AIBU to think I might get heavily taxed?

[Ethicaldebacle]

Morning ladies!

Any accountants that can clarify this for me?

I was made redundant and they won't pay a lump sum, so I'll be part of their payroll through my notice (now gardening leave).

In case I get lucky and find a job soon, what would be the tax implications? They told me I'd have to tell the new HR team that my new role is my "primary job" but I'll effectively have two jobs, and I believe one is heavily taxed. So how would it actually work?

Thanks!

Why don’t you get everything from your first employer paid into your pension? Problem solved.

Can I? Do I tell my former HR team?

I think you can transfer it yourself and tell HMRC, with proof, that you've done it. You should then get the tax paid back.

HMRC will do it, though the payroll at your new job may do it first.

You will get a form called s P45 from your previous employer when they remove you from their active payroll. That will state how much you earned in that employment since April 2025 and how much tax they have deducted. You give a copy of this form to the payroll team at your new employers (make sure you keep a copy too). It may be that their software will be able to do the correction during the subsequent few months.

After the end of March 2026 you will get a form from your new employer called a P60 which will state how much they paid you and how much tax they have deducted.

If you don't want to do the maths yourself you can just plug the total earned and total deducted from those two forms into a self assessment form and if you paid too much you will be able to get a refund.

However, for the example I gave, the reason someone would be due a refund would be because the double-payment income would make a basic-rate taxpayer look incorrectly like a higher-rate taxpayer when they are not. If the actual numbers are double that then no such misidentification would happen. Both employers will correctly recognise you as a higher rate taxpayer and will correctly deduct the appropriate tax.

For rough numbers, if the two employments are both actually paid at around the £70,000 pa mark:
Your nornal monthly gross income is £5,833
Your normal deduction for income tax would be £1,286.
In the overlap month it will appear as if your gross income annual is £140,000, you will have an actual gross amount recieved of £11,666 and you will pay £3,619 of tax. This is correct. no adjustments necessary. You pay 40% of everything you earn over £50,270 in a year, no matter how many employers it comes from.

Thank you!

Last question, wouldn't I potentially end up paying t% extra tax and lose my personal.alloeance if it looks like my "new" salary is £140k?

Redundancy payments should be tax free

Worst case, if they did tax you on that basis for a few months, then wouldn’t you get a tax rebate after the end of the tax year when HMRC get your P60 with your actual income for the year and do whatever number crunching goes on at their end?

I would assume so... But that could take like up to 9 months after the fact.

Can you tell me what are these jobs where you earn £60-70K despite being unable to understand basic tax rules?

They obviously have nothing to do with tax!

Is like people making similar amounts of money and not understanding the Oxford comma ;)

Yes a tax rebate won’t be immediate.

But I’d have thought it unlikely that any extra tax from temporarily losing the tax free allowance would exceed the extra income from temporarily having two jobs at once?
Even if it takes your payroll a while to sort the tax codes out once the gardening leave is finished?

Yes, of course that's a given :)

I'll still better off. But I still wouldn't want to pay extra tax just because I got "lucky".

Last year something similar happened to me, and the HMRC kept changing my tax codes (I had 2 or 3 changes) one was because they thought I didn't pay enough, and then they changed it because apparently I had paid too much.

The key to getting it right is to ensure that your current employer issue your P45 at the end of employment so HMRC know that you are no longer there plus completing a new started checklist at the new job and ticking statement C.

Once you have your P45 call HMRC and explain and they will send through a new tax code to your new employer via RTI which will likely be the normal cumulative code but they’ll have updated your YTD figs.

Amazing, thank you that's super clear advice

You won't. Drs have 3 employers at least many times a year and they often overlap as we swap midway through the month. Just call them once the first job stops paying you, tell them your new estimated income and ask your tax code to be transferred. Often even up with a 1k over or underpayment every year...they'll either give it back to u or add it to your following year's deductions in may

That's standard. I've had a single job since Feb
.... am on my 8th tax code since April. No frigging clue what they're playing at but happens constantly I just file in a folder

When you start your new job, you can have a P46 and I have a zero hours job I do alongside full time work. I want my tax code on my main job.
make sure your employer don’t decide they no longer need to pay you PILON.

leave tax code on old job as it will automatically transfer over. Your deductions will be messed up for couple of months and then it will sort itself out.

This happened to me a few years ago and I got taxed wrongly and then at the end of the year had a tax bill to pay as both taxed me normally, and I went into higher rate tax. You could ask your former employer to salary sacrifice the whole lot (or good proportion of it) into your pension to avoid this. Or make a one off SIPP (personal pension) payment with the extra income to avoid the 40% tax. Could also affect your child benefit if applicable so using pension is a good option.

Have they told you that you’re allowed to work on your gardening leave ?

Yes, they've said it's fine.

There is a calculator online that I use - it's not perfect and isn't 100% accurate, but it's close and it will give you an idea of the tax implications. You will probably need to find out what your Tax code would be if it's not standard.

The Salary Calculator - Two Jobs Calculator

It will work out fine, but your best bet is to be proactive. It’s a similar scenario to if you get paid a big bonus one month in the year.

if you go onto the HMRC website you can tell them how much you’re expecting to earn over the year and that gets taken into account. Making sure your new employer has your tax forms asap is also key, and you can do a self-assessment tax return if you want (I’ve had cases where HMRC is on top of things and others where it’s taken a couple of years to rebalance). You should also do a form online (can’t remember where it is but it’s HMRC again) on national insurance as you may end up slightly overpaying on this.

(Also it’s garden leave, not gardening leave.)

Not according to HMRC.

How will they?