2 Jobs & Confusing advice

NurseMoneySaver1122

Hi all

I have had several chats with HMRC asking about tax code advice and how best to allocate my tax free allowance, with mixed advice every time, so I'm really confused.  Just calculated I'm owed approx £1000 tax rebate. Whilst that's a nice bonus, I'm keen to sort this out so I am paying the right tax for this tax year.

I've been told:
1)   Allocate tax free allowance to cleaning role so that is tax free income, with reamining tax free allowance to nurse role.
2)  Split tax free allowance between the two jobs, paying tax on both.


Background on employment for tax year 2024-25:

Nurse earning approx £1500 per month gross (potential earning to fluctuate but v.rarely) 
Start date: Sep 2024
Tax code 340T M1

Cleaner earning £460 4 weekly gross (earnings do not fluctuate).
Start date: Dec 2019
Tax code 576L

Previous employment: from Jan 2024-Aug 2024 (zero hour contract job earning minimal amount).


Is there any helpful advice about what I should do for the best?

TheSpectator

The 'best' option would be option 3 - allocate your personal allowance to the nursing job as that is the highest and exceeds the personal allowance and have the cleaning job taxed at basic rate.

If you have set up your Personal Tax account then update your estimated income from both sources and the allowance should be allocated per option 3.

Sarahspangles

I agree with the Spectator - your nursing job exceeds your personal allowance and if you were on a straightforward 1257L code any variable income will self-adjust as you go along. Then pay a basic rate on the other job.

[Deleted User]

I too would agree with The Spectator and Sarah Spangles. 

There seems to be a tendency these days for HMRC to ‘cover’ the lower paid job with allowances, resulting in no tax payable at that source with the balance allocated to the main source. In this case, for example, 598T at the lower source of income. (How do HMRC arrive at 576T?)

I have never understood this approach - all allowances at main source and BR at second would always collect the correct tax. 

Now, is there any reason why the op does not benefit from the full personal allowance? Adding those two codes equates to a restricted allowance of 9160 (up to 9169).

Perhaps the op is quoting off payslips for 2024/25 tax year? What are codes for this tax year?

Sarahspangles

The approach for last year could have been different because the nursing role started in September, part way through the year. Presumably OP is being taxed on something else like savings interest

Dazed_and_C0nfused

In 2024-25 there was a third job to factor in.

Although the op updating their estimated pay/earnings online could get them the right outcome numerically it might be worth them speaking to HMRC and saying they wish to have the nurse role as their main job and the cleaner as a second job.

That would mean the L code would switch to the nurse role and avoid complications going forward.  BR code could then be used at the cleaning job.  And 1257L for the nurse role.

If they don't bother with that the likely outcome is 598L code at the cleaning job and 659T at the nursing job.

Bookworm225

Nurse job is (was) a M1 code so that will not help but seems reasonable if it started in Sept. Should auto correct now we are in new tax year 

as others say, going forward: all (1257L) on the nursing job, with BR (or potentially 0T) on the cleaning job should ensure all tax collected correctly 

.

NurseMoneySaver1122

Thank you for all the replies.  And it seems the consensus is on "option 3".  So I don't doubt this is sound advice.

Can I just clarify why option 1 (allocate tax free allowance to cleaning role so that is tax free income, with remaining tax free allowance to nurse role), would not ensure tax is collected correctly in the same way?

Nomunnofun1 said "I have never understood this approach - all allowances at main source and BR at second would always collect the correct tax".

My brain is not getting passed seeing this option as simpler; being taxed with 1 job only, as opposed to both.  But it seems people agree that this is likely to result in paying incorrect tax. I just don't understand why?

Apologies for my naivety; I'm just finding two job tax situation mind boggling!

Sarahspangles

NurseMoneySaver1122 said:

Thank you for all the replies.  And it seems the consensus is on "option 3".  So I don't doubt this is sound advice.

Can I just clarify why option 1 (allocate tax free allowance to cleaning role so that is tax free income, with remaining tax free allowance to nurse role), would not ensure tax is collected correctly in the same way?

Nomunnofun1 said "I have never understood this approach - all allowances at main source and BR at second would always collect the correct tax".

My brain is not getting passed seeing this option as simpler; being taxed with 1 job only, as opposed to both.  But it seems people agree that this is likely to result in paying incorrect tax. I just don't understand why?

Apologies for my naivety; I'm just finding two job tax situation mind boggling!

It shouldn’t result in the wrong tax. But if you have your personal allowance split and allocated in chunks to different roles, and then you leave one role, or the amount you earn falls for some reason, you may not use all that chunk of allowance. That seems to be what happened to you last year?

If you may be footloose with jobs, that’s a good reason to get into the habit of using your personal tax account (or the version in the HMRC app) to update changes in employment and estimated income. PAYE notices of coding are an attempt by HMRC to take the correct tax during the year, but this is always a ‘provisional’ figure until after the end of the tax year when they run the P800 process. However the provisional figure will be more accurate if you’ve kept your employment details up to date.

[Deleted User]

NurseMoneySaver1122 said:

Thank you for all the replies.  And it seems the consensus is on "option 3".  So I don't doubt this is sound advice.

Can I just clarify why option 1 (allocate tax free allowance to cleaning role so that is tax free income, with remaining tax free allowance to nurse role), would not ensure tax is collected correctly in the same way?

Nomunnofun1 said "I have never understood this approach - all allowances at main source and BR at second would always collect the correct tax".

My brain is not getting passed seeing this option as simpler; being taxed with 1 job only, as opposed to both.  But it seems people agree that this is likely to result in paying incorrect tax. I just don't understand why?

Apologies for my naivety; I'm just finding two job tax situation mind boggling!

I hope that you meant ‘correct tax’.

Simply put, that would mean that all of your personal allowances would be fully utilised at your main job and the correct tax would be paid at that source. Your second job would have tax deducted at 20% which would also be correct. 

Moreover, where you to cease the second job there would be no necessity to have the code at your main job adjusted because some of your tax free allowance was being used at this second job and would need to revert to your main job - if that woolly phraseology makes sense. 

NurseMoneySaver1122

Thank you for clarifying. 

I’ve called HMRC this morning and requested the above.  He said because I have received 1 pay from cleaning job for this tax year already, it has to be adjusted.  So new tax codes are:

Main Nurse job: 1211LX
cleaning job: BRX

I’ve look the ‘X’ part up, but not entirely sure. Presuming it’s to do with the 1 pay received from cleaning job already this tax year.

Do these look correct?

One final question, regarding estimated income. The estimate I’ve given is just my contracted salary. If I do any overtime, am I supposed to be updating that expected amount each time?

Many thanks in advance for everyone’s help!