I've recently been given the opportunity to do occasional freelance work for a large well known company. The work fits in well with my other job which is part time. However, HMRC have just informed me that my freelance earnings will be taxed at 40%. As my overall income will still be comfortably below the 40% threshold, can I request a new code or do I have to claim it back at the end of the year? TIA
Why on earth would HMRC say that? They are talking piffle. If you are on BR tax code, that is 20% not 40% but if you are on the payroll, the RTI system should be able to work it out - that is the point of the darned thing.
On the HMRC website it says that D0 (the code I've been given) is commonly given to people with more than one job and is taxed at 4o%. Not sure why they automatically presume that having a second income would take me into the higher tax bracket, it certainly doesn't in my case!
Are you sure it's not 20%? May be worthwhile calling and double checking. I'm self employed and PAYE (2 jobs). The freelance job is taxed at 20%, the other is the basic rate. I think they have made an error telling you that it's 40%.