Firm closing

[Gladys]

2 minutes ago, kevster said:

surely ITIP is the same  as PAYE - Pay As You Earn. So each weekly/monthly payment should add up to what you owe at the year end

That's the point, PAYE is a calculation of tax on each wage/salary payment.  I worked in the UK for 16 years and never submitted a tax return.  I didn't have to.  Any benefits in kind were given a value and my monthly gross was adjusted and taxed. If I had a second employment, I guess it was notified to HMRC straightaway and any unused tax allowance would be applied.  I don't know the ins and outs, there are differences which is why we have to submit an annual tax return for a tally up. 

[A fool and his money.....]

1 hour ago, Happier diner said:

If your second job is your biggest earning job you can switch it around and pay the 20% on the original job

Jesus - Its not rocket science!

Right so then your second job wouldn't be taxed at a higher rate - but your first job would be because you have the second job. 

It's very simple. It's misleading to say that a second job is not taxed at a higher rate because in very many cases it will be. Forget the creative accounting, in plain English, yes in very many cases a second job will be taxed at a higher rate. In fact, if your first job is full time your second job will always be taxed at a higher rate.

[A fool and his money.....]

1 hour ago, wrighty said:

Many docs starting out in private practice fall foul of that.  I know of one had to sell his car to pay the ‘on account’ payment for year 2. 
 

World’s smallest violin playing for him, I know 🙂

You can defer the payment on account until actual earning are known.

[offshoremanxman]

6 minutes ago, A fool and his money..... said:

It's very simple. It's misleading to say that a second job is not taxed at a higher rate because in very many cases it will be.

It can’t be as the highest rate of tax in the IOM is 20%. You don’t pay any more than 20% all that happens in some situation is that you may have to wait a bit longer to get your full allowances against your income. 

[A fool and his money.....]

Just now, offshoremanxman said:

It can’t be as the highest rate of tax in the IOM is 20%. You don’t pay any more than 20% all that happens in some situation is that you may have to wait a bit longer to get your full allowances against your income. 

Yes but your first job is taxed at less than 20% because of the personal allowance and the 10% band. Therefore the second job (taxed at 20%) is taxed at a higher rate than the first. It's very simple.

[offshoremanxman]

2 minutes ago, A fool and his money..... said:

Yes but your first job is taxed at less than 20% because of the personal allowance and the 10% band. Therefore the second job (taxed at 20%) is taxed at a higher rate than the first. It's very simple.

I know I’m taxed that way myself but at the end of the day it all eventually nets off. You aren’t paying tax at any higher rate than your would have been once it’s all netted back at the end of the tax year. 

[A fool and his money.....]

5 minutes ago, offshoremanxman said:

I know I’m taxed that way myself but at the end of the day it all eventually nets off. You aren’t paying tax at any higher rate than your would have been once it’s all netted back at the end of the tax year. 

Right, so what you're saying is that a second job is taxed exactly the same as your first. (Ps don't mention that if you look at it like this your first job will be taxed at a higher rate than it was if you didn't have the second job).

Very misleading, much easier to admit that a second job will almost always be taxed at a higher rate than the first - amounts to the same thing.

[doc.fixit]

49 minutes ago, kevster said:

surely ITIP is the same  as PAYE - Pay As You Earn. So each weekly/monthly payment should add up to what you owe at the year end

I thought it was PWYE...Pay What You Earn.😎

[offshoremanxman]

6 minutes ago, A fool and his money..... said:

Very misleading, much easier to admit that a second job will almost always be taxed at a higher rate than the first - amounts to the same thing.

I’m saying you have the exact same tax allowances and reliefs regardless of how many jobs you have so at the end of the tax year all your allowances and reliefs are tested against all of your income to arrive at your net tax bill - so you don’t pay anymore in tax whether you have one job or five over all. 

Edited February 13, 2023 by offshoremanxman

[TheTeapot]

Even though it all works out in the end, I still think that it remains a problem. You've got to think of who this affects. It doesn't really affect someone 26 comfortably in the 20% bracket on their main job, even though a 20% tax on 2nd is still the same wage as someone 18 in their first flat, on 18k office junior wages trying to make their rent, car insurance, bills, real life all add up for the first time. Who is most likely to be working that second job in hospitality for what turns out to be less than £9 an hour? And who does it hit the hardest? That 20% at source, even though it works out right eventually, remains a disincentive to fill those roles in exactly the group you would want to be filling those roles. It also negatively affects people who live more chaotic lives.

Like I said before, it feels punitive at the time.

Edited February 13, 2023 by TheTeapot

[Asthehills]

https://www.manxradio.com/news/isle-of-man-news/davisons-facing-soaring-costs-month-on-month/
 

What does he expect to happen exactly?

Most industries are in the same situation.  Adapt or die, government can’t cherry pick who they help and it’s not even an IOM specific issue anyway.

[A fool and his money.....]

1 minute ago, offshoremanxman said:

I’m saying you have the exact same tax allowances regardless of how many jobs you have so at the end of the tax year all your allowances are tested against all of your income - so you don’t pay anymore in tax whether you have one job or five.

That's all true but needlessly complex.

Far easier to say that yes your second job will be taxed at a higher rate in most cases.

[Happier diner]

1 hour ago, A fool and his money..... said:

Yes but your first job is taxed at less than 20% because of the personal allowance and the 10% band. Therefore the second job (taxed at 20%) is taxed at a higher rate than the first. It's very simple.

It's very simple. But seems to be beyond you.

[Happier diner]

39 minutes ago, TheTeapot said:

Even though it all works out in the end, I still think that it remains a problem. You've got to think of who this affects. It doesn't really affect someone 26 comfortably in the 20% bracket on their main job, even though a 20% tax on 2nd is still the same wage as someone 18 in their first flat, on 18k office junior wages trying to make their rent, car insurance, bills, real life all add up for the first time. Who is most likely to be working that second job in hospitality for what turns out to be less than £9 an hour? And who does it hit the hardest? That 20% at source, even though it works out right eventually, remains a disincentive to fill those roles in exactly the group you would want to be filling those roles. It also negatively affects people who live more chaotic lives.

Like I said before, it feels punitive at the time.

You keep saying this. But you have no alternative suggestion. It's the same the world over  

[wrighty]

1 hour ago, A fool and his money..... said:

You can defer the payment on account until actual earning are known.

The payment on account thing is not really in advance, it just feels like it if you’re not on the ball with your tax liabilities. 
 

Specifically, the tax bills/rebates we all had in January 2023 was for earnings April 2021 to April 2022. So any ‘payment on account’ due Jan 2023 (on 105% of previous year’s earnings) is for earnings April 2022 to 2023, so 75% of that money is already earned by the due date. 
 

I don’t do private practice anymore, and the double bill first time was a bit of a shock, but subsequently it was fine, and when I stopped I just told them and didn’t have to pay ‘in advance’.