The joy of tax
Question
From September I will be a full-time Masters student, and will be taking two jobs to support myself, working 37 hours per week. Will I have to pay a higher tax rate on my second job?
Answer
The income tax you pay is determined by how much you earn, regardless of how many jobs you have. If tax is being deducted at source (i.e. from your monthly salary) then your tax-free allowance will be applied to one job.
Your tax free amount for the tax year 2008/09 will be £6,035. The rates of tax on income above that level will be:
£1 to £36,000: 20% (Basic rate)
£36,001 and above: 40% (Higher rate)
Higher rate: Higher rate: As you will be working for more than 30 hours per week you might be entitled to Working Tax Credit and, if you have any children, Child Tax Credit. If you want to consider an application you could telephone the Tax Credits helpline on 08453 003 900.
You may also want to consider using the Entitled To website to see if there are any other benefits that might be available.
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