Asking for a mate, who drives trunks part time as a second job.
He recently was taxed 42% for work he had done for a company he had just started with
He was told this was because, as a secondary employment he could expect to earn upto £150,000 a year ( fat chance) & could claim back any over payment at end of tax year.
I’m not really up to speed with this subject at the moment but having done loads of secondary employment work in past the tax has been nowhere as near as this.
It’s not really the fact that he could earn up to £150,000, it’s because if your talking about it being in Scotland, it means you are taxed at 42% if you earn over £43,000, while if you live in England, you don’t pay 42% until you reach nearly £50,000, so if he’s on a good earner from his first job, it won’t be long until he comes into the higher rate, It happened to me, I was living down in Essex and working for my current company and earning over £40,000, but moved back to Scotland, still working for him and I ended up paying the higher rate, just because of the different tax rates, the only way I could get by it, was to get him to pay my bonus to my pension tax fre.
Sapper
Your friend needs to ring HMRC (assuming his total income from all sources is not over £150k). What has probably happened is that the wrong box has been ticked somewhere along the line which has led HMRC to think that his income is over £150k. This can also happen early on in the tax year if circumstances (e.g. a large bonus payment) make it look as if your income for the year will be much higher than it actually is. I had something similar when my employer changed and the day of the month on which I am paid also changed - it appeared from one month’s figures as if my income was significantly higher than it actually was, and HMRC bumped my tax code accordingly. A phone call soon sorted it out (but it would have resolved itself as the tax year progressed anyway).
sapper:
It’s not really the fact that he could earn up to £150,000, it’s because if your talking about it being in Scotland, it means you are taxed at 42% if you earn over £43,000, while if you live in England, you don’t pay 42% until you reach nearly £50,000, so if he’s on a good earner from his first job, it won’t be long until he comes into the higher rate, It happened to me, I was living down in Essex and working for my current company and earning over £40,000, but moved back to Scotland, still working for him and I ended up paying the higher rate, just because of the different tax rates, the only way I could get by it, was to get him to pay my bonus to my pension tax fre.
Sapper
The D1 tax code means that HMRC do indeed think his income from all sources is over £150k.
sapper:
It’s not really the fact that he could earn up to £150,000, it’s because if your talking about it being in Scotland, it means you are taxed at 42% if you earn over £43,000, while if you live in England, you don’t pay 42% until you reach nearly £50,000, so if he’s on a good earner from his first job, it won’t be long until he comes into the higher rate, It happened to me, I was living down in Essex and working for my current company and earning over £40,000, but moved back to Scotland, still working for him and I ended up paying the higher rate, just because of the different tax rates, the only way I could get by it, was to get him to pay my bonus to my pension tax fre.
Sapper
The D1 tax code means that HMRC do indeed think his income from all sources is over £150k.
That’s the thing if you added both salaries together & tripled them you’d be lucky to make £150,000
I’m taxed with my allowance at my main job and if I do anything outside this, it’s at Basic Rate. (BR). If you’re not going to hit the £50k threshold In England then tell them but be warned that if you go over they will tax you accordingly on your main income the following tax year to retrieve the underpayment.