I recently began a temp job and recieved a payslip with too much tax taken off. I was given the code BR which i understand is for those with a second job or a pension. This means i recieve absoluetly no allowance at all and all my income is charged at the basic rate.
This is where it gets complicated. When i registered I filled out a P46 and answered C to the question regarding employment status. This is because since March this year i have been working on Sundays at a bike shop. I get paid £50 for the day cash in hand from the till. Meanwhile since March to October this year i recieved Hosuing Benefit as I did not have enough income to support myself. Knwoing this wasn't right i dug out my old P45 and handed that in to the payroll at my workplace, this didn't help.
My problem now is that I recieve no tax allowance despite the fact that my other job pays only £50 and is thus way below the threshold and my new job is being taxed at 20% on all the earnings plus national insurance!
What can i do to make sure i recieve the allowance i am entitled to? There is no tax history on the cash in hand job BUT it was declared for my housing benefit and i'd rather not commit fraud with the HMRC. However i recieve no payslips for my PT job and would like to quit soon but cannot afford to if i am being taxed so much! What can i do to remedy this situation?
Thank you so much all i want to do is pay the right amount of tax and get the allowance i am entitled to!
Take comfort in that there is no great problem here. Your situation is quite common.
At the moment your first job is regarded as your main job. You filled in form P46 at second job correctly. What you need to do is get tax office to swop records around. You can only do this by contacting tax office. There are two alternatives then. You can either have all main personal tax-free allowance at current second job, or ask for second job to be "coded out". The latter would be my suggestion, because it would mean first employer could carry on not deducting tax, and there is less likelihood of underpayment/overpayment at end of tax year. When you swop allowances completely around, because tax office don't know employer' dates of payment or pay/tax position in-year, it is likely there will be a discrepancy at end of year.
I would suggest you ask for your allowance of £6475 to be split as £2600 (code 260T) at first job, and the balance of £3875 (code 387T) at second job. The first employer would not then budget uprate there, but second employer will, so you will continue to get your full allowance when there are any allowance changes. If you ever get a rise on £50 wage, you can always ask tax office to adjust. Second employer can then make any refund due to you with first wage after code number issue.
There is no fraud here, you are the one being taxed to excess. If you quit either job, or start another, keep tax office up to date, and staff will suggest any other code number amendments.
NB. To elaborate on other answers. If you signed form P46 at first job, that employer may not be acting illegally. He is not obliged to make any deductions from you on that level of income. You may need some documentary evidence of wages paid from him at end of year, either form P60 (although that may not be appropriate if you are not on form P35, but on form P38 instead on end of year return) or else a signed letter on headed paper giving wage details.
You will have to quit the bike shop if you don't want to commit fruad, as by not declaring it that is exacly what you are doing. You are entitled by law to a payslip.
You would need to speak to the tax office to get your tax code corrected - your temp agency will tell who the refernece and tel number for their particular office.
By ticking box C this has become a secondary income, you need to tell the tax office this is to be the primary.
Being paid cash in hand is illegal. Your (and that employer) need to sort things out by declaring this income to HMRC and paying proper tax etc. Because the first job is low paid you may end up paying too much tax overall. In which case you will be able to apply to get it back after next April. Alternatively, if it looks like the temp job will be paying you a lot more you could switch so that is your main job.
If you decide to keep the first job as cash in hand, you need to go back to the second employer and tell them that it is in fact your only job. You will eventually get put onto the proper tax code and will get your overpaid tax back. But beware, you will be in a lot of trouble if the tax man catches up with you.