Self employed and now PAYE too, tax code help!

jennifirtree_2

Hi, I have read through a few posts, and a lot before I set up as self employed. Had pretty much got my head round that (I think!) and then went and got myself a part time, 15 hours a week, minimum wage PAYE job.

Now I'm really confused, I had to fill in a p46, and ticked box C "As well as my new job. I have another job or receive a State Pension or Occupational Pension"
to say that it was my second job as I assumed being registered as self employed that was correct?

The PAYE job had a call from the accountant today worried that I had ticked this box and saying I would be on a "BR" tax code rather than the 810L that she had used on last weeks payslip.

Will this mean that I get taxed at 20% on everything even though I am not earning anywhere near my personal allowance over BOTH jobs? HMRC have me down as earning £1000 through self employment as it is my first year and at the moment I am currently making a loss!

Sorry if I am not making sense, I don't know where else to ask as my boss doesn't deal with payroll at all so doesn't understand tax etc. , and the HMRC website doesn't seem very useful if you are both self employed and employed at the same time!

TIA

Notmyrealname

Yes you will be taxed 20% on everything as you stated it is your second job.

What happens is at the end of the year you complete your self assessment and will fill in a page for the PAYE including what you've paid in income tax.

The profit/loss from self employment is added to the gross PAYE income and your tax bill worked out. The tax you've already paid through PAYE is deducted from that and you are sent a bill or refund accordingly.

You won't pay more tax than you should but you'll pay some which will be refunded. All I'll say is the earlier you file your tax return online, the earlier you'll get the tax you overpaid back.

Personally I'd not worry about it and treat it as saving some "holiday pay" or "christmas money". After all, you should be putting aside some from every invoice paid to cover holidays or sickness and this is one way to do that.

carebear13

normall you can ask for your tax code to be allocated to the higher earning one. can you do this for s/employment too?

megela

carebear13 wrote: »

normall you can ask for your tax code to be allocated to the higher earning one. can you do this for s/employment too?

If you have 2 'normal' jobs you can also ask for your tax code to be split between the 2, so you get your full allowance. Not sure if this applies to self-employment though.

jennifirtree_2

How do I go about asking them to allocate my tax code to the PAYE job?

I am assuming as I will not be earning my personal allowance with either of my jobs that I shouldn't be paying tax on either.

I would love to be able to "not worry about it" but it will reduce my income by £80 per month which is actually a LOT to me!

Thanks for the help :-)

megela

Ring them and explain the situation - they'll ask questions about income from both streams and split the tax code the best way.

You may need your emloyers tax office reference number so they can send them out your new tax code, or they may be able to find them from their name.

I've always found them to be very helpful when I've needed to do this.

jennifirtree_2

Thanks, I have just given them a call and they will allocate 810L to the PAYE job. You were right they were very useful when I finally got through to them!