Income tax on part time secondary job

Tommy1975

Hi, I currently earn just under £44000 per year working around 42 hours per week. My wife earns just above minimum wage but it works around the kids. I already pay 13.5% of my wages to the pension scheme (which I can't opt out of without losing most of what I've already paid in) as well as the usual income tax which leaves around £2400 per month take home. Things are beginning to get difficult financially and so its fallen on me to look for a second part time job to get us out of trouble. Except once I've earned £6000 anything else I earn will be taxed at 40% which would be fine if I was earning £300 per day but I won't, it's more like £150 if I have a really good day. One days work covers the weekly outlay ect. By the time I pay 40% on the rest I'll be taking home less than minimum wage per hour which means there isn't enough hours left in my day to make it worth doing, unless I opt to never sleep. If me and my wife both earned £49000 each per year we'd have a combined income of £98000 per year taxed at 20%. Whereas we have a combined income of about £56000 and then subject to 40% tax on anything else. So am I allowed to used the rest of my wife's tax allowance for my potential part time earnings or do I just give up and accept there's nothing I can do to get us out of this? For context, I live in London. So this may sound like a decent house income to some people, but here in London the cost of living is extremely expensive and we really are struggling to make ends meet. No socialising, no niceties. Everything goes on the cheapest food we can get and bills. And next year our mortgage goes up, so I really need a plan that doesn't result in me working ridiculous hours for very little reward. Any advice on this tax issue would be greatly appreciated. Thanks

Phoenix72

First suggestion - get some paragraphs as that is a wall of text that is difficult to read.

A few questions, why would you lose most of what you paid in if you opted out of pension scheme? (Not that it would be a good idea)

Are your pension contributions taken from gross or net pay? How much does your wife actually earn?

kempiejon

Tommy1975 said:
or do I just give up and accept there's nothing I can do to get us out of this? For context, I live in London. So this may sound like a decent house income to some people, but here in London the cost of living is extremely expensive and we really are struggling to make ends meet. No socialising, no niceties. Everything goes on the cheapest food we can get and bills. And next year our mortgage goes up, so I really need a plan that doesn't result in me working ridiculous hours for very little reward. Any advice on this tax issue would be greatly appreciated. Thanks

Well that all sounds like no quality of life at all. Miserable, not doing anything to recharge and reset - no work life balance and you're looking for more work. You have the lowest quality food, not able to cope and rising prices still expected. The problem is not tax though. It seems you and your family if not already will soon be at risk of mental and physical illness cause but that little lot of poor food and environment. Tommy1975 please do not give up, find another solution I think you need to make a change. I hope you see that. Or rather you and your family need to get behind making your lot better. You need thier support, they must want it better too. Good luck.

theoretica

Tommy1975 said:

Hi, I currently earn just under £44000 per year working around 42 hours per week. [...]. I already pay 13.5% of my wages to the pension scheme [...] Except once I've earned £6000 anything else I earn will be taxed at 40%

Aren't your pension contributions lowering your taxable pay?  So you can earn another £12k at basic rate before the higher rate hits?

Flugelhorn

theoretica said:

Tommy1975 said:

Hi, I currently earn just under £44000 per year working around 42 hours per week. [...]. I already pay 13.5% of my wages to the pension scheme [...] Except once I've earned £6000 anything else I earn will be taxed at 40%

Aren't your pension contributions lowering your taxable pay?  So you can earn another £12k at basic rate before the higher rate hits?

looks like that must be the case - there is 11-12k available 

Flugelhorn

Really tricky - TBH you need to stop chasing round trying to make this work - ever thought of moving somewhere else? 

Other thing to do is to go through the family budget really carefully to see what the options are for cutting down a bit or saving expenditure 

Dazed_and_C0nfused

Bookworm105 said:

she is allowed to transfer 10% of her personal allowance to you.
nothing more, read this Marriage Allowance: How it works - GOV.UK (www.gov.uk)

There are many families with a LOT less than you have who also live ion London yet they cut their cloth accordingly and live on it. Minimum wage rate is for those for whom that is their entire income rate, so wailing that as a 40% taxpayer it's not enough is just pathetic.

But the op won't be eligible for Marriage Allowance if they are a higher rate payer.  Although they may well not be with the decent level of pension contributions they are making.

Bookworm105

Dazed_and_C0nfused said:

Bookworm105 said:

she is allowed to transfer 10% of her personal allowance to you.
nothing more, read this Marriage Allowance: How it works - GOV.UK (www.gov.uk)

There are many families with a LOT less than you have who also live ion London yet they cut their cloth accordingly and live on it. Minimum wage rate is for those for whom that is their entire income rate, so wailing that as a 40% taxpayer it's not enough is just pathetic.

But the op won't be eligible for Marriage Allowance if they are a higher rate payer.  Although they may well not be with the decent level of pension contributions they are making.

correct, I got distracted by all the woe is me wailing.

Tommy1975

Phoenix72 said:

First suggestion - get some paragraphs as that is a wall of text that is difficult to read.

A few questions, why would you lose most of what you paid in if you opted out of pension scheme? (Not that it would be a good idea)

Are your pension contributions taken from gross or net pay? How much does your wife actually earn?

My apologies, I'm dyslexic and writing isn't my strong point. All in all I think I managed to cover everything quite well for me. All be it with poor grammer which I can only apologise for.

If I opt out of my pension it's frozen until state pension ages with a percentage taken each year until I reach that age. 

My pension contributions are taken from my gross pay and my wife earns around £12000 per year.

The figures I give are the figures I have. I have a fair understanding of the pension situation and opting out isn't an option. So really I need to know if there's income tax options on secondary employment as realistically that's our only way out of our situation. Providing it isn't all taken by the tax man. Or there's no point

Hope you like the paragraphs 🤣

Tommy1975

kempiejon said:

Tommy1975 said:
or do I just give up and accept there's nothing I can do to get us out of this? For context, I live in London. So this may sound like a decent house income to some people, but here in London the cost of living is extremely expensive and we really are struggling to make ends meet. No socialising, no niceties. Everything goes on the cheapest food we can get and bills. And next year our mortgage goes up, so I really need a plan that doesn't result in me working ridiculous hours for very little reward. Any advice on this tax issue would be greatly appreciated. Thanks

Well that all sounds like no quality of life at all. Miserable, not doing anything to recharge and reset - no work life balance and you're looking for more work. You have the lowest quality food, not able to cope and rising prices still expected. The problem is not tax though. It seems you and your family if not already will soon be at risk of mental and physical illness cause but that little lot of poor food and environment. Tommy1975 please do not give up, find another solution I think you need to make a change. I hope you see that. Or rather you and your family need to get behind making your lot better. You need thier support, they must want it better too. Good luck.

To be honest I'm used to things being this way now. Due to the governments austerity policy things have been like this for over 10 years now and each year gets harder than the last. There's very little left to cut back on and so the only option is either my wife earns more or I do. She doesn't have the experience or qualifications to earn any more in any other industry and doesn't want to take on even more stress in the industry she's in by going for a higher paying but more stressful position. so it's down to me to take on even more wherever I can. It's that or lose our home. No choice unfortunately. We did used to have a life once. We even had holidays abroad, went out occasionally, had days out with the kids. But like a lot of people, that's not been possible for a long time now.

Tommy1975

theoretica said:

Tommy1975 said:

Hi, I currently earn just under £44000 per year working around 42 hours per week. [...]. I already pay 13.5% of my wages to the pension scheme [...] Except once I've earned £6000 anything else I earn will be taxed at 40%

Aren't your pension contributions lowering your taxable pay?  So you can earn another £12k at basic rate before the higher rate hits?

I don't know, is that the case? I assumed you have a tax threshold that stands wether you pay into a pension or not. But I'm on here for any advice I can get, so if you know this to be the case it would be massively helpful. Do you know where I can get a definitive answer to that one?