2nd income rant

Buccaneeruk

Hi all new to this so hope someone can help


After serving 22 years in the armed forces I was (sadly) retired.

Now I receive my mil pension

In April last year I finally got a job after 9 months of unemployment

Anyway

For that 1st year the tax office did not inform my pension they were no longer my primary wage and thus I was taxed standard rate for the 1st year on that and my job.

Now a year later I am hit with a bill for £1373 from the tax man
So They adjust my code on the pension bang £130/ month poorer
And next April will temp adjust for 1 year to reclaim the owed balance
So in 9 months my wages drop by £260/ month is their anything I can do about this as this is a hell of a lot of money in this economic time?




2ndly my pension and wage equate to less than the £34k for higher tax rate but my 2nd wage is "super taxed" how is that fair

Someone on 2 or 3 low wage jobs trying to make ends meet could % wise have a higher tax rate than a person on 1 £32k job seems totally unfair to me

jem16

Buccaneeruk wrote: »

For that 1st year the tax office did not inform my pension they were no longer my primary wage and thus I was taxed standard rate for the 1st year on that and my job.

I am assuming you mean that both your pension and job were given the standard tax code for 2011/12 of 747L? This meant that you received 2 lots of tax free allowances instead of 1.

When you started your job did you hand in a P45 or complete a P46?

my pension and wage equate to less than the £34k for higher tax rate but my 2nd wage is "super taxed" how is that fair

One income will receive your personal allowance and the other income will be taxed at BR. This is correct and fair as your first income will have used up all of your tax free allowance so all of the rest of your income is taxed at 20%. It is not super taxed as it's taxed exactly the same way as your first income after the tax free part is used up.

Someone on 2 or 3 low wage jobs trying to make ends meet could % wise have a higher tax rate than a person on 1 £32k job seems totally unfair to me

That's not correct I'm afraid. Tax is charged on total income. It won't matter whether you have 6 jobs or 1 job, you will pay exactly the same amount of tax.

Provided you are earning more that £8105, then having a tax code of 810L on the first income and BR on the 2nd income will see exactly the same amount of tax paid.

Meadows

Buccaneeruk wrote: »

Hi all new to this so hope someone can help.
After serving 22 years in the armed forces I was (sadly) retired.
Now I receive my mil pension
In April last year I finally got a job after 9 months of unemployment
Anyway
For that 1st year the tax office did not inform my pension they were no longer my primary wage and thus I was taxed standard rate for the 1st year on that and my job.
Now a year later I am hit with a bill for £1373 from the tax man
So They adjust my code on the pension bang £130/ month poorer
And next April will temp adjust for 1 year to reclaim the owed balance
So in 9 months my wages drop by £260/ month is their anything I can do about this as this is a hell of a lot of money in this economic time?

2ndly my pension and wage equate to less than the £34k for higher tax rate but my 2nd wage is "super taxed" how is that fair

Someone on 2 or 3 low wage jobs trying to make ends meet could % wise have a higher tax rate than a person on 1 £32k job seems totally unfair to me

Can't see why you think that 2 - 3 jobs makes you pay more tax than someone with one job.
The tax you pay is the same (changeable only by what you actually earn each year). I think you will find that once you calculate ALL your income and then deduct the right % of tax at the right levels then you will find you are not paying over the odds. If you do then come the end of a tax year contact them and ask them to review the actual amount of tax you have paid on all your income (this includes interest from savings).

Yes over current years the tax offices have Royally screwed up when it comes to second incomes (different departments dealing with different earnings and not having one central place that sees all earnings so in effect you get two personal allowances) and many have seen hefty bills and are still seeing them as they still do not seem to have got their act into gear. And I guess we are only too happy to sit back thinking "I am sure I am not paying enough tax" but assume the tax man has it right, as they tell us the onus is on us to check our tax (hard to do when your calculations and their calculations do not compare and they will not or can not explain how they got there but we should have a rough idea of what we need to pay and what we are paying), and then I guess we get annoyed they want it all back when we never should have had it in the first place.

CLAPTON

facts always help

firstly you don't pay 40% tax until you earn 42,475 per annum, made up of 8105 tax free allowance and then 34,370 at 20% for tax year 2012-13 (for last year 2011-12 then figures were 7475 and 35,000 which also total to 42475)


the total tax paid works out exactly the same whether you have one income or 10; it's the total yearly income that counts ; NI is calculated somewhat differently and isn't charged on pensions).


if you would like to post up the details of each income (including the taxcodes) we could help you somewhat more effectively