Understanding tax and NI codes

Goblin1975

Hi,

I would like some advice on a pay slip I have received from a second employment please.

My background: I work full time (earn £44,000-ish, after childcare vouchers and pension taken before tax it's about £38,000 taxable) and obviously pay the appropriate PAYE and national insurance as shown on my wage slip. I also do a small amount of self employed work marking exam papers (c. £1,500 a year) where I have a NI exemption due to small earnings.

I have recently done some other exam marking for another organisation worth £600 who have 'employed' me on a one month contract and paid me via their PAYE scheme using my NI number. On my pay slip, I have the following:

Tax code 0T/1
NI Number A

I have been taxed at 20% and so they've taken £120 off (should be 40%, see above), and NI is £0.

How will the other 20% of the tax (another £120) be claimed from me and when? And why haven't I paid NI on this?

I'd be grateful for any advice. I'd only just got my head around the self employment side, and now I have more complications!

Thanks so much in advance.

Goblin1975

Can anyone help me with this??? Please?!?!

Lovelyjoolz

HMRC will calculate any income tax you owe when you complete your Self Assessment form next January.

You do complete a Self Assessment form, don't you?

WestonDave

The 20% tax will probably be picked up when they get the two sets of employers figures in after April 5th - but as you'll be doing self assessment for your self employed role, you'll simply add the 20% you owe on this to the 40% you owe on the self employed income to get your total payable.

Re NI on the £600 - this is below the monthly threshold which is per month per job, not cummulative across jobs and over the full year as in the case of tax. So in this case £0 deductions is correct.

KiKi

How will the other 20% of the tax (another £120) be claimed from me and when? And why haven't I paid NI on this?

When you complete your Self-Assessment Tax Return for 2011-12. (You know you need to complete these for both your employed and self-employed work?)

You're under the threshold for NI.

HTH
KiKi

Goblin1975

Thanks so much. I've only completed the self assessment forms once a few years ago (not done any more self emp again until now) and I didn't recall, until you mentioned it, that I will need to put my full time employment stuff down as well as the self employed.

Thanks for the replies, I feel reassured that I'm not going to unknowingly evade my tax obligations!

Lovelyjoolz

Don't worry. You will need to complete an SA for the tax year ending 5th April 2012 before January 2013. But remember that you must let HMRC know that you will need to do a SA before 5th October this year.

Goblin1975

Why do I need to do an SA before october this year??? And as well as by Jan 2013 (the latter I knew about!).

Lovelyjoolz

Goblin1975 wrote: »

Why do I need to do an SA before october this year??? And as well as by Jan 2013 (the latter I knew about!).

No, no, no! Calm down! You've misunderstood me. You will need to file an SA before 31st January. But to file it online, HMRC need to be told that you are going to do it. The deadline for notifying them that you will be submitting an SA is 5th october. Get me?

Goblin1975

Oh yes, good, thanks!