Second jobs

[Lloyd90]

Afternoon lads,

 

Wondering if anyone can advise me how having a second job works tax wise.

 

My first job is whilst a student I am the resident warden (Mostly just deliver the mail to the flats on campus). It pays around £570 a month and has suited me well as I can do my uni work whilst on shift. I don't make enough to pay any tax so it hasn't affected me thus far.

 

As I am coming to the end of my second year (All passed so far thank god) I am picking up work for the summer.

 

It is casual work for the council working in the residential homes I was on placement in. The contract is zero hours but apparently there is a fair bit of work around as between the 5 homes they often need cover and a third staff member. Also their is a shortage of men so that does help.

 

Now just wonder how does the tax work on having two jobs ? I'm under the impression one of them will need to be taxed at 20% and any over payment can be rebated next year ? If possible I would rather not overpay as any money saved this summer will be used for living costs and accommodation next year.

 

Appreciate any advice

[jonny thomas]

Payroll people will sort it unless you're contracting then it's all down to you

[davewh100]

hi had two jobs service engineer and doors security big mistake got hammered on tax I would seek some advice first

[AVB]

having two jobs shouldn't be any different than having one job paying twice as much. Don't see why you would be penalised regarding tax although it might take until you have submitted a tax return to get it right.

[Bobba]

Some time since I ran a small payroll.

There used to be an option by which you can agree with HMRC to divide your personal allowance between both employers but it can get messy when job switching.

For most folk, if you are doing both jobs concurrently then you treat one of them (say, your warden job) as your primary job and it is against these earnings against which your personal allowance is used. You inform your second employer of this and they tax your wages at Basic Rate ie you pay tax on those earnings at 20%. At the end of the tax year you complete your tax return where you list your combined gross income using the end year P60's provided by both employers and set your personal allowance against your total income. The net result is taxable income taxed at 20%. Against this you show from your P60's the total tax deducted by both employers. Any tax overpaid will be refunded by HMRC. Any underpayment you pay to HMRC.

If you are doing the jobs consecutively ie you move from warden to the council then when you finish the wardens job the employer will give you a P45. This shows your pay and tax for the financial year to date. The second employer keys these sums into their system and you move forward.

On PAYE, most employers are interfacing with HMRC monthly so HMRC will know why you're earning!!!

HTH

[grrclark]

So far as I understand it is as explained above if both jobs are going through payroll then the answer is that you are slightly disadvantaged in that both will deduct tax at source and you can only apply your personal allowance on any one payroll system (without much complication).

 

So ideally make sure the job that pays the highest most regularly is the one that has your tax free allowance on.

 

Of course this does mean that you will be over paying in tax initially, but you don't have to wait until the end of the tax year in order to get it back, you can claim for overpaid tax in the existing tax year. If the 2nd job is seasonal, i.e. only during non term time, then you can apply to HMRC to advise them of this and they will refund overpaid tax accordingly.

 

It has the potential to be a bit slow, but you can do quite a lot to speed it up significantly by giving them lots of information up front.

 

What you would supply is basically a list of your tax year to date earnings and a forecast of what you believe your future earnings for that tax year will be, i.e. job 1, along with a letter of explanation as to why you have an overpayment due to seasonal work in job 2. Both employers can also give you a statement of earnings to date and in the case of job 2 a letter stating that you were only there for a fixed period between dates x - y.

 

If you give them enough info you ought to get a refund back within 6-8 weeks, if you end up playing ping pong and going back and forth then expect that to multiply.

 

There may be an alternative solution, but I expect that given the short term nature of the 2nd job that it will be as equally burdensome to get that in place.

 

Give the PAYE helpline a call and explain what is happening and they will actually give you the best advice in what to do. You are certainly not the only student who will have two sources of income as you describe.

[JimLondon]

I'm on a fire service pension which takes up my tax allowance I'm also now working as a bus driver and have an emergency tax code as I can't have two tax codes the pension takes my tax allowance as its my for life income.

[Chris Bb]

Your accountant is your friend.

 

They (should) know all the rules and who to talk to plus will complete your year end tax return in a way to recover the maximum for you.

[norfolk dumpling]

Talk to HMRC - my wife has 2 p/t jobs and a small pension. They have split her tax allowance based on her estimate of earnings and she will then go on-line, next year, and fill in the exact figures and estimate the following earnings. Apparently next year when I get my state pension I go on-line and do likewise ie input my p/t earnings, my private pension and beaters wages and they will then adjust for the extra £6k pension I will get.

[Bry-M]

hi had two jobs service engineer and doors security big mistake got hammered on tax I would seek some advice first

as others have said, this wouldn't make any difference if you had two jobs, one paying 25k a year the other 10k, or one job that paid 35k. you'd pay the same amount of tax regardless.

 

There are a few scenarios where say the 2nd job just pushes you into the 40% tax bracket and if you had a company car you'd suddenly have to pay 40% on it instead of 20%, but for the most part it is straightforward.

Edited March 26, 2016 by Bry-M

[SNS]

hi had two jobs service engineer and doors security big mistake got hammered on tax I would seek some advice first

Well if you did pay more than you ought to have done and the overpayment was within the last 6 years then ask for it back.