Can anyone tell me whether there is any benefit to me splitting my tax code
between two jobs?
Currently I am a basic rate tax payer and my tax code is with employer A.
Last year I earned the most with this employer, but I am being taxed at BR
with employer B who this year it is likely I will earn the most with.
Does it matter whether or not I have one tax code or two because it will all
work out the same in the end (PAYE)?
I have been advised to contact the IR and request that my tax code be split
between both jobs.
As long as you earn at least 7000 in each job, and less than 37,000 in total,
it won't make any difference which job is your "main" job (ie the one with a
normal tax code).
If you earn less than 7000 in one of your jobs and more than 7000 in the
other, then you should register the higher paid job as your main job and have
the BR code for your lower paid job, otherwise you'll pay too much tax (although
you can of course claim a refund - but that's more form filling).
A normal tax code such as 489L does not just give you your allowances
.... it also gives you the benefit of the 10% tax band. Accordingly if
your current codes of say 489L and BR were adjusted to say 295L and 294L
you would get the benefit of the 10% tax band twice and thus end up
paying too little tax.
Accordingly I would not expect HMRC agreeing to a request from you
"splitting my tax code between two jobs?". Well certainly not without
counteracting the effect of that double use of the 10% band.
Quite. It's better to be paying a little too much tax during the year
and to get some back at the end, than paying too little and having to
pay more at the end of the year, and not having any left.
If the job which uses the 489L code pays at least £(4895+2090) then it
doesn't actually matter whether the BR code job pays more or less, the
amount of tax taken should be correct. Only if the 489L job pays less
than £6985 will the BR code cause too much tax to be deducted from pay,
but this will be corrected through the tax return.
Rather than splitting the code, it might be more appropriate to swap
them over with effect from next year, so that the "bigger" job uses the
proper code (503L?) and the "smaller" one uses the BR code.
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