Part time job tax code BR

Pianoman1

Hello all,

My wife has recently started a part time job. She works 22 hours per week @ £9.00 per hour. I was a bit surprised at her pay and that 20% of the whole basic pay was deducted. It says she is on tax code BR, which does not allow for the £10,000 allowance.

I don't know a lot about this, so can someone help me understand if she is on the right tax code?

The only differences to this job from the norm is that she works 8am to 6pm (with one hour lunch break) 2 days and she does 1 half day. To do this, she signed an agreement to work the longer shift. Also, she gets paid weekly.

Unfortunately I did not oversee what she ticked on the P46, so it is likely that she may have ticked the wrong box. She should have ticked box B on the P46, as we lost our self employed work in June and claimed JSA from July to November.

I appreciate any insight or advice.

Thanks.

Pianoman1

Another thing to note is that she is currently self employed, but not actually earning anything from it.

Which leads me to another question. Both my wife and I are still register as self employed and both have part time jobs. We both do not earn anything from self employed work, but we did earn between April 2014 and June 2014. My wife has some work in a school coming (as self employed) in January and believe that we will both have more self employed earnings between Jan 2015 and April 2015.

However, currently we are paying class 2 NIs for self employed and also we are paying NI through our part time jobs. Is it mandatory to pay both and what can we do about this?

Castle

Have you told HM Revenue & Customs that you and your wife are no longer self employed?

terryw

Ask your wife to contact her tax office. They may well request the final accounts for the self employment. Remember that the JSA is liable to tax although none will have been deducted.

Above crossed with your second post.

terryw

Presumably your wife will be declaring her self employed income for the year after the start of the new tax year. The Revenue will look at the income for the year not month by month but they may be amenable to making a deduction in the code number on your wife's estimate for the year.

Regarding NI there is an exemption for small earnings from self employment.

Castle

Yes, my reply crossed with your second post!

If your "profits" from Self employment are less than £5885 for the tax year 2014/15 then you can apply for exemption from Class 2 NIC. But remember profits are based on your accounts period, which may not be the same as the tax year. You could also get a refund for the Class 2 NIC you have paid since April 2014.

As terryw mentioned JSA is also subject to tax.

Pianoman1

Thank you both for your replies.

My wife just got info from work. Apparently due to her personal allowance being used up in the previous tax year, she was not given one for the job she is currently on.

However, both our self employment situation changed drastically and we haven't earned anything since end of June'14 from self employed work.

Her work advised her to contact the HMRC if she wants the tax code changed. This is all very difficult to get my head around and I would really appreciate more advice.

Thanks,

PM

Pianoman1

Castle wrote: »

Yes, my reply crossed with your second post!

If your "profits" from Self employment are less than £5885 for the tax year 2014/15 then you can apply for exemption from Class 2 NIC. But remember profits are based on your accounts period, which may not be the same as the tax year. You could also get a refund for the Class 2 NIC you have paid since April 2014.

As terryw mentioned JSA is also subject to tax.

Thank you Castle. If there is a dramatic increase in work that ends up taking me beyond the low earnings limit, what would happen?

Also, for future advise when I expect my earnings to be higher from self employed work, how do I avoid paying NI twice if I earn above the low earnings limit?

zygurat789

Pianoman1 wrote: »

Thank you Castle. If there is a dramatic increase in work that ends up taking me beyond the low earnings limit, what would happen?

Also, for future advise when I expect my earnings to be higher from self employed work, how do I avoid paying NI twice if I earn above the low earnings limit?

In the first case you would have to resume paying Class 2 NIC.
In the second case you will have to pay Class 1 NIC on employed income and Class 2 NIC on self employed income but this is not paying twice.

Castle

Pianoman1 wrote: »

Thank you Castle. If there is a dramatic increase in work that ends up taking me beyond the low earnings limit, what would happen?

Also, for future advise when I expect my earnings to be higher from self employed work, how do I avoid paying NI twice if I earn above the low earnings limit?

zygurat789 is right you have to pay them; so you may find it easier to pay them each year and claim them back after the end of the tax year, if you don't earn enough.

Sorry, these are class 2 NIC's so they are in addition to your Class 1 payments which are due on your employment. Class 2 NIC does count towards your state pension.

zygurat789

Castle wrote: »

zygurat789 is right you have to pay them; so you may find it easier to pay them each year and claim them back after the end of the tax year, if you don't earn enough.

Sorry, these are class 2 NIC's so they are in addition to your Class 1 payments which are due on your employment. Class 2 NIC does count towards your state pension.

It always used to.