15k (might be more now) you can file simple accounts.
Tax can be easy or as hard as you wish to make it.
Hope that helps a bit.
Frances.