2nd employment tax codes / wrong way round?

gregc · 7 October 2017 at 12:05AM

I have always had a single, salaried 'main income'. My employer has always changed frequently as I move around within the bigger organisation, and generally this goes smoothly with the use of P45s to new employer. I've never had a different situation.

2 months ago however, I took on a 'secondary employment'. It is basically a zero hours thing with some adhoc work intermittently going on it. Normally this would have been marked on an HMRC starter checklist as 'already having another job' (option C).

Now at the time I started this, I just happened to be having a 3 month gap in what I term my 'main employment', so this secondary job got marked as being my only job (option

, with my tax code and all prior tax totals for the year going over to these paychecks.

I am now about to recommence my 'main employment' again with a new employer. I will presumably have to say that I 'already have a job' on the form (option C), as my secondary employment is going to continue alongside. I am imagining the situation that will occur here is that my tax code will stay with my secondary zero hours employer, and I will end up with a BR tax code on my main employment.

My secondary employment is only likely to be 10-15% of my main employment. My main employment alone will put me into 40% tax bracket. I complete SA Tax returns.

Do I have the right understanding that one of my jobs will have a normal tax code (with personal allowance), and one will be BR (without allowance)?
Would it normally be the case that a secondary (smaller) employment would have the BR code? Am I about to end up with it the wrong way around as my secondary job came first? Does it matter?
- Ideally, I want PAYE tax coming off sensibly, ending up close to being correct at the end of the year, and not leaving me with either a tax bill or needing a refund. To that end, I think it makes sense for the secondary income to be taxed at 40%, and I understand I can change the tax code to D0.

Basically:
What will happen as it is? (which will get the allowance tax code)
What do I want to happen? (which do I want to have allowance tax code)
If it's different, how do I make it happen? (e.g. swap them over)

Thanks in advance for advice/insight!

badmemory · 7 October 2017 at 6:00AM

Initially just tick the right box. Then when the notification comes from HMRC check what it says carefully. If it is going to give the outcome you need (payment of all tax required but no more than that) then you need to do absolutely nothing. If it is going to give you an incorrect outcome then a quick call (before 8am tends to be best) can get them to change it to the right way around. It may even be possible to sort it via your personal tax account, but, as this is fairly new, I am reluctant to offer it as a solution.

00ec25 · 7 October 2017 at 8:37AM

as Badmemory says, and as you have identified, you want the code on the second job to be D0 given you are already a higher rate taxpayer so "need" the second job to be taxed at 40%, not at basic rate

gregc · 7 October 2017 at 10:31AM

Thanks for the early replies! I will wait until new employer setup and then speak to HMRC if not right. I will see if I can do anything online as I do it, and post back with results.

1) Just as a point of wonder (I have no intention)... Do people ever deliberately try to end up with a situation where they're underpaying tax until self-assessment time on the basis of investing it for the interest? Is it allowed or do they prevent this somehow? I guess I would end up there if I don't swap tax codes around and don't change to D0.

2) And just another Q to complete my understanding! If you have 2 jobs (one on personal allowance tax code / one on BR), and you quite the first job (so you're left with the BR) - would your tax code automatically move over, would you give a P45 to your new employer, or would you speak to HMRC?

chrisbur · 7 October 2017 at 12:21PM

gregc wrote: »

Thanks for the early replies!

2) And just another Q to complete my understanding! If you have 2 jobs (one on personal allowance tax code / one on BR), and you quite the first job (so you're left with the BR) - would your tax code automatically move over, would you give a P45 to your new employer, or would you speak to HMRC?

The following is HMRC advice to employers if this happens....

"Existing employee gives you a form P45
If an existing employee gives you a form P45 from a second job they have
just left you should tell them to send the P45 Part 3 to:
HM Revenue & Customs
Regional Post Room
St Mungo’s Rd
CUMBERNAULD
G67 1YZ
We will review the tax code and issue an amended one if appropriate"

gregc · 28 January 2018 at 1:45AM

Just to complete the thread...
All was sorted in the end with a helpful call to HMRC, as the tax codes needed reversing. They were happy to go through quite complicated circumstances to properly work out estimated earnings for the year to get it right. I couldn't see any way of doing this in the online account - I think it would currently always guide you to speaking to them.

dori2o · 28 January 2018 at 1:54AM

gregc wrote: »

Just to complete the thread...
All was sorted in the end with a helpful call to HMRC, as the tax codes needed reversing. They were happy to go through quite complicated circumstances to properly work out estimated earnings for the year to get it right. I couldn't see any way of doing this in the online account - I think it would currently always guide you to speaking to them.

Log in

Paye

Review your tax details

select employment

Update estimated pay and any other necessary details

*This updates HMRC systems overnight and this then updates the tax code as required.

dori2o · 28 January 2018 at 2:54AM

dori2o wrote: »

Log in

Paye

Review your tax details

select employment

Update estimated pay and any other necessary details

*This updates HMRC systems overnight and this then updates the tax code as required.

For some reason I can't edit my post so I'll try again.

Sign into Personal Tax Account

Select PAYE (Pay As You Earn)

Select the link 'Check my income tax estimate'

From here you should be able to check each employer held on your record.

select the employer and update your salary and any other details applicable.

Do this for all employments.

Once you have made all necessary amendments log out of the tax account.

This will update your tax records overnight and a new tax code will be issued.

2-3 days later sign into your tax account and you should be able to see the tax code that has been issued by again going to the Check Your Income Tax Estimate.

gregc · 28 January 2018 at 12:10PM

Ah, I'm now wondering if I'd gone through with all of that for each employer, the system may have automatically swapped the tax code with personal allowance around to the most sensible employment. If that is the case, I underestimated it. I've just edited the estimated salary as you described, as I know more now.

2nd employment tax codes / wrong way round?

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