Tax problems...I think!

[IHopeYouStepOnALegoPiece]

Ok ok, I KNOW I should have more of a clue about this but I don't...I'll work on it!!

Problem is

I work 20h pw for family A (been with them for 2y recently had hours cut if that changes anything)

I work 21h pw for family B (been there 5mnth)

Both £12ph gross

Problem is

Family A pay me almost £100pm net more (as instructed by payroll)

Surely it should be 50/50 with maybe £40 extra from family B as it's 21h?!

MBossA has contacted payroll who've said its correct money is paid seperatly from both families)

Another issue is I do ad hoc work for family C (still with me! ) and this month I've done 16h and not been charged tax/ni on it

To say me and all the bosses are confused is an understatement!

You need to look at the tax code on the pay slips. That determines how much income tax is deducted from each job.

HMRC will consider one job to be your main job and assign it your personal tax allowance, for 2016/17 this is 1100L. The other job is your second job and is assigned code BR, which means that no personal allowance is used.

As long as you have agreed both jobs as Gross salary, it will work out fine overall.

What tax code is on each payslip?

Does family C provide you with a payslip - what tax code is on that?

The total of all the tax codes must not exceed 1100 (which represents £11,000).

It doesn't matter if the net figure from one family is significantly more than the other so long as the amount actually leaving their bank accounts is right. It might just be that the PAYE income tax and NI is being deducted more from the amount paid by family B but that shouldn't matter. You aren't being paid less by family B you are just using that specific bit of income to pay your dues to the grateful government.

Family C issue more of a concern though.

FamilyC if paid at same rate

12 x 16 = £192 gross

On that amount there would be a small amount of NI £4.44 and at BR tax code income tax would be at 20%, so £38.40

As it is ad hoc work, are they assuming you are running your own business?

Ignore me, you said you did 16 hours in a month. So £192 in the month. On that there is no NI.

There is still income tax if BR tax code which is the code I would expect to be used for ad hoc work.

Have you spoken to HMRC? They don't bite! Give them a call and check how many employers they think you have. Go though how much you earn from each employment. FamilyC must not be using any of your personal tax allowance.
I would expect FamilyA to be using your personal allowance, so on code 1100L. Family B and C to be on BR.
Ask HMRC to confirm tax code for each family. If something is wrong they will issue new coding notices.

FamilyA, 20hpw x £12gph = £12,480 gpy. So fine for them to use £11,000 of personal allowance. Income tax would only be calculated on £1480 of income from that job, so £296 income tax deducted.

FamilyB, 21hpw x £12gph = £13,104gpy all taxed at 20% so income tax of £2620.80 deducted.

Can you see how the income tax is greatly different when one job uses personal tax allowance and the other does not.

Thanks so much nannynick-will have a proper read through later but that's really helpful! I bow to your knowledge!!

Should have said, Job C is £14 net per hour

Have just check my job C payslip (the only one I've currently got access to) and the Tax code is 205L

Poor job C. If you agreed £14nett they will be paying a huge amount of tax I top of that. Prob making more like £17 gross for them

Why agree nett in this job and gross in the other two?

Does family c know about a and b?

Fucks sake I'm an idiot...it's £14 gross

They all know about each other! (I was in job C for 6 years...they got me job A as they're family friends and now I just go back ad hoc)

My tax code for Family B is BR

Shame can't tag on here. Nick would manage to sort this

You need to look at the tax codes for all the jobs.

The BR tax code means that family A have most of your tax allowance, family C only have a 1/5 of it. You won't pay tax on your family C job until your reach over £2,000 of wages this financial year (so from April).

Only YOU can change this with HMRC if you want to. You just call them up and ask. I would suggest you split the tax code from job A and job B and then have job C as the BR code. But at the end of the day, as long as you earn at least the amount for your tax allowance it will even out between jobs.
Did that make sense?

Whether your tax code is split between job A + B or job B + C or job A + C, at the end of the day you will still bring home the same net income in total.

Is my thinking right???

OR, do you need to make sure any job that has all or part of your tax code you earn over the tax limit in that job? My head's spinning now

Tbh, Job C is SO ad hoc that I'm not worried at all (nor is my Boss C)

But I AM worried that I should be paying something and I'll get hit with a tax bill

So, jobs A & B ARE paying the same but because job A has my tax free allowance then they're paying less tax then job B?

So confused 😭

Yes - Ihope that's all right.
I really think you'd find it easier to work out if you did split the tax code between jobs A and B. It does sound as though everything is being done correctly so don't worry. When I was an employee years ago, I didn't even give a second thought to my tax coding!

So to recap:

Job C has 205L, so £2050 of personal allowance is allocated to that job.

Job B has BR code, so no personal allowance.

What is Job A's tax code?

Do you have the PAYE reference for each employer? This can be found on your P60 (which I suspect you got in May, from Job A and Job C). Job B though may have been too new, but you can ask them for the PAYE reference. It is typically something like 123/AB56789

Once you have all three PAYE references, then you can call HMRC and ask for your personal tax allowance to be moved. HMRC may refuse but they are usually willing to more your personal allowance if it makes things easier for them.

So as you earn over £11,000 in Job A, I would put all your personal allowance there.
Then Job B can be on BR, so no change there.
Job C can be on BR, so each month there will be income tax deducted at 20%

How much work for job C do you typically do in a month/3 months?

Blondes - I'm here... been around since just after 4am - I woke far too early!

So, jobs A & B ARE paying the same but because job A has my tax free allowance then they're paying less tax then job B?

Yes. Income tax is calculated on your total earnings across all jobs.

You are paid a Gross salary in each job, the employer pays Employers NI on top of that Gross salary. Income Tax and Employee National Insurance are deducted from the Gross, leaving your Net Pay, which you actually get in your bank account.

Would it help to give an example of what happens if you just had one job, paying £12 gross an hour, for 41 hours per week?

£12 x 41 = £492 (weekly gross salary)
£492 x 52 = £25,584 (annual gross salary)

Income Tax:
0-11,000 = 0%
11,001-25584 = 20%

If you earned 32,001 or above, then there would also be higher rate tax.

So first £11,000 = 0 Income Tax.
11001 to 25584 (so £14,584) at 20% income tax = £2916.80

With two jobs, one at 20hours and 1100L tax code and the other 21hours and BR tax code, both £12 gross per hour:

Job A:
20 x 12 = 240
240 x 52 = 12,480
Minus £11,000 personal tax allowance = £1480
20% tax on 1480 = £296

Job B:
21 x 12 = 252
252 x 52 = £13,104
No tax allowance, so all taxed at 20% = £2620.80

So income tax total: £296 + £2620.80 = £2916.80
Which is exactly the same as the earlier figure when having just one job.

Do you see how Income Tax is calculated?

Well done nick. Amazing as usual :)

So the same amount is leaving their bank accounts it is just that different proportions are going to HMRC. You need to move the £2,050 of your tax allowance that rests with family C ASAP and get that work onto tax code BR. As you only do ad-hoc work for them, presumably there are some months where you don't work for them at all and in those months you will be paying £34 more tax than you ought to because of not using that bit of your allowance!

Yep, I agree with that Cexuwaleozbu. No point having any tax allowance allocated to job C if the earnings there are variable, have it all with a permanent job.

You could try the new HMRC online service, I can see all my tax codes from my jobs on that. There is a link to request a change but I was not brave enough to try to do that, given I don't want to mess with my current tax code allocation.

www.gov.uk/check-income-tax-current-year

Jesus, Nick you're amazing! Thank you so so much!

Thank you to everyone!

My pleasure. Do you understand how Income Tax is calculated now and why each employer deducts a different amount of Income Tax from your pay? If so, then what helped the most... does the 2 jobs compared with 1 job example help?

Are you brave enough to give the HMRC online system a go? I would love to know what happens if you view your tax codes on there and then click the link on that page to inform them of a change... does it let you request tax is split between jobs differently? Calling HMRC can be a bit of a pain so it would be lovely if you can request that type of change online.

If you don't fancy trying the online route, then HMRC's phone number for Income Tax queries is 0300 200 3300
8am to 8pm, Monday to Friday, 8am to 4pm Saturday, Closed Sundays and Bank Holidays.
WARNING: You will get an automated system when calling... speak clearly and use very short phases... such as "Tax Code" rather than saying "check tax code".