Tax confusion

sparklefish

Hello All,

I hope someone can help me clarify my situation.

I currently work full time and since the beginning of this financial year I've been earning 22k. I also have a second bar job which I do about twice a week and earn an additional 200-300 per month (I pay 20% tax on all my bar earnings). My main job tax code is 747L and my bar job tax code is BR.

At the end of August I am going back to fulltime education (teacher training) so I obviously won't be working full time anymore. I will be giving up the bar job altogether. My main employer has offered to give me 3 days' worth of work from home each month.

The main employer has told me I can either go freelance and do the tax return myself or be kept on by them as an employee. They say they don't really mind which option I go for.

My question is twofold really: is there any benefit (my employer mentioned claiming back costs for work mileage or needing a new work computer) to me going freelance and taking on the hassle of filling in my own tax return etc- is this difficult? Would I have to put aside 20% of everything I earned to pay in a lump sum later. I'm not great with money and I wouldn't necessarily trust myself to have the tax money when the bill comes at the end of the tax year.

My other question is where will I stand on tax? I know that so far this year I have earned more than the threshold, so would anything I earn in future be taxable? I mean is tax culmulative over the year, or will I be put back under the threshold as from the beginning of Sept I'll only be earning 200-300/month?

Thanks in advance for any help.

Caz3121

Personally if I was in your position I would stay on PAYE

re the tax, although you have earnt more than your allowance this year so far, if you have been paying tax through PAYE the monthly payment will be based on you earning the same every month. The tax year runs April to April and looks at the total in that time.

For simple calculations

Salary 17475, tax due on £10,000 (salary less allowance) = approx £138 per month
so you work for 6 months and earn 17475/2 and then the other 6 months at £300 per month - total income = £10,537 tax due for the year £612
you have already paid 6 x £138 = £828 so have overpaid, if you stay on PAYE this should sort itself out in the tax year and you are likely not to be taxed (or be taxed and get it back)

listentotaxman is a good site for chucking the figures through