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Reducing 40% taxation


I hope someone can assist. I have 2 jobs with a combined income 60k approx. In order to reduce my tax, I took out the salary sacrifice (into my pension) option with my main employer to avoid paying 40% tax. I have only just started this but it seems to be working well with my main employer as I can see in my payslip the reduced taxation. However in my second job I am still being taxed at all earnings at 40% - why is this ? my salary reduction has definitely taken me into the 20 % bracket, so why has this not changed. Also none of my 2 tax codes have changed? Should they ? Does the HMRC automatically know you salary has reduced and calculate accordingly or do you need to advise them ?
Comments
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You'd need to amend the expected annual income from each stream yourself within your online personal tax account if you wanted the tax codes to change mid-year, otherwise it'll resolve itself once the full tax year is reconciled in the autumn.1
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Crazydude7561 said:
I hope someone can assist. I have 2 jobs with a combined income 60k approx. In order to reduce my tax, I took out the salary sacrifice (into my pension) option with my main employer to avoid paying 40% tax. I have only just started this but it seems to be working well with my main employer as I can see in my payslip the reduced taxation. However in my second job I am still being taxed at all earnings at 40% - why is this ? my salary reduction has definitely taken me into the 20 % bracket, so why has this not changed. Also none of my 2 tax codes have changed? Should they ? Does the HMRC automatically know you salary has reduced and calculate accordingly or do you need to advise them ?
If salary sacrifice means the taxable earnings from that main job will be less than previously expected then you can update that via your Personal Tax Account. It is the pay amount you expect to see on your P60 which counts.
You might as well update both jobs so HMRC have as accurate information as possible.
By making that update new codes will be calculated and you will get a message if one or both changes.1
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