Second job tax code and higher bracket

Debtdipped

Hello, I’m confused about what the correct tax code should be for my second job? Is it BR?

My first job is 3 days, includes student loan payments and personal allowance = gross annual income £24,500
My second job is 2 days = gross annual income £19,500

In the future my second job gross income will be a lot higher, meaning that I will be in the 40% tax bracket. What happens then?

What happens to student loan payments? As one job is giving some, the other isn’t.

Thanks.

nicechap

Speak to HMRC and give them the details of the 2 firms, they can provide appropriate tax codes to both firms and agree with you whether to give your tax free element to one job or spread across the two.

You're unlikey to hit the higher 40% tax bracket this year if you're just starting the second job now.

Have you looked at student loans website or called them?

Dazed_and_confused

Yes, the new job will be BR and on the numbers given that will be ok for the current tax year (assuming you aren't a Scottish resident for tax purposes).

But if the income from this job is going to increase then you will end up with a tax bill for 2018:19 as you will owe some higher rate tax.

The best way to minimise this and pay it as you go along is to contact HMRC in March next year, just before the new tax year starts, with as accurate as possible estimate of what you will earn from each company.

HMRC will then make an adjustment to your normal tax code to ensure some additional tax is paid. They won't normally change the BR tax code because the next code would be D0 and that would mean you paying 40% on all of the second job which would be too much tax.

System

Basically, any money (when the two salaries are combined) that goes over the threshold will be taxed at 40%.


Although, your two salaries don't add up to the threshold any way - it's £46,351

agrinnall

andydownes123 wrote: »

Basically, any money (when the two salaries are combined) that goes over the threshold will be taxed at 40%.


Although, your two salaries don't add up to the threshold any way - it's £46,351

But the OP makes it clear that it will be happening in the future.

Debtdipped wrote: »

In the future my second job gross income will be a lot higher, meaning that I will be in the 40% tax bracket. What happens then?

Dazed_and_confused

Basically, any money (when the two salaries are combined) that goes over the threshold will be taxed at 40%.

But not necessarily straight away as neither job on its own might be enough for 40% to be deducted by either of the employers.

Debtdipped

Thanks everyone