Second job... 40% tax?!

Hooloovoo

dearlouise wrote: »

I don't understand why. As I haven't gone above the threshold?

Others have given the general answer to your question, but lets put some actual numbers on it.

Tax is deducted assuming that what you were paid in one month is what you are going to be paid every month, for the next twelve months.

You receive £24k from job-1 in twelve months.

You receive £2.5k from job-2 in six weeks. That's approximately £21.6k over twelve months.

Your total potential earnings are £45.6k which puts you just over the 40% tax bracket. The problem is HMRC do not know that you only intend to earn from job-2 for six weeks, and not twelve months.

You can either inform HMRC now and ask for your tax code to be adjusted, or you can just wait until the end of the tax year and submit your final P60s from all employment for assessment, after which you'll receive a tax refund.