Starting a new job, how does tax work?

[realp]

I'm about to start a new job. I haven't worked for a good few years.
How does tax work when I re-start? I am going to be a higher rate tax payer. But do I get to earn the full tax free amount before paying any tax?

No you don't.

If you google 'what will my take home pay be' there's calculators out there which will work it out for you. That's how I found out that my new job, although double my current salary, will actually only see the money hitting my bank account increase by about 50%

No the tax free amount is divided by 12 and you get a portion every month. In your first pay packet you will get maybe 5 x the tax free portion as you have that spare since April so probably wont pay much tax the first month.

When you start you should get asked to fill in a new starter form P46. On there you need to tick that this job will be your only or your main job.

If you don't get this form or if you don't have a P45 from another job then you might get allocated an emergency tax code until HMRC work out what tax code you should be on. If you get an emergency code then you might get more tax than you would expect. But it will correct itself once the correct code is applied.

If you don't already have a Government Gateway account - then you might want to set one up.

I’ve just started a new job having not worked for two years and I can confirm I haven’t been taxed yet as I haven’t reached the £12500 allowance. My tax code is correct (1257l) but I queried this as I thought I should have paid tax but was told it was correct. Enjoy it while it lasts!! 😀

As has already been stated, that is not how tax works. We do not all earn £12500 tax free and only then start paying tax, the allowance is equally divided over the year. However if somebody starts work for the first time mid year, then they will get a number of months worth of tax free allowance all at once in the first payroll.

So how come I have had two payslips but paid no tax?!

Are your earnings low enough that if you get the same each month between now and the end of the tax year you will not earn more than the allowance?

Have you had NI deducted?

Will depend on what your annual earnings are.

If this is your first earnings this year, you will get the personal allowances for the previous months. This is because your tax is calculated based on year to date figures (if not on a month 1 code) so if you haven't earned yet this year you will get the allowances from April to July.

Nope I’m part time but should only be three months pay until I reach the allowance.

Yep NI deducted.

I couldn't possibly tell you without knowing what you earn and when you have been paid.

What I can once again tell you is that people do not receive their pay untaxed until they have reached the tax allowance, it is shared out over the year.

Well the payroll team need to read up on it then as they clearly don’t know the rules either!

@Moirarosesgarden I would imagine the payroll team know your personal situation better than we do.

It's likely to be because you will have previous months allowance to use.