New job and tax

lookstraightahead

I've just taken a new part time job at my company which now means I'm paying tax. My previous job was under the tax threshold. So, April may, June and July are tax free and the rest of the final year will include tax. I've worked out my tax per month for my new salary, but will I get some of that back as it's not a whole year? Should I work out the tax I would pay over a year from both salaries, then multiply by 8 for the 8 months left? 

Dazed_and_C0nfused

Tax is due for the year as a whole, what happens in an individual pay period is ultimately irrelevant.

Are you being paid everything on one payslip or will you effectively have two separate jobs?

If the latter how much have you earned so far this tax year at your original job?

lookstraightahead

Dazed_and_C0nfused said:

Tax is due for the year as a whole, what happens in an individual pay period is ultimately irrelevant.

Are you being paid everything on one payslip or will you effectively have two separate jobs?

If the latter how much have you earned so far this tax year at your original job?

Thanks for your reply.

It's on one pay slip. I'm changing jobs internally, 

So from April to July I was/will be on the lower wage where no tax was due, and for the rest of the financial year (from august) I am paying tax. I was on about £9.5K for my PT job and now I'm on £18.5K.

Dazed_and_C0nfused

In that case the tax should be correct from day 1 and there would be nothing to claim back.

lookstraightahead

Dazed_and_C0nfused said:

In that case the tax should be correct from day 1 and there would be nothing to claim back.

Ok thank you, so will my tax be paid on an income on the tax year of 4/12 of 9.5k and 8/12 of 18.5k? Or 12/12 of £18.5k? I'm trying I suppose to work out whether I still get my £12570 tax free allowance this financial year. 

Altior

You'll always get the full allowance for the whole tax year eventually. You will only be charged income tax on the balance earned over the tax free allowance. So calculate what you expect to earn over the full tax year, subtract 12570 and multiply the answer by 0.2. 

Altior

There is another related factor to consider, if you are 22 or older, you will be crossing into the auto enrolment threshold for pensions. 

If you are that age, you should reach out to your line manager or appropriate HR team for information about your options, and how your employer handles pensions. 

Choirgrl

You’ll be taxed based on what you actually earn during the year, so yes that will be 4/12 of 9.5k and 8/12 of 18.5k. ( I haven’t had my morning coffee yet, but I think that works out at 15.5k) 

You should still have no tax deducted In August and September (because what you’ve earned in the year to that point will be under the cumulative tax allowance) and then tax will start to be deducted from October.

lookstraightahead

Choirgrl said:

You’ll be taxed based on what you actually earn during the year, so yes that will be 4/12 of 9.5k and 8/12 of 18.5k. ( I haven’t had my morning coffee yet, but I think that works out at 15.5k) 

You should still have no tax deducted In August and September (because what you’ve earned in the year to that point will be under the cumulative tax allowance) and then tax will start to be deducted from October.

Great, that's what I was thinking, although I will have only earned about £3600 this year by end of July. Either way it's not much tax.

lookstraightahead

Altior said:

There is another related factor to consider, if you are 22 or older, you will be crossing into the auto enrolment threshold for pensions. 

If you are that age, you should reach out to your line manager or appropriate HR team for information about your options, and how your employer handles pensions. 

Thank you - yes I already have an lgps pension. 

Savvy_Sue

Choirgrl said:

You should still have no tax deducted In August and September (because what you’ve earned in the year to that point will be under the cumulative tax allowance) and then tax will start to be deducted from October.

I'm not sure it works like that.

To keep it very simple, let's say gross pay in April, May, June and July is £1000 per month. No tax due.

In August, gross pay shoots up to £2000. HMRC assumes that's what you'll receive each month for the rest of the year, forecasts gross income for the year as £4000 + £16000. Tax due.

Now, here's the clever part. They check how much tax you've paid to date (none), and you start paying tax monthly EVEN THOUGH you haven't yet earned more than £12500, so that by the end of next March you've paid whats owed, and you pay roughly the same amount of tax each month.

That way HMRC gets money all through the tax year, and you don't get a nasty shock this autumn

In the same way, if you went back to £1000 per month, they would look at what you'd earned so far, how much tax you'd paid, and assume you'd get the £1000 for the rest of the tax year. You might get a refund, or just lower tax.

If your pay increases during the tax year, it means your net pay is smoothed out for the rest of the tax year, but it can mean your net pay goes down at the start of the new tax year, so watch out for that.