Help with Tax Codes on second job? 40%?

TinieT

I have a main job earning me £35,200 and just received a bonus of £2,800. I also do part time evening work which generates around £900-£1000 a month (pre-tax).

I'm currently being taxed at 20% on both jobs, 1500L on the main job and BR tax code on the second. However I'm aware that once you earn over £45,000 you will start getting taxed at 40%.

I've called HMRC a few times but never quite understand how it will work. I was earning £30,000 up until May and my pay rise has just kicked in now. I know they told me to include total untaxed pay for the year then add on the un-taxed monthly income. Do you know if they will take 40% off my normal main income or apply a new tax code to it? I don't really want it to get mixed up together

TELLIT01

40% tax will only be taken from the income over the £45k limit, not from your entire salary.

Dazed_and_confused

Do you know why your main tax code is so high?

In very tough terms you are looking at total salary of £50,000 so you are going to be well into the 40% tax bracket but no 40% tax will be paid based on your current tax codes so you are building up a tax debt as things stand.

You have a couple of options, get the second job tax code change to D0 so 40% is deducted from now on, long term you are unlikely to underpay and may be due a refund at the end of each year.

The alternative is to estimate what you will earn at each job (for the tax year as a whole) and inform HMRC of these new figures and they will recalculate your tax code, it will stay as BR on the second job but the main one will be altered to include an adjustment (reduction) to take into account that some 40% tax is due on your total income.

Neither method is going to be perfect given your mix of income amounts at each job but the first may be easier/more straightforward.

TinieT

Sorry my main tax code is 1150L