Funny Tax Situation

In the long term, no. In the short term, probably. Your tax-free allowance of £4,899 is set against your current employment, so you'll be taxed at Basic Rate or Higher Rate in your second job. The NI upper earnings threshold (£630) might be reached by your combined wages without either employer noticing, so you may pay too much NI.

All that will be sorted out at the year end and you can look at your two P60's and your combined payslips and calculate the refund.

It used to be that you couldn't get a refund on overpaid NI contributions, only on overpaid income tax - has this changed?

Ly

NI refunds have been around for many years.

No, you should take home exactly the same from this as before.

Assuming you aren't earning more than £717 a week from both jobs put together (and also including other income such as bank interest), then your second job will be taxed at 23% right from the first pound.

You will pay less NI than you would if instead of having the two jobs you had one paying the same total. This is because the first £94 per week in *each* job will not be subject to NI. Your combined tax and NI bill from your second job will be 23% of the first £94 and 34% of the rest. If your combined earnings exceed £630 in any week, the excess is NI-able at only 1% instead of 11%, but 11% will still be deducted and you have to ask for the rest back at year end.

Have we gone backwards in time!??? Or are you forecasting what the next budget might bring?

DF

Just testing. I meant 22%. Blame my secretary.

So by your calculations, then if I did 10hrs p/w that 10p/h gross figure becomes 7.63 net p/h. Hmm. OK, thanks very much for the help.

Really? this is most helpful as I started a new job mid May, didn't get paid until end June and paid a few pounds NI owing to the salary owed from last week in May being added to June salary (only part time - don't earn enough to pay NI as a rule). Queried this with our HR/wages dept who told me that unlike income tax, which would automatically correct itself the following payday, NI wasn't refundable and I'd just have to stand the loss.....if this is not the case, and my employer will not help what do I do to get a refund of overpaid NI please?

Ly

Yep, except that the rates are in fact 22% and 33%, so it's actually £7.73. Averaging it is perhaps not the best strategy for deciding whether it's worth doing. The first 9 hours will pay you £7.80 each. The 11th and subsequent hours will pay only £6.70. The 10th hour straddles the £94 threshold, so pays at the higher rate for the first 24 minutes and at the lower rate for the other 36 minutes. If you want to optimise your net pay per hour, cap your work at 9.4 hours each week.

It will depend on your Employment Contract.

What does it state in respect of due date(s) for payment? I suspect that you may have missed the Payroll deadline for May, so it was more convenient for your employer to pay May's wages in June?

On the facts as you state them, you haven't overpaid NI.

Dont blame me for your mistakes!

Digressing slightly, is it possible to get hold of your NI contributions record, so you can see whether you have paid too much, or whether there are gaps when you've had time off? I suppose (correct me if I'm wrong) you need a full lifetime record of contributions to get the full state pension?

In message of Wed, 5 Oct 2005, writes

It is rare to have overpaid NI. The most common situations are when you are Self Employed and Employed and both are fairly highly paid/profitable. You can then end up paying too much in a combination of Class 1, Class 2 and Class 4 contributions. There is a fairly complicated method of calculating whether too much Class 4 has been paid in this situation, but I'm not going into that here.

Secondly you could pay too much Class 1 if you had 2 employments, one or both of which were highly paid and in total for the year you paid more than the maximum for Class 1.

No! You don't need a full lifetime record in order to get State Pension. At present a man (and a woman after 2020) will need 44 years of minimum contributions to gain a full pension.

You can get a forecast from the DWP (see:

DF

In message of Wed, 5 Oct 2005, David Floyd writes

I should said 'contributions or credits' above

"David Floyd" wrote

That *is* a full working lifetime for a graduate - age 21 to 65 is only 44 years!!

In message of Wed, 5 Oct 2005, Tim writes

Although in some circumstances credits are given in respect of full time education and approved training.

DF

But your contribution lifetime is from 16 to 65. You get credits while you are at school, but not at university.

"Terry Harper" wrote

My point is that doesn't hold for someone in full-time education until age

"Terry Harper" wrote

How do the Contributions Office know whether you were at school between 16 &

"Terry Harper" wrote

Exactly. So those years may be excluded from the "contribution lifetime" for a graduate, who would then need to ensure they have 44 years *outside* of their university years.