2nd job in a tax year Emergency tax?
money127 · 04/10/2018 23:13
Hi I got a question regarding the tax free allowance for 2018/19 (£11859 according to Listentotaxman.com)
Is this the amount you can earn without any tax being added
I started a job before part time paid no tax and from April 2018 to end of September I earned £4000 from there. Which means I still have just under £8k tax free allowance?
In my new job, I am earning around £400 before tax and it is a temp job not full time but I am expected to stay hill until May at least.
So say £400 a week after tax is around £337 there is about 7 months say 28 weeks left till next tax year in April
So £337 after tax * 28 weeks - £9436 which means I might have to be emergency taxed for some weeks to reach the 11859 quota?
Or will they found £400 before tax * 28 weeks and take more emergency tax
Is it before tax or after tax the £11859 tax allowance?
And if they take extra tax is it paid back to you automatically after April?
StatisticallyChallenged · 04/10/2018 23:18
The tax allowance is the pre tax income you can earn before tax starts being deducted.
However when you change jobs you can still end up paying so called emergency tax - which means you effectively don't have an allowance - if your employer hasn't received your tax code from hmrc by the time they run payroll.
Emergency tax rebates sometimes happen during the year but most often I've got tax overpayments refunded after April, nornally months later
Yambabe · 04/10/2018 23:23
It doesn't work like that at all.
The allowance is before tax.
When you start a job your employer is given a code to use to calculate your tax. When you leave a job your employer gives you a P45 and also sends that info to the tax office. So if you have 2 jobs in the same year you give your P45 to your new employer and he uses the code on it to tax you correctly.
Most people don't pay too much tax because the code sorts it out during the year and anything overpaid you get back in your wages.
If you go past the end of the tax year (5th April) and have still overpaid tax it should get picked up on by them eventually and they will pay it back to you by bank transfer or cheque.
Yambabe · 04/10/2018 23:27
"Emengency Tax" isn't when you have no allowance at all.
It's when you tax is calculated based on 1/12 (monthly) or 1/52 (weekly pay) of the annual allowance without taking previous pay and tax into consideration.
No allowance is Basic Rate and would only normally be used if your employer thinks you have more than one job at the same time and your allowance is getting used in your other job.
slashlover · 04/10/2018 23:31
£400 per week for 28 weeks is £11200 add the £4000 gives approx £15200 tax free in the year. If your allowance is £11859 then you will pay tax on approx £3341 of your earnings.
Emergency tax is if you have not given your new job your P45 or filled in a P46 and they give you a temporary tax code until the correct one can be applied.
slashlover · 04/10/2018 23:38
Checking further, the tax on the £3341 is at 20% which means you will pay approx £668 tax in the year, if this is spread over 28 weeks then it will be £24 each pay.
Disclaimer - these are rough numbers and I cannot be held responsible for inaccuracies.
LauderSyme · 04/10/2018 23:50
The basic income tax earnings threshold is £11850 per year. So you can take home £11850 per year, which equals £988 per month or £228 per week, without having to pay income tax on it.
If you earn more than £11850 per year, you pay the basic rate of 20% on every pound above that threshold. So if you earned £11849 in a year, you would pay no income tax at all. If you earned £15000 in a year, that's £3150 more than the threshold. So your income tax bill for that year would be 20% of £3150, ie. £630.
But you wouldn't expect to pay that £630 all at once (unless you are self employed and have to complete a tax return every January). Usually your employer will work out whether your annual salary is likely to be more than the threshold and if it is, they will deduct the proportionate amount from your regular wages.
Emergency tax is usually paid when your employer does not have enough information to know how much you will earn in total that year, so can't work out whether you will go over the threshold and by how much. This usually happens when you do not provide the employer with a P45 or when you are working more than one job at the same time.
LauderSyme · 04/10/2018 23:56
If you pay too much tax in one year, it may be automatically refunded to you via your pay packet. Or you may have to tell the tax office why you think you paid too much and claim it back. I have had refunds both ways in the past.
bellabasset · 05/10/2018 20:01
Single person tax code is 1185L. An X indicates that the personal allowances will not be cumulative. L indicates the NIC rate.
Your earnings from Apr to Sept fall halfway during the tax year so:
Gross Pay £4000
Personal Allowance Mnth 6 £5,925
No tax paid and no NIC due, and the unused allowances £1,925 to carry forward against your 2nd employment.
Your earnings from October are £400 per week = £1,733 per calendar month
Personal Allowance £987
Taxable pay £746 = £149.20
NIC free £702
NIC due on £1,031 = £123:72
If you had a P45 from yiur first job which shows your earnings and tax then the £1,925 unused allowances will automatically be offset against your gross income and it's worth £385 if it's paid after the tax year.
I have used a calculator and smart phone so don't 100% guarantee my calculations. The smart phone doesn't allow me to set the calculations in line.
PattiStanger · 05/10/2018 20:07
This isn't something you need to worry about, give your P45 to your new employer and it will be sorted out automatically. Emergency tax codes shouldn't come into it
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