Tax issue when switching jobs

BoiledBreadTomatoSauce

Hi all

My current contract expires on 10th May and I have signed a contract for a new role elsewhere. The only issue is that the new employers want me to start on 9th May.

I have annual leave to use up so my current employers are fine with me effectively finishing a few days early and using leave up until the 10th,. However, this will mean that i'm technically employed by both organisations for the 9th and 10th May and will be paid by both organisations for those 2 days.

Does anyone have an idea what this will mean from a tax point of view? Will it just bump me up a few brackets for the 2 days or will I go on emergency tax / get hammered until I explain otherwise to HMRC?

BoGoF

If you don't have a P45 to give to the new employer then you will be put on emergency tax.

Added complication is that if you are monthly paid and your employer pays you up to Month 2 you will have used your tax free allowance for that month at the old job.

BoiledBreadTomatoSauce

Would a P46 solve the problem? I can ask the old employer for a P45 as soon as I leave and give it to the new employer.

My old employer pays 4 weekly and the pay on the 31st May will be my earnings from April 26th to May 10th plus any holiday left over.

New employer pays monthly on the final day of the Month so will also pay me on 31st May.

molerat

As long as your old employer gives you a correctly completed P45 and the new employer processes it before your first pay packet there will be no over / under tax implications. P46 has been replaced by the Starter Checklist and will not really help - you will have to incorrectly tick box C to be taxed close to correctly ! - in fact it will likely help you to be under taxed due to receiving 2 monthly tax free allowances for May and, depending on the tax rate you pay, you may get hit with £200 - £400 extra tax at the end of June so keep it aside.

BoiledBreadTomatoSauce

Great thanks, I'll get the P45 in asap then and hope for the best!

cr1mson

You are presupposing that your new employer will pay you on 31st May. Some organisations are not that organised!

Savvy_Sue

cr1mson wrote: »

You are presupposing that your new employer will pay you on 31st May. Some organisations are not that organised!

Not necessarily a case of not being that organised: deadlines can be very early in the month. However, it's always worth asking if an advance is possible.