from self employed to employed and tax [Archive]

Xabien

15-08-2012, 09:22 AM

I am thinking about giving up CM to go back to being employed.

The job would start in October so 6 months into the tax year. How do I stop my personal tax allowance from being used in the employed job rather than as in my SE job as a CM?

Otherwise I will end up with a tax bill surely from the childminding ?

I hope that makes sense

MrAnchovy

15-08-2012, 11:39 AM

Whatever you do, you will have to fill in a tax return at the end of the year including all of your income which will result in some tax owing one way or the other (and possibly also Class 4 NI owing to HMRC), so it will all sort itself out in the end.

But if you are want to make sure that anything owed by you is as little as possible, tick Box C on the P46 your new employer should give you (because you won't have a P45) to say "I have another job or receive a state or occupational pension." and your personal allowance will not be taken into account in calculating PAYE.

Beware that this will continue into 2013/14 until you have submitted your tax return and HMRC get around to issuing a new tax code for you which could easily be a year from now or even later so you will continue to have 20% deducted from your whole pay through your payslip.

If you want to avoid this your best solution is probably to tick Box B on the P46 to say "This is now my only job, but since last 6 April I have had another job..." If you start in October with 6 months of the tax year remaining this will only take 6/12 of your personal allowance against your employed earnings. In April 2013 you will move to a normal tax code automatically.