Tax queries

Timothyayre

Morning, I am just looking for some help with some tax queries. I did ring HMRC but their responses were not totally clear. 

I earn 43,000 taxable pay through my main job but this summer I have done a temporary job that will push my total earnings just above 50K when I receive all of the pay later this month. Additionally, I may get a pay rise in September which will push the earnings up on my main job. 

How will HMRC recoup the 40%? Will it be a tax code change this year or will it change in the next tax year? I'm worried they will assume that my earnings have changed permanently - next year I will likely earn below the 50K mark again.

Also, I currently receive marriage allowance. Obviously I will need to pay some back based on my earnings this year. The man on the phone seemed to imply this would be automatic and I wouldn't need to do anything - does that sound right?

Finally, we receive child benefit. I know this will be affected but we want it to carry on so that my wife gets national insurance credits. Will I need to do a self assessment (which I don't normally do) or can I just ring up and pay the extra money to them? They were a bit unclear about this on the phone.

Thanks

Dazed_and_C0nfused

If your adjusted net income is £50,100 or more then yes you will need to do a Self Assessment return.

The tax owed just from Marriage Allowance could be around £500.

The tax from the second job will depend on what tax code is used.

The HICBC will add even more.

Have you considered extra pension contributions to avoid all this?

sheramber

What code has been operated on your summer job?

Did you complete the starter form stating you had another job?

Albermarle

If your adjusted net income is £50,100 or more then yes you will need to do a Self Assessment return.

Is that because of the HICBC? I thought just being a higher rate taxpayer does not mean you need to fill out an SA?

yorkiechick

Albermarle said:

If your adjusted net income is £50,100 or more then yes you will need to do a Self Assessment return.

Is that because of the HICBC? I thought just being a higher rate taxpayer does not mean you need to fill out an SA?

If you are liable for the HICBC i.e. your adjusted net salary is above £50,000 then you need to submit a tax return.

Dazed_and_C0nfused

Albermarle said:

If your adjusted net income is £50,100 or more then yes you will need to do a Self Assessment return.

Is that because of the HICBC? I thought just being a higher rate taxpayer does not mean you need to fill out an SA?

Yes, the op mentioned this,

Finally, we receive child benefit

And the £50,100 is because HICBC is charged in 1% increments so there is no charge until ANI reaches £50,100.

Timothyayre

Thank you everyone. The second job is BR and I did a starter checklist. Both jobs are PAYE.

Would it be best to cancel marriage tax allowance now to avoid a big charge in April?

Dazed_and_C0nfused

Timothyayre said:

Thank you everyone. The second job is BR and I did a starter checklist. Both jobs are PAYE.

Would it be best to cancel marriage tax allowance now to avoid a big charge in April?

If you don't plan on taking steps to remain a basic rate taxpayer then it would probably be a sensible thing to do.

Timothyayre

Just to add, I've paid tax at 20% on both main and secondary jobs up to now. The secondary job is paid in weekly installments. I'll only pass 50K when I get my last payment from my summer job at the end of the summer.

Timothyayre

Dazed_and_C0nfused said:

Timothyayre said:

Thank you everyone. The second job is BR and I did a starter checklist. Both jobs are PAYE.

Would it be best to cancel marriage tax allowance now to avoid a big charge in April?

If you don't plan on taking steps to remain a basic rate taxpayer then it would probably be a sensible thing to do.

Thank you for the advice - so to stay BR I would need to work out how much extra to sacrifice from my salary into my pension?

Dazed_and_C0nfused

Yes.  Because of Marriage Allowance (worth £252) and HICBC it makes additional pension contributions particularly attractive.

You would need to look at the actual figures but you might be surprised at what you save overall just by contributing a bit more into your pension.