A question about : Adjustment to tax rate band
Hi, I've today been sent notice of my tax code for next year, and there is a new line on there that says adjustment to tax rate band with a figure of roughly Ј2,000 on - my tax free allowance has been reduced by this amount. The note alongside this says :
Quote:
| We will check if there is anything that would reduce your tax-free amount. Sometimes when you have more than one job or pension you end up paying too little tax if some of your income becomes taxable at higher tax rates. We have included this adjustment so you pay the right amount of tax. |
Now, this rings a bell as I am a teacher and I have a second job as a reasonably senior exam marker for an exam board - I mark papers in the summer, I write a few things for them, etc. However, I certainly haven't gone over the 40% threshold so this doesn't make sense.
The tax on my marking work is always just a flat 20% (with tax code BR) and is taken via PAYE, which is easy as I sometimes go months without earning any and then do a glut over a month.
To perhaps complicate it slightly, I do pay into my workplace pension AND have childcare vouchers, both of which come out before tax and so are not included in my taxable income
The figures for this year will be (from my payslips, assuming the next few months are the same as always):
Annual taxable income from main job : Ј37,599
Annual income from marking job : Ј2,756 (for this year, changes each year depending what I do for them but this is the highest it's ever been)
Total annual income : Ј40,355
Current tax code : 1013L (so Ј10,130 tax free?)
Current rate that 40% kicks in : Ј31,865
Amount I can earn before paying 40% tax : Ј41,995
Amount that my new tax code has been reduced by : Ј2,047
New tax code for 2015/16 : 868L
So...any idea why they've made this adjustment? I don't have any other incomes. I do pay a tiny second pension of Ј50 a month, but the tax relief from this goes into the pension pot.
I'd appreciate any guidance before I ring them and make a fool of myself! Thanks 
Best answers:
- Which job is that tax code applied to?
I received three tax coding notices today, in separate envelopes, one for a pension the other two for paye employments.
My full tax code is split among the three.
You probably have another coding notice to come for the marking job which won't be BR.
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