National Insurance/ Tax

jellie75

Hi,
I have a query regarding tax and national insurance. I work for the NHS as a band 5 nurse and have done so for 20 years. For the past 8.5 years I have worked as a night district nurse with lease car, which causes no end of problems with my tax code and I swing from year to year with me owing them and then them owing me. My husband has not worked for 6 years due to ill health, last year I claimed married couples allowance but unfortunately I earned just over £42,000 taking me into the 40% tax bracket which means this year I am paying it back.For the first time this year I have started working as a bank nurse with a different NHS Trust. This means I work 42 hours week contract with my main employer paid monthly and average 11.5 hours week paid weekly with the second employer. I pay 9.3% pension contributions in my main job, none in the 2nd job. At the start of the tax year I was notified my tax code was 712L due to the marriage allowance being paid back and the reduction due to my car. I was put on a BR code with the 2nd employer. At the beginning of July I received notice that due to information received, it was estimated I would go into the 40% tax bracket therefore my tax code for my main employer would change to 38L non cumulative. I phoned the tax office in a bit of a panic. After all, I don't work all these hours for fun, I have a mortgage, I support a husband and 2 teenagers, I need the money and dropping to a tax free allowance of only £330 seems major. After discussion, she agreed that my tax code for my main job would be 612L and my 2nd job would be D0. So from the middle of July my tax code (2nd job) has been D0. For my main job it was 712L april-June, 38L in July and 612L August to now. Unfortunately this means they are taking 50% tax on everything I earn in my 2nd job to make up for the time I was BR. As far as my NI goes, I am paying it to both employers. This month which is similar to most months my gross pay in my main employment is £3600 which I pay full NI for. I have just received my weekly payslip. I worked 34.5 hours over the previous 3 weeks, at £14.7012 ph (plus 30% unsocial hours). My gross pay was £659. I was taxed £329 and paid £60 in NI which is 18%, ( all other weeks have been 13.8%) which means I took home £269 for 34.5 hours. I am thoroughly confused with this and incredibly despondent that I have taken home 32% of the pay I earned. Does this all sounds correct? Many thanks in advance for advice.

sheramber

National insurance is charged in gross pay not net pay.

60/659x100 - 9%

Rhealea

Your NI on your 2nd job is correct.

£659 - £157 (weekly earnings threshold) x 12% (NICE rate) = £60.24.

Is there a reason you were paid 3 weeks hours on one weekly payslip?

jellie75

OK thanks that makes sense. I got confused reading something about 2% national insurance on higher rate pay. In this instance I got paid 3 weeks because they forgot to put my time sheet the previous week.however I work bank shifts which average one per week but as I work a varying roster in my main job means I work my extra hours where I can fit them in.

molerat

The 2 % only kicks in if you reach the higher threshold with one employer. Each job is considered separately and you get the NI free allowance with each.

chrisbur

jellie75 wrote: »

Hi,
I worked 34.5 hours over the previous 3 weeks, at £14.7012 ph (plus 30% unsocial hours). My gross pay was £659. I was taxed £329 and paid £60 in NI which is 18%, ( all other weeks have been 13.8%) which means I took home £269 for 34.5 hours. I am thoroughly confused with this and incredibly despondent that I have taken home 32% of the pay I earned. Does this all sounds correct? Many thanks in advance for advice.

Your employer has worked out your NI incorrectly. This payment should not have been treated as a single weekly payment but as three weekly payments and NI calculated separately for each payment.
Following comes from section 3.2 of CWG2 employers further guide to PAYE and NI at....

https://www.gov.uk/government/publications/cwg2-further-guide-to-paye-and-national-insurance-contributions/2016-to-2017-employer-further-guide-to-paye-and-nics

"Take the following action if you pay employees on a day other than their usual payday, for example, you bring the payday forward because of a bank holiday or you pay 2 months’ salaries together to employees who submit their timesheets late (mistimed payments).

If the actual date of payment and the usual payday are in the same tax year, treat the early or late payment as if it had been made at its usual time.

Example 1
Two separate weeks’ wages for weeks ending 6 June and 13 June are paid on 13 June. Work out NICs separately on each week’s payment..... "

It is also possible that you may end the tax year having paid more NI than is required. I would stress "possible" as really need to see end of year figures to check this. Broadly there is a maximum NI figure due for each level of earnings. If your earnings come from two or more employers and your total earnings are over the upper earnings limit you may have paid more NI than is required. I would suggest posting full figures at the year end so they can be checked.

[Deleted User]

In the original post - £42000 earnings do not take one into the higher rate tax bracket. The reason for the underpayment appears very unclear.

dori2o

[Deleted User] wrote:

In the original post - £42000 earnings do not take one into the higher rate tax bracket. The reason for the underpayment appears very unclear.

OP says they have a lease car. If this is through the NHS scheme this will generate a charge for a Benefit In Kind which when added to a salary in excess of £42k could mean OP has a total taxable income in excess of the 40% limits.


Just a thought OP, are you claiming all related job expenses?

I. e, uniform (per employment) , shoes/tights, professional subscriptions etc.

It wont make a massive difference but will reduce any underpayment accrued if you've not already claimed something you are due to claim.

jellie75

dori2o wrote: »

OP says they have a lease car. If this is through the NHS scheme this will generate a charge for a Benefit In Kind which when added to a salary in excess of £42k could mean OP has a total taxable income in excess of the 40% limits.


Just a thought OP, are you claiming all related job expenses?

I. e, uniform (per employment) , shoes/tights, professional subscriptions etc.

It wont make a massive difference but will reduce any underpayment accrued if you've not already claimed something you are due to claim.

Yes the lease car is through the NHS scheme, so my tax code is always reduced to reflect that. Yes I claim for uniform,shoes etc sorted that out last year!
I appreciate everybodys advice, thankyou. It's incredibly hard trying to give time to my daughters, looking after my husband and working the hours I do, every penny counts!