Employed in two places at same time

w00519772

I was recently offered another job. I handed in my notice and my last day is: 12/09/16. I am planning to extend my notice period to: 16/09/16 to allow extra time for knowledge transfer.

I recently discovered that I have lost my annual leave entitlement for September (2 days - about £200 after tax) because I handed in my notice part way through the month (my contract of employment states that I must complete the month to get the holiday pay for that month.

HR have said that I can specify my last day as 06/10/2016 i.e. my last working day will be 16/09/16 and then I will be on leave between 17/09/2016 and 06/10/16 (14 working days i.e. the 12 days I have accrued so far this year plus the two days for September - then I will get the holiday pay for September).

HR have warned me that there are tax implications doing this i.e. working at two places at the same time. What are those implications? My current salary is: £37,200 and my new salary is £43,900.

Dazed_and_confused

They are quite correct, there are tax implications. Put simply you will pay more tax if you do this.

The reason you will pay more tax is that you will be earning more from your current employer.

On those salary levels I guess you're monthly paid so you should make sure you hand your P45 from the old employer into the the new employer as soon as you receive it.

The bit that can be confusing/complicated is that you could be paid twice in one tax month i.e 6:10:16 - 5:11:16, once by your current employer and once by your new employer. Your current employer will use your normal tax code and you may receive a tax refund in your final payslip if your final payment is quite small.

The new employer will often use the "emergency" tax code in your first payment with them (in the absence of your P45) and this will lead you to you underpaying tax because you will have received two lots of tax allowances in one month.

If you then hand in your P45 (and are on a cumulative tax code) this will be adjusted the next time your new employer pays you i.e you will pay more tax one month, then everything will settle down and be back to normal

booksurr

if you start the new job before 6/10/16 then you will have 2 jobs simultaneously and your tax free allowance will still be being used up in full by the old job. Therefore you will pay a bit more tax than norm in the new job for the first month.

once your P45 comes through and your tax free allowance is transferred to the new job there will be a correction done to your tax paid to date and that will be the end of that. You will have paid exactly what you should have done, no more, no less but it will take 2 months for that to even out as month 1 in new job will be "high" and month 2 will be "adjustment"

w00519772

Dazed_and_confused wrote: »

They are quite correct, there are tax implications. Put simply you will pay more tax if you do this.

The reason you will pay more tax is that you will be earning more from your current employer.

Surely it does not matter if I am paid the 12 days holiday entitlement (without September entitlement) or take 14 days (including September entitlement) of leave after my last day.


I still have to pay tax on the additional income, don't I?

w00519772

booksurr wrote: »

if you start the new job before 6/10/16 then you will have 2 jobs simultaneously and your tax free allowance will still be being used up in full by the old job. Therefore you will pay a bit more tax than norm in the new job for the first month.

once your P45 comes through and your tax free allowance is transferred to the new job there will be a correction done to your tax paid to date and that will be the end of that. You will have paid exactly what you should have done, no more, no less but it will take 2 months for that to even out as month 1 in new job will be "high" and month 2 will be "adjustment"

On that basis, it is worth doing this. Do you agree?

Dazed_and_confused

Your new salary (when paid for a full tax year) is approaching higher rate tax levels so you might need to consider other tax related things such as savings interest (if you have any ) as being higher rate impacts the personal savings allowance and may make pension contributions more attractive.

Dazed_and_confused

Surely it does not matter if I am paid the 12 days holiday entitlement (without September entitlement) or take 14 days (including September entitlement) of leave after my last day.

It matters in as much as you are earning more so have to pay more tax. In exactly the same way as accepting the new job offer will result in you paying more tax - you will be earning nearly 7k a year more and have more tax to pay as a result of this.

Savvy_Sue

w00519772 wrote: »

I recently discovered that I have lost my annual leave entitlement for September (2 days - about £200 after tax) because I handed in my notice part way through the month (my contract of employment states that I must complete the month to get the holiday pay for that month.

I think they're wrong about that: your leave entitlement starts to accrue from the first day you start, and ends on the day you leave. Doesn't matter when you give notice.

ceh209

Savvy_Sue wrote: »

I think they're wrong about that: your leave entitlement starts to accrue from the first day you start, and ends on the day you leave. Doesn't matter when you give notice.

For statutory holiday entitlement yes, but if it's contractual entitlement above statutory, then they can apply rules like this.

Savvy_Sue

ceh209 wrote: »

For statutory holiday entitlement yes, but if it's contractual entitlement above statutory, then they can apply rules like this.

True, but in that case they ought to word it better IMO. I don't see how they can just say "you don't get any leave entitlement if you resign part-way through the month".

booksurr

Savvy_Sue wrote: »

True, but in that case they ought to word it better IMO. I don't see how they can just say "you don't get any leave entitlement if you resign part-way through the month".

in my experience it is normal for terms and conditions of employment to list in fine detail how holiday entitlement accrues in both your first year of employment and upon giving notice. It is very fair to all concerned then as you know exactly where you stand and can plan accordingly. Indeed at one place where the annual entitlement give rise to an odd number per month there was a table showing what you got each month and there were a couple of points in the year where there was a distinct advantage to starting/leaving that month because they were the catch up months when you got 3 days instead of 2 as the entitlement - of course if you left at other times it was perhaps not seen in such generous light, but then as it was a salaried post not an hourly paid post what else can you do? Try claiming 2.3335 days leave per month as the mathematical entitlement - LOL!