Income tax on 2nd income?
Discussion
How does income tax work on a second income?
Say I reduced my hours in my full time job and my wage was dropped accordingly, if I took other part time work on my days off would I simply continue to pay basic rate tax on the second income (assuming my total earnings are less than the higher tax rate threshold)?
Say I reduced my hours in my full time job and my wage was dropped accordingly, if I took other part time work on my days off would I simply continue to pay basic rate tax on the second income (assuming my total earnings are less than the higher tax rate threshold)?
In theory yes, though most HR departments have felt obliged to charge emergency tax until they know what the actual figures should be was anecdotal understanding based on friends and family. Then claim back from HMRC or get auto-refund at end of the tax year. You could maybe ring HMRC and ask....
vindaloo79 said:
In theory yes, though most HR departments have felt obliged to charge emergency tax until they know what the actual figures should be was anecdotal understanding based on friends and family. Then claim back from HMRC or get auto-refund at end of the tax year. You could maybe ring HMRC and ask....
The emergency tax code was mentioned to me by someone today, and got me worried, but as long as any overpayments to the tax man are refunded then I can live with that.LeadFarmer said:
How does income tax work on a second income?
Say I reduced my hours in my full time job and my wage was dropped accordingly, if I took other part time work on my days off would I simply continue to pay basic rate tax on the second income (assuming my total earnings are less than the higher tax rate threshold)?
Yes. Say I reduced my hours in my full time job and my wage was dropped accordingly, if I took other part time work on my days off would I simply continue to pay basic rate tax on the second income (assuming my total earnings are less than the higher tax rate threshold)?
If at any point you moved into the 40% tax bracket then HMRC will adjust your personal allowance so you end up paying more tax on your first job to balance out the fact that you're paying only 20% on your second job. Hope that makes sense!
I was in this position when working in the bike trade after retirement.
Pension used my normal tax code and allowance, second job was taxed with a tax code IIRC of zero, in other words everything I earned was taxed PAYE, the two together kept me about £4K under the higher level tax rate so it was relatively easy. All done as PAYE, didn't need to do a tax return.
Pension used my normal tax code and allowance, second job was taxed with a tax code IIRC of zero, in other words everything I earned was taxed PAYE, the two together kept me about £4K under the higher level tax rate so it was relatively easy. All done as PAYE, didn't need to do a tax return.
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