To ask for tax related advice ! (Instead of ring the tax office again)

[ginorwine]

I have recently given up my career and now have two jobs .
I will over the 11 k tax threshold this year as my previous job was 15k pa .
I now have one main job 3 days a week and one day of work from a cleaning company .
I rang the tax office as I don't really understand tax related things and have not thought about before .
I don't understand but re my second job - which pays 8.07 per hour in taxes at 20!% so I only get six pounds and a few pence per hour.
I assumed that I wd get the difference refunded back to me in April but the tax office said I won't do insffect I'm working fir belllow minimum wage until April .
They said when it comes to April I can split my tax allowance - whatever that is - between the two jobs and I then won't pay tax .
Does all this sound correct ?i don't want to work for 6 quid per hour in the cleaning job really . Any advice sovappriciated !

[ginorwine]

I mean I thought that if you had a low ish rate of pay you wd keep it not get taxed ??

[britbat23]

You can claim back the overpaid tax at the end of the tax year.

[MyVisionsComeFromSoup]

because your main job is using up all your personal allowance, and other work you do is taxed at basic rate. If at the end of the tax year, you've paid too much tax, then you'll be refunded. Any other way, and you'd pay too little tax. Not sure what the reference from the tax office about earning below minimum wage is about, unless its tax credits related perhaps?

Next year you can split your personal allowance between two employments, so eg £4000 will be tax free with one, and £7000 with the other. As soon as you earn more than that, you'll start paying tax.

[crazywriter]

Your second job is likely on the BR tax code (basic rate) so you're getting taxed at 20%. This is normal to start with on 2 jobs. When I had 2 jobs I had this but when it came to April I had a tax rebate because I'd overpaid tax so you will get the money back. I think you can call the tax office and get them to sort your tax code out now--split it between your jobs so that you can earn a certain amount each month without being taxed but the tax office will want you to wait until April. The tax office will need to factor in that you had a job that was over your allowance and it can take longer to work out how much you've already paid and what you have left, which is why they may be encouraging you to wait until April next year.

If it makes you feel any better my husband left his 20k a year job so has quite a bit of tax due back but won't get it until next April because the tax office don't know if he'll get another job for the rest of this year. I also went from two jobs to one and am due some tax back and in the same position. It's better than owing them tax in April though.

[QforCucumber]

Per tax year you can earn 11k before paying tax. Anything over and above that is taxable at 20%. If you've already earned 11j from our previous job then yes you'll be taxed 20% on your additional earnings.
People on minimum wage pay tax too you know?

[ginorwine]

Thanks for replies . I'm trying to work out if I will have overpaid any tax or not . If I have I cd stay in the cleaning job and recoup the tax back but it seems to me that I have earned up to my threshold when I was in receipt of a decent wage but now I'm on a lower wage I still pay 20 % on my 8.o7 p an hour job which means I only get paid just over £6 an hour .
I would really like to kno if I will get any pay back as if not I don't think I will continue in the cleaning job
Tax office seemed to say I will get tax paid back re my new main job but not my cleaning job . I don't understand tax !

[ginorwine]

Yes I saw br tax code on my pay slip . I just need to kno wether I will have this job taxed at br then until spril ?
Yes I gave earned 10k plus in my former job so it looks like until April will be working for 6 pounds an hour . I thought if you had a minimum type wage you didn't get taxed but clearly I do due to previous earnings ? I'm just try get my wee brain around it 😜

[gatorgolf]

You need to think of tax on your total income rather than thinking about the actual tax being deducted from each job. Say for example you have one job of £11k and one job of £4k then the tax due on £15k is £800. This would usually be collected by applying your personal allowance to the main job and a BR code to the lower paid job so the full amount of tax would be collected through the lower paid job but it relates to the total income. The minimum wage is on your gross pay not net

[PositiveAttitude]

The tax office will look at the total of both jobs.

For example:

Job 1 you earn £10,000 per year, but paid not tax
Job 2 you earn £5000 per year but have paid £1000 tax

You will have earnt £15,000 and will need to have paid £800 tax. So you would then get a refund of £200.

HMRC do seem to be quite on the ball at the moment about changing tax codes. It used to take forever and often you would not get anything back until after April, but recently with RTI now working properly they seem to be able to change things within a month.

I would be happy to tell you what you can expect to have back if you PM me more details.

[topcat2014]

Are you paying any tax on your 'three day per week' job?

If so, then all your tax allowances are being used up each month.

If you are not currently paying tax on your three day job, it might be worth asking the tax office to split your code. That way you will earn some tax free pay from both of your current jobs.

Each month you can earn £916 before paying tax. So, if one job is paying say £800, and the cleaning job is taxed at 20% you are losing out a bit each month.

[QforCucumber]

A min wage job at 40 hours a week is approx 14k a year - income tax is payable.

Dp you have your p45 from your old job? It should state amount earned and tax paid. You'll pay 20% tax on any earnings over 11k - but your previous job may have already over taxed you. If you have the figures we should be able to tell you if you'd be due an amendment.

[DorothyHarris]

The best thing to do is to phone them with your p45 figures and your latest payslip from each new job.
You will have paid tax on your previous job as if you would be earning that all year so of your pay drops it's likely you will have overpaid.
When they know what your total income to date and tax paid to date is they should check if you have overpaid. If you have you should be able to ask them to alter your code now and send out with previous pay and tax to allow your employer to refund any overpaid through your pay. They will however only do this if your to date pay and tax show an overpayment.

[ginorwine]

Thanks positive
I will look at my p45 from my previous job for the accurate figure re what I earnt .

[ginorwine]

Top cat
I earn less than 900 pm but pay 20% tax on cleaning job and tax office said that is because all my allowance is used up until April next year I think .

[greenfolder]

Your tax free allowance is divided equally across the year. So each month you get £916 tax free and all your other income is taxable. Regardless of where it is from. It is easier for the government to take it from your primary source of income. Here they are saying" we will apply the £916 tax free to your job you do 3 days a week". That might result in you getting a refund if you earn less than £916 a month in that job.
For the time being they are taking a straight 20% from your second job. As long as you get a refund on your first job that is likely to be correct.
You can jack in the second Job but bear in mind that all you money above £916 per month will be taxed at the same rate, doesn't matter where you earn it.

[ginorwine]

Thanks green that makes sense to my confused grey matter !
I can do agency work which pays x3 the cleaning job which means although I will be taxed at 20 % the money I get will be higher than £6 per hour .
Is that correct ? !

[ginorwine]

The thing I've just realised tho is there is no way that I will earn £ 900 per month now even with the two jobs so what I don't understand is why they can't split the tax allowance across the two jobs now rather than in April ? ( just started to understand the tax split notion )

[Balletgirlmum]

Because employers now have to report all wages & tax deducted every payday under Real Time Information, the likelihood is that your tax code will automatically be adjusted ie split between your two employments after your next payday. If you are paid weekly it might take a few weeks for that to happen.

If not then it will be the end of the tax year (April) when you will be refunded any overpaid tax.

If however you have used up all your allowance on your first job then you would not be entitled to any refund.

Minimum wage is before tax, not what you take home.

[ClashCityRocker]

OP can you clarify if you're currently doing two jobs, or have left one and started another?

If you've left one and started another, you should still be on a 110l code as, say you left in September, the tax code will only have taken 5/12ths of your personal allowance.

If you've two jobs, br will be correct.

[ClashCityRocker]

Sorry, just re read the op, can see it's two jobs now!

[ginorwine]

What I don't understand and wd really like to understand is - if I earn below 900 pm in the two jobs and not going above my monthly allowance why am I paying 20 % tax for the second job ?
This is totally new to me .

[rainbowunicorn]

You need to stop thinking about it in terms of what you are earning per hour being less than minimum wage after tax. The minimum wage or living wage where appropriate is the before deductions figure.

[Balletgirlmum]

Because you are working for two unconnected employers at the moment your tax records are not connected.

Tax is cumulative so whatever you earnt then will be taken into account.

When you left there and started job number one you should have handed your new employer your P45 & they will have ticked the box saying that this is now your main job. The software will have automatically assigned you a standard tax code unless you have had any benefits in kind or have other tax related issues.

When you started job number 2 your employer would have had to tick the box saying this is your second job. They have no information as to your other earnings etc so the system will automatically assume that your tax free allowance is being used up on job number 1, hence the BR code with everything taxed at 20%

At some point when your employers report your pay under RTI, HMRC's system will Jon the dots & your code should be adjusted.

[Balletgirlmum]

And don't think if it as a monthly tax free allowance, think of it as a yearly one.

[Balletgirlmum]

Between 5th April 2016 & 5th November 2016 you will have been allowed to earn£6,416 before paying tax. That's from all your employment between those dates added together.
Anything over that amount you earnt you will pay 20% on.

How many pay days have you had so far from your two new jobs?