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Original poster

Tax on two jobs

20 replies

NGC2017 · 04/12/2018 21:34

Hi
Can anyone help me understand how it works?
I have always been led to believe that a second job is taxed more?
Basically my mom will be taking on 2 part time jobs. 20 hours a week combined, term time only. Her income wont be anywhere near her tax allowance annually so in my head she shouldn't pay tax. Is this correct? Or is if different when you have 2 jobs?
Also she hasn't worked for a number of years so doesn't have a p45 etc. Can she avoid paying tax on everything by filling any forms in?

Thank you

OP posts:

Talkinpeece · 04/12/2018 21:39

She can earn up to £11,850 per year before paying any tax at all.
So if she has two jobs each paying £5000 she will pay no tax on either.
If she has two jobs each paying £6000 she will pay tax on £150 of her earnings at one or the other.

If she had a primary job paying £10000 and a secondary earning £3000 she would pay no tax on the first and a little bit on the second.

National insurance is per job .... she will not pay NI on a job unless she earns £8000 from it
and she could have three £7900 jobs and still pay NI
but she would pay tax

Hope that makes sense

Original poster

NGC2017 · 04/12/2018 21:42

Yes it does. Thank you so much

OP posts:

Talkinpeece · 04/12/2018 21:44

PS, when she starts work, they will ask her to fill out a "P46" which will get her coding straight quite rapidly for each job

gamerchick · 04/12/2018 21:46

I had to ring up and get my tax code adjusted so I don't pay tax on my jobs. It didn't happen automatically.

Racecardriver · 04/12/2018 21:46

Your incomes fall into bands each having a different tax rate. The tax is calculated for however much you have in each hand then added together to get your total tax liability. It doesn’t matter how many jobs you work. It’s purely about how much you earn.

RockinRobinTweets · 04/12/2018 21:48

It’s my understanding that second jobs are often paid at basic rate/20% and then you’ll have an altered tax coding or a refund at the end of the tax year if you’ve overpaid

Ethel80 · 04/12/2018 21:54

She will have to work out her annual earnings on each job then once each payroll record is set up she can call HMRC and ask for her tax code to be split. It won't be done automatically.

Talkinpeece · 04/12/2018 21:57

ethel
It won't be done automatically.
Yes it will. That is the whole point of RTI
Rockinrobin
It’s my understanding that second jobs are often paid at basic rate/20% and then you’ll have an altered tax coding or a refund at the end of the tax year if you’ve overpaid
NO. That is NOT how PAYE works under RTI

I am a tax accountant who runs payrolls

cricketmum84 · 04/12/2018 21:59

Just repeating what @Ethel80 has said...

She will automacillay have a 1185L code with one job which is the 11850 per year allowance and a BR code on the second job which is all taxed at 20%

Best thing to do is work out what her annual earnings will be for each job and ask the HR/payroll dept for each job for their PAYE ref number. Then call HMRC, tell them both ref numbers and estimated earnings and ask them to split her tax code between the 2 jobs. They will then electronically send a new code to each job and tax should be correct.

Make sure she combines the earnings on both P60s when she gets them at the end of the tax year just in case she has gone under the tax allowance on either job as she may be due a little tax back!

If she needs any help at all feel free to PM me, I've worked in payroll for 14 years so quite experienced with this stuff!

cricketmum84 · 04/12/2018 22:00

@Talkinpeece yep that IS the whole point of RTI. Unfortunately it doesn't always work that way in real life (or with HMRC!) so it's helpful to move it along yourself sometimes...

Talkinpeece · 04/12/2018 22:01

cricketmum
Sorry but I get updates as the payroll agent for employees who have several jobs
RTI does the work automatically now

Original poster

NGC2017 · 04/12/2018 22:04

Thank you all so much.. She is so happy to be getting back into work but the nerves have started with regards to making sure everything is sorted and done correctly

OP posts:

cricketmum84 · 04/12/2018 22:05

@Talkinpeece ok I'm not going to get into a debate about how effective RTI is or isn't. Or react to your strike through crap about how much payroll you do. Obviously you are the payroll guru here and my experience of running payroll for 50000 employees counts for nothing.

cricketmum84 · 04/12/2018 22:07

@NGC2017 if she doesn't have a p45 she will be given a new starter checklist to fill in (what used to be a p46).

Sorry I hadn't read the last question!

Talkinpeece · 04/12/2018 22:09

cricket
It depends a lot on which software is used and how the HMRC system interacts with the updates.
HMRC are indeed a shambles on making RTI work
but the new P46 system does seem to be automating code splits a lot better than the old one.

I do very little payroll in number of employees, but they are an odd mix so I have the pleasure of interacting with HMRC almost weekly

anniehm · 04/12/2018 22:10

She has a tax free limit. The original job will use her tax code, the second job initially will be BR (20%) after at least one payroll Hmrc will write to both employers with new tax codes however it may take longer to fully work out due to term time only. If you overpay this year you will get it back through your tax code next year or as a refund. If she exceeds the tax free limit she will of course be taxed

Original poster

NGC2017 · 04/12/2018 22:12

@cricketmum84 thank you

I'm sorry i didn't mean to start a debate. I am grateful for all responses. Whether it's automatic or not I'm going to encourage her to call the hmrc with all the details to ensure they have then correct

OP posts:

Ethel80 · 04/12/2018 22:12

@Talkinpeece I've had to split my tax code recently and was told by payroll and HMRC that I do this by calling HMRC and requesting this. RTI will not split the tax code automatically.

Without outing myself too much, I have extensive training and experience with income tax and RTI and I'm fairly sure the system hasn't changed since I changed careers.

Original poster

NGC2017 · 05/12/2018 08:56

thanks @Ethel80 I will get her to do this as she will only stress if tax is being taken incorrectly. I think she is still in shock that her first two interviews since being out of work for many years have been successful. It's a confidence boost for her, but as she has been out of work for so long, I know she has to make sure things are set up correctly. Paying tax isn't a problem, but she will only be earning around half her tax allowance a year so I would rather her get it set up with the HMRC properly.

Thanks all once again for your replies

OP posts:

Original poster

NGC2017 · 05/12/2018 21:03

Hi All.
She discussed with both schools and they were more than happy for her to do this. They said its very common.
They told her when she gets her PAYE numbers to give Hmrc a call to split her tax code and explain her work as she wouldn't be paying tax on either her earnings, but would do if her code isn't set up correctly.
There was no mention of this automatically happening but I feel its always best practice to call them

OP posts:

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