Ending ESA & going into zero hour employment

nero33

Hi

A neighbour of mine has been on ESA for many years and then started doing Permitted Work for a couple of years.

He's now signed off from ESA and increased his hours last month but it's not a fixed hours contract.  It'll vary week to week.  That's his choice as he eases back into work.

His question is can he take employment from 2 separate companies (eg 3 days with one and 1 day with another one week; 1 day with one, 3 days with another week and so on)?

Neither would be a main employer.  Does he just work, get paid by both and each one just makes any necessary deductions?

Just need some advice on how he approaches this.

Thanks

TELLIT01

If he's an employee of both companies they would be reporting his income to HMRC.  He may be put on 'emergency' tax code initially.

nero33

TELLIT01 said:

If he's an employee of both companies they would be reporting his income to HMRC.  He may be put on 'emergency' tax code initially.

And he remains on an emergency tax code until he decides which is his main employer or does he need to contact HMRC to explain his situation as I did above?

Is this tax code a higher rate than a non emergency tax code? Thanks

peteuk

Either he can contact HMRC or they will make an assumption and apply his tax code to one (or split the tax code) 

Normally the tax code L1257 is applied to one wage, this allows £12570 to be earned tax free, anything above this will be taxed at 20%. 
If a tax code has W!,M1 or X then this is an emergency tax code (eg they cant work out the taxable amount at present.  Usually is applied to your first wage at a new employer. 
If a tax code has a K then nothing is being taxed. 

So two jobs, if he applies a single tax code to job A, they would normally calculate the yearly wage, then calculate how much Tx is payable per year an then divide by the months left in the tax year. If that job pays over the taxable amount then it is assumed the second job does not have a tax free amount so therefore everything should be taxed at 20%. Usual tax code for this is BR. 

It really doesnt matter which job he applies the tax free amount to, It will all be taxed at the same amount. 

nero33

Thanks for the replies.  He's also told me that neither company know about each other so does he have to inform either of them?

I.e. that he may be working for someone else as well (there'll never be a clash of work shifts) as one has a monthly rota and the other just call if and when he is required and there's no obligation for him to say yes.

kaMelo

nero33 said:

Thanks for the replies.  He's also told me that neither company know about each other so does he have to inform either of them?

I.e. that he may be working for someone else as well (there'll never be a clash of work shifts) as one has a monthly rota and the other just call if and when he is required and there's no obligation for him to say yes.

It depends on their contract, some employers require employees to seek permission before working for another employer.