How will my income tax work please?

far2812

Hi All

I left a full time job in June 2017 (and had paid £1388.40 for this tax year based on £9820.00 Gross earnings).

I took 3 months off work - and have now started a part time job.

My question is - how will I be taxed in the new job? ie will I be paying 20% on the full amount I earn?

I'm just not sure how tax works?

Thanks in advance

xx

Comms69

You earned £9820 in 2 months? - are you sure?

far2812

I earned £9820 in 3 months gross!

agrinnall

Without knowing what you'll be earning in the new job or what your tax code is it's impossible to be certain what tax will be due, but it's likely that there is some of your personal allowance still to be used so you'll have some untaxed pay and some that is taxed at 20%.

chrisbur

far2812 wrote: »

Hi All

I left a full time job in June 2017 (and had paid £1388.40 for this tax year based on £9820.00 Gross earnings).

I took 3 months off work - and have now started a part time job.

My question is - how will I be taxed in the new job? ie will I be paying 20% on the full amount I earn?

I'm just not sure how tax works?

Thanks in advance

xx

Have you given your new employer your P45. Assuming that you have, you have not had any taxable income/benefit between jobs and your tax code was cumulative your pay from your old job will be added to that from your new job and a new tax due figure calculated. This will be compared to your tax paid from your P45 and an adjustment will be made. So if the tax due is less than the tax paid a tax refund will be given, if the other way round tax will be deducted. This will then be repeated at each payday.

More details will enable a better answer. Details of P45 and your new earnings are needed.

cte1111

PAYE works as if you will be earning the same amount each month, on the whole. So in your first job, they will have effectively knocked off 1/12 of your tax allowance each month, then taxed the remainder.

You've now had a break without earning. Your new employer, presuming you give them a P45 from your old job, will spread the remaining tax allowance across the remaining months of the year.

So far, you have used up a quarter of your tax allowance of £11,500. The remaining allowance of £8625 will be available for your earnings for the rest of this financial year. Say you start work again in October, then you would be able to earn £1437 each month before starting paying tax. You will still have to pay national insurance, this is calculated differently.

chrisbur

cte1111 wrote: »

PAYE works as if you will be earning the same amount each month, on the whole. So in your first job, they will have effectively knocked off 1/12 of your tax allowance each month, then taxed the remainder.

You've now had a break without earning. Your new employer, presuming you give them a P45 from your old job, will spread the remaining tax allowance across the remaining months of the year.

So far, you have used up a quarter of your tax allowance of £11,500. The remaining allowance of £8625 will be available for your earnings for the rest of this financial year. Say you start work again in October, then you would be able to earn £1437 each month before starting paying tax. You will still have to pay national insurance, this is calculated differently.

Sorry but this is not how PAYE works.
The tax allowance is given in equal portions for each month whether you are working or not.
Assuming a tax code of 1150L this works out as about £959 for each month. So as at month 3 on leaving the tax allowance would be £2877.
Assuming the first pay in the new job falls in month 6 then the tax allowance then would be £5754 this would be set against the earnings from the old job plus the earnings for the first month in the new job. The tax due on this figure would be compared to the tax paid so far and if tax due is less than tax paid a tax refund is given, if tax due is greater than tax paid then tax is deducted.
The next month the tax allowance increases by £959 and the whole process is repeated, this continues for the rest of the year.

After the initial correction in month 6 if the OP's earnings in the new job were lower than £959 then a tax refund would be due every month until either all had been refunded or the tax year ended. If they were greater than £959 tax would be due.

If the OP gives actual figures it will be easier to understand.

EDIT Have just checked figures the OP is on 1150 tax code.