Tax wrt two or three different part-time jobs

Nikadi

I currently nanny part time for two families. One family will be paying me via nanny tax, I work two days a week for them. The other family employ me for one afternoon a week currently (will go up to two days by next march in half-day increments as MB's work load increases) and they will be paying me my net and sorting out the tax themselves and paying it quarterly.

There is a decently paid shift-work based job of 14 hours a week I could go for which will allow me to earn a bit extra to top me up until my second job reaches it's full hours but I am not sure how this will affect my tax? They'd pay by whatever PAYE method they use but will I get taxed substantially as it's a third job or is tax amount income based?

And also, would I be taxed normal rate for my second nannying position? I assume so and my employer is keeping back that amount for tax purposes... (It's £10 gross and she gives me £8 net which sounded right to us both?)

Realbairn

i think any subsequent jobs to your main job should be taxed at BR1 tax rate. To my knowledge this is that tax rate that does not allow you the allowances allowed for each person - that's the £7470 tax free amount allowed for all, then the £2560 taxed at 10%. BR1 will just tax you at standard 20% that way you shouldn't be underpaying your tax for the year. if you over pay you can always reclaim it at the end of tax year.

Nikadi

Thank you I've been after an answer of some sort for days and haven't been able to work it out from the HMRC site!

t0rt0ise

Realbairn wrote: »

i think any subsequent jobs to your main job should be taxed at BR1 tax rate. To my knowledge this is that tax rate that does not allow you the allowances allowed for each person - that's the £7470 tax free amount allowed for all, then the £2560 taxed at 10%. BR1 will just tax you at standard 20% that way you shouldn't be underpaying your tax for the year. if you over pay you can always reclaim it at the end of tax year.

The 10% rate is only for savings and then only if you don't use up all your personal allowance on income.

LittleVoice

If you earn £7475 or more in one of your jobs in this tax year (ending 5 April 2012), you should have your tax code (probably 747L) applied to that income. That will give you all your tax allowance in that one job. The other jobs should deduct 20%. (I'm assuming you are not earning enough to pay higher rate tax on any of your income.)

That's the simplest way.

However, if you are not earning £7475 in any one job, you can ask HMRC to split your code between more than one employer so that you pay the correct amount as you progress through the tax year instead of having to re-claim over-paid tax at the end of the year.

agrinnall

I think you might get more accurate advice if you were able to post actual pay figures here, that way it'll be asier to work out what's most appropriate for your situation. For instance, the second family's retention of 20% is probably correct at the moment but may not be enough once you are working two days a week if you are then above the threshold for paying NI contributions.

KiKi

Tax is worked out on your TOTAL income for the tax year.

You can earn £7475 before paying tax . So the easiest way is to apply your tax code - 747L (assuming you have no individual circumstances that mean your tax code is different to the norm) - to a job that pays more than that, if you can. All other jobs are then taxed at BR1, which is the basic rate, ie, 20% on all earnings in those jobs.

If you can't, because you don't earn more than £7475 in any one job, then HMRC can split the tax code over two jobs (or more if required), and you then pay tax on all earnings on the third job.

Call HMRC as they can sort it for you to make sure you don't pay too little or too much; they're pretty helpful on this. However, don't forget you need to factor in NI Contributions, too.

KiKi

chrisbur

Are either of your nanny jobs done under a net pay agreement?

Nikadi

Chrisbur: No. They are both gross at £10 an hour, I refuse to work with a net agreement or under a self-employed status.

Job one is two 'short' days a week of 8 hours, no breaks obviously. They intend to pay back any expenses and petrol money at the end of each month which I believe isn't taxed as it's paying me back money I've spent to carry out my duties iirc?

Job two is currently one afternoon a week at 4.5 hours and no breaks again obviously. In December it should rise to two afternoons a week and the two mornings will be added in the new year. My boss plans to use nanny tax when my hours increase, but cannot justify spending £200 on a service she doesn't yet need which I agree with. She does know about the NI contributions but hasn't worked out the numbers just yet, she's currently double checking the contract to ensure she has everything in place and will be writing out the sums for me to double check (holiday entitlements and everything else) when I work this week.

The job I intend to go for would be a minimum of four shifts of 3.5 hours a week (14 hours) and is minimum wage I think. They have their own PAYE service as normal jobs do.

I had a nanny job over the summer which paid £1500 gross a month so I think that a good amount of my allowance would have been taken up in that for this tax year. I also did a lot of overtime for them which went through the proper systems wrt pay which would affect my allowance.

agrinnall

It's pretty complicated and I'm no expert so hopefully someone who knows more about it will reply (you might want to consider posting on the Cutting Tax board instead where there are a lot of accountants).

Unless it's for travel you do while you are actually at work I don't think your petrol money will be an allowable expense, you can't claim for travel to your normal place of employment. What other expenses are you getting, employees have very few allowable expenses these days? If you were self employed you might find it easier to claim these, and in fact the whole nannying thing might be easier although it would be you doing the admin rather than your employers.

Nikadi

It is expenses for whilst I'm working. I'd be onto a goldmine if I claimed for expenses to get to work! Other expenses include things like taking the children out to places that cost money (soft play, farms, activities, museums, etc), food costs whilst out, transport costs whilst out, any gifts for children's friends parties that may have been forgotten and so on. It's basically money that they would normally spend to do the same thing with their children, they'll be paying me back for that.

There are very few cases where you can legally be a self employed nanny. I don't understand the circumstances that are allowable so I refuse to get into it lest I end up being black marked by it iyswim? From what I do understand, very few nannies meet the HMRC criteria for being self employed and as I young nanny I cannot afford to screw up this early on in my career, especially with tax.

I think I have everything I needed answered to a basic level now, I have a better idea of how I can go about working the three jobs and will likely not split my tax code as I earn over the threshold in my two day a week job anyway.

Thanks all