TAX DEDUCTIONS AND CAHNGES IN TAX CODES

talha_muhammad99

Hi,

I have 2 jobs: first is 35 hours (p/w) and second is 16 hours (p/w). I have started the first job around 6 month ago and from the first pay slip till now (5 slips) my tax code kept change  from 1275/L to 1089/L. 

I phoned HMRC and they said that i have 355£ outstanding in tax from april 2021 and they will cut more tax on first job and also deduce 20% from my second job in order to meet the TAX  and so on next month my code on the first payslip will be 998/L and VR on second one )for the rest of the year). For some reason on both payslips i have 1275/L code and so one the allowance is around 25000£ which is wrong and this should not happen.

My income from both jobs is around 25000£/ per year and i want to know whether the tax that is deducted is regarding this amount as i thought they deduce just from one job (35 hours) and not the second job (16 hours) as it is only part time.

Can you please tell me when tax code will get back to 1275/L and what is the best advice ?

Shall i leave like this and repay slowly the amount in tax that is due ?

PLEASE I NEED YOUR SUPPORT AND ADVICE.

Thanks in advance. 

Dazed_and_C0nfused

The number of hours to work really has no relevance, it is what you earn that matters.

But assuming you are earning more than £240/week at your 35hr job then you would normally have a main tax code there (usually ending L) and the other job would have 20% tax deducted (tax code BR).

You are unlikely to return to 1257L until April next year.  You could go back onto it now but that would involve paying a lot of tax (possibly 50%) in one or two weeks pay whereas HMRC are spreading it out between now and 5 April.

It is important you make sure that both employers use the new tax codes the next time they pay you (they get sent a separate notification just of the code itself, i.e. BR, not how it has been made up).

molerat

You underpaid tax last year for some reason so this year they are reclaiming that through the tax code on your main job.

They will deduct tax at BR code on the second job, correctly as long as the job does not put you into the higher tax bracket.

Your tax code will (should) go back to normal next tax year, the tax code is designed to recover that underpaid tax in monthly chunks throughout the rest of this tax year.

Hopefully the next payslip on the second job will show BR.  Be aware extra tax will be deducted once the BR is in operation because you will be underpaying with the 1257 code, if you informed the employer correctly they should have put you on a BR code straight away.

talha_muhammad99

Thanks for your support.

So, i have 355£ outstanding and now that i phoned HMRC regarding code issue. They will send new notification to both employers. Will i need to pay just 355£ or this amount will increase ?

Dazed_and_C0nfused

molerat said:

You underpaid tax last year for some reason so this year they are reclaiming that through the tax code on your main job.

They will deduct tax at BR code on the second job, correctly as long as the job does not put you into the higher tax bracket.

Your tax code will (should) go back to normal next tax year, the tax code is designed to recover that underpaid tax in monthly chunks throughout the rest of this tax year.

Hopefully the next payslip on the second job will show BR.  Be aware extra tax will be deducted once the BR is in operation because you will be underpaying with the 1257 code, if you informed the employer correctly they should have put you on a BR code straight away.

I think op owes tax for earlier in the current tax year and, in some instances, HMRC now start to collect this in year rather than start collecting it in the following year.

Dazed_and_C0nfused

talha_muhammad99 said:

Thanks for your support.

So, i have 355£ outstanding and now that i phoned HMRC regarding code issue. They will send new notification to both employers. Will i need to pay just 355£ or this amount will increase ?

You will pay extra time your 35hr/week employer pay you, the theory being that by April you will have paid off the £355.

Then this time next year HMRC will check to see if all is correct for the 2021:22 tax year and if not let you know.