Income Tax on second job & tax bands

philphil1

Hi all
Hoping I can get a little advice from you knowledgeable people

I am being made redundant and about to start my 3 months notice period, which will be served on furlough.

I have some temporary work, which starts shortly, my current employer have advised it is ok for me to work elsewhere during my notice period.

My question is regarding income tax on the 'second' job.
I have read I will have to complete a new starter form when I start, I assume this is where I tell HMRC that it is my second job?

Regarding tax bands, are they calculated on a monthly basis?
For example (not real figures) if first job is 30k, and second is equivalent to 25k (but only temporary for few weeks), would I be paying the higher tax rate?

Or does PAYE work on a cumulative basis, so the 40% tax rate would only kick in as and when the 50k threshold is met?

Is there any other relevant info I need to be aware of when taking up two jobs?

Hope the questions make sense!

Many thanks in advance

Jeremy535897

You will need to tick statement C on the new starter checklist that your new employer will give you. That is likely to result in a BR code, so tax will be deducted at the basic rate, which is correct while you have two jobs. When you leave your first job and get your P45 and give it to your new employer, your new employer should get a code to correct the situation.

Grumpy_chap

It doesn't really matter what tax you pay through the year - it will all resolve when you do your tax return.

philphil1

Grumpy_chap said:

It doesn't really matter what tax you pay through the year - it will all resolve when you do your tax return.

Thanks,

Do PAYE employees do tax returns though?
I never have before as far as I know

The main reason for asking I guess, is to know if I need to put any of the earnings aside in case there are any underpayments in tax that I need to pay come the end of the tax year

philphil1

Jeremy535897 said:

You will need to tick statement C on the new starter checklist that your new employer will give you. That is likely to result in a BR code, so tax will be deducted at the basic rate, which is correct while you have two jobs. When you leave your first job and get your P45 and give it to your new employer, your new employer should get a code to correct the situation.

Thank you, makes sense 👍

Jeremy535897

If you don't complete a tax return, do not worry. While you have only your current job, every month you get 1/12 of your personal allowance against your income, and it works cumulatively. While you have two jobs, the first job will continue with 1/12 of your personal allowance a month, and the second job will all be taxed at basic rate. When you only have your second job, that job will change from BR to giving you your personal allowance monthly. On your figures, you won't earn enough to pay higher rate tax, but if you did, the code would ensure the correct tax was taken.

philphil1

Jeremy535897 said:

If you don't complete a tax return, do not worry. While you have only your current job, every month you get 1/12 of your personal allowance against your income, and it works cumulatively. While you have two jobs, the first job will continue with 1/12 of your personal allowance a month, and the second job will all be taxed at basic rate. When you only have your second job, that job will change from BR to giving you your personal allowance monthly. On your figures, you won't earn enough to pay higher rate tax, but if you did, the code would ensure the correct tax was taken.

Thank you, much appreciated