Calculating tax for 2 jobs

NurseMoneySaver1122

Hi guys

I was wondering if anyone can help me with calculating/checking the tax paid from 2 jobs for tax year 2009/10.
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I was working part time (11.25 hours per week) for one company from the start of 2009/10 tax year and left in March 2010. I earned £3539.92 and paid no tax as a result with tax code 647L.

However, durig the same tax year, in Dec 2009, I started my full time nursing post. So for the months from Dec 2009-March 2010 I was holding down a full time and part time post. In my nursing post I earned £7039.34 and I payed £975.40 tax but also had 647L tax code (shouldn't that have been a different tax code?)

Therefore, total earings for tax year 2009/10 was £10,579.26 with a personal allowance of £6475.

If this was from one job, I believe you take your personal allowance off of your total earnings, which would leave £4104.26 taxable earnings. Then devide £4104.26 by 100 and multiply by 20 to give me the 20% I should have been taxed..(not sure at all if this is correct but seems to work out for other years I've checked?!)

However, because i had 2 jobs part way through the named tax year, it totally throws me on how to check your tax. Can anyone help please??? :-)

jem16

clairem1122 wrote: »

Hi guys

I was wondering if anyone can help me with calculating/checking the tax paid from 2 jobs for tax year 2009/10.
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
I was working part time (11.25 hours per week) for one company from the start of 2009/10 tax year and left in March 2010. I earned £3539.92 and paid no tax as a result with tax code 647L.

However, durig the same tax year, in Dec 2009, I started my full time nursing post. So for the months from Dec 2009-March 2010 I was holding down a full time and part time post. In my nursing post I earned £7039.34 and I payed £975.40 tax but also had 647L tax code (shouldn't that have been a different tax code?)

Yes it should have been BR or your tax code should have been solit between your two jobs.

Therefore, total earings for tax year 2009/10 was £10,579.26 with a personal allowance of £6475.

If this was from one job, I believe you take your personal allowance off of your total earnings, which would leave £4104.26 taxable earnings. Then devide £4104.26 by 100 and multiply by 20 to give me the 20% I should have been taxed..(not sure at all if this is correct but seems to work out for other years I've checked?!)

However, because i had 2 jobs part way through the named tax year, it totally throws me on how to check your tax. Can anyone help please??? :-)

What you have done is correct.

NurseMoneySaver1122

jem16 wrote: »

Yes it should have been BR or your tax code should have been solit between your two jobs.

So would this likely mean I have underpayed tax as I had 647L tax code for both jobs?

What you have done is correct.

Doesn't the calculation change when there is a second job thrown in because you're taxed at a different percentage?

Overall, does the amounts of taxed I have payed appear to be correct or over/under?

chrisbur

It does not matter as far as tax is concerned how many jobs you have. Tax is paid on your total taxable income at the end of the year. If you had been given two tax allowances of 647L then you would have underpaid tax, but the allowance given in your full time nursing job was the emergency code of 647L Month 1. You recieved four monthly payments from them I believe so in effect were only given one third of the full allowance a cumulative 647L code would give.

The result assuming no other taxable income is that you have overpaid tax.

NurseMoneySaver1122

Thankyou for your reply..just a few more questions...

"It does not matter as far as tax is concerned how many jobs you have".
I always thought you were taxed at a different percentage for a second job?

"If you had been given two tax allowances of 647L then you would have underpaid tax, but the allowance given in your full time nursing job was the emergency code of 647L Month 1".
I have just seen my tax code for nursing job was 647L NON CUMALATIVE, which I believe is the same thing as you've said..emergency code. Isn't an emergency code correct for a second job?

"You recieved four monthly payments from them I believe so in effect were only given one third of the full allowance a cumulative 647L code would give".
Yes I did receive 4 monthly payments from my nursing job, but I also received £3539.92 tax free from my part time job, therefore used over half of my allowance in my part time job, not including my nursing job. That leaves me with a personal allowance of £2935.08 for my nursing job. I earned £7039.34 minus £2935.08 personal allowance = £4104.26 taxable income.

"The result assuming no other taxable income is that you have overpaid tax".
Does that still seem to be the case? And correct; no other taxable income.

CLAPTON

clairem1122 wrote: »

Thankyou for your reply..just a few more questions...

"It does not matter as far as tax is concerned how many jobs you have".
I always thought you were taxed at a different percentage for a second job?

"If you had been given two tax allowances of 647L then you would have underpaid tax, but the allowance given in your full time nursing job was the emergency code of 647L Month 1".
I have just seen my tax code for nursing job was 647L NON CUMALATIVE, which I believe is the same thing as you've said..emergency code. Isn't an emergency code correct for a second job?

"You recieved four monthly payments from them I believe so in effect were only given one third of the full allowance a cumulative 647L code would give".
Yes I did receive 4 monthly payments from my nursing job, but I also received £3539.92 tax free from my part time job, therefore used over half of my allowance in my part time job, not including my nursing job. That leaves me with a personal allowance of £2935.08 for my nursing job. I earned £7039.34 minus £2935.08 personal allowance = £4104.26 taxable income.

"The result assuming no other taxable income is that you have overpaid tax".
Does that still seem to be the case? And correct; no other taxable income.

It's a little unclear exactly what you are asking

you should have paid 820 in tax and you actually paid more
you need to reclaim the difference

hopefully your 2011 -12 codes are sorted... are they?

noodle

clairem1122 wrote: »

Thankyou for your reply..just a few more questions...

"It does not matter as far as tax is concerned how many jobs you have".
I always thought you were taxed at a different percentage for a second job?

You would be taxed differently at source if you were given different tax codes - but when you add up at the end of the year it makes no difference.

System

clairem1122 wrote: »

Thankyou for your reply..just a few more questions...

I always thought you were taxed at a different percentage for a second job?

I have just seen my tax code for nursing job was 647L NON CUMALATIVE, which I believe is the same thing as you've said..emergency code. Isn't an emergency code correct for a second job?

Every individual tax payer is entitled to a tax free allowance in each tax year.
For the 2009-10 tax year the standard personal allowance was £6475 tax free, the tax code for this allowance is 647L

When you have more than one job where tax is deducted via PAYE (like in your case) then you and HMRC need to agree how your personal allowance should be applied to those two jobs.

If you know that you will always earn more than the personal allowance in your main job, then it is simplest to ask HMRC to apply all of your allowance to that main job. (This could be how it should be in your case) and then a code of "BR" could be applied to the 2nd job so that all the income from that 2nd job was taxed at 20%

Tax is paid at 20% on all your "taxable earnings" up to the basic tax band threshold. From the info in your posts, your total income is below this upper threshold so you do not currently need to worry about paying the higher tax rate which would be 40%.

It looks like HMRC were not fully aware that you had two jobs so you have been given the £6475 personal allowance twice, although I'm not 100% sure if that is true since there seems to be conflicting information in the whole of this thread ?

The basic tax calculation is :

TaxDue = (TotalTaxableIncome - 6475) * 20 / 100

Where:
TotalTaxableIncome is the total of the gross income you received from both jobs (Less any pension payments / deductions that may have been made before tax)

So, as others have already said, you seem to have paid too much tax and you should contact HMRC to request a refund.
Using values you have posted :

TaxDue = (10579.26 - 6475) * 20 / 100 = £820.85 (This agrees with your own calculation in your original post)
Tax you have paid = £975.40

Therefore, it seems that HMRC owe you £154.55 (Assuming all these figures are accurate)

chrisbur

clairem1122 wrote: »

Thankyou for your reply..just a few more questions...

"It does not matter as far as tax is concerned how many jobs you have".
I always thought you were taxed at a different percentage for a second job?

"If you had been given two tax allowances of 647L then you would have underpaid tax, but the allowance given in your full time nursing job was the emergency code of 647L Month 1".
I have just seen my tax code for nursing job was 647L NON CUMALATIVE, which I believe is the same thing as you've said..emergency code. Isn't an emergency code correct for a second job?

"You recieved four monthly payments from them I believe so in effect were only given one third of the full allowance a cumulative 647L code would give".
Yes I did receive 4 monthly payments from my nursing job, but I also received £3539.92 tax free from my part time job, therefore used over half of my allowance in my part time job, not including my nursing job. That leaves me with a personal allowance of £2935.08 for my nursing job. I earned £7039.34 minus £2935.08 personal allowance = £4104.26 taxable income.

"The result assuming no other taxable income is that you have overpaid tax".
Does that still seem to be the case? And correct; no other taxable income.

As I said tax is worked out on your total income, no different percentages for different jobs. Along the way tax may be split unequaly between jobs so that you appear to be paying more on one job than another but that is only because usually the tax allowance is all given to one job and no allowance to the other job.

Yes that is the same as emergency code. No emergency code is not correct for a second job, BR should be used.

As you say you had £2935 of your allowance left for your nursing job, but you were given only £2158.33 (£6175 divided by 3) so had about £777 of unused allowance.

Result still the same. Twenty percent of £777 is about £155 which is about what BAA1 made it. His figure is proberbly the more accurate one as I worked on very rough figures.

NurseMoneySaver1122

BAA1 wrote: »

Every individual tax payer is entitled to a tax free allowance in each tax year.
For the 2009-10 tax year the standard personal allowance was £6475 tax free, the tax code for this allowance is 647L

When you have more than one job where tax is deducted via PAYE (like in your case) then you and HMRC need to agree how your personal allowance should be applied to those two jobs.

If you know that you will always earn more than the personal allowance in your main job, then it is simplest to ask HMRC to apply all of your allowance to that main job. (This could be how it should be in your case) and then a code of "BR" could be applied to the 2nd job so that all the income from that 2nd job was taxed at 20%

Tax is paid at 20% on all your "taxable earnings" up to the basic tax band threshold. From the info in your posts, your total income is below this upper threshold so you do not currently need to worry about paying the higher tax rate which would be 40%.

It looks like HMRC were not fully aware that you had two jobs so you have been given the £6475 personal allowance twice, although I'm not 100% sure if that is true since there seems to be conflicting information in the whole of this thread ?

The basic tax calculation is :

TaxDue = (TotalTaxableIncome - 6475) * 20 / 100

Where:
TotalTaxableIncome is the total of the gross income you received from both jobs (Less any pension payments / deductions that may have been made before tax)

So, as others have already said, you seem to have paid too much tax and you should contact HMRC to request a refund.
Using values you have posted :

TaxDue = (10579.26 - 6475) * 20 / 100 = £820.85 (This agrees with your own calculation in your original post)
Tax you have paid = £975.40

Therefore, it seems that HMRC owe you £154.55 (Assuming all these figures are accurate)

Completely spot on...THANKS!!! Got my tax calculation sent from HMRC and that's exactly the rebate they calculated for that year. Thanks you!!!

NurseMoneySaver1122

Thank you everyone soooooo much. I've gone from not having a clue about how to check my tax, to totally understanding it thanks to every one of you!

As a result of everyone's help, I just received my tax refund cheque for £478.01!!! Not only did they owe me a rebate for 2009/10 but also 2010/11!! And guess what, I was able to check the calculation was correct..finally!

Can't thank you all enough...from new Number 1 fan of MSE!!! :-)