It is normal to be given a basic rate (BR) tax code if you have a second form of employment. The BR tax code means that you will pay 20% tax on all of your earnings from that particular form of employment (if the amount you earn from that is under £35,000 in the current tax year).
Everyone receives a personal allowance which is currently £8105 in the 2011/2012 tax year which means that you can earn up to £8105 tax free. The personal allowance should be used against your income from your highest paying form of employment.
The fact that you will earn over the tax free amount is assumed and therefore if you had the personal allowance used against both sources of income you would not pay enough tax.
Is it worth me working a second job when I get taxed so much?
It is a common misconception that the BR tax code used against a second form of employment means that you will pay more tax. This is not true if your main source of income has the correct tax free allowance applied to it.
The result is that you will pay the same amount of tax as long as the correct tax codes are used by all of your income sources and therefore working a second job which uses a BR tax code will not mean that you will pay more tax.
BR tax codes
If you don’t receive more than the tax free allowance from either source of income, it is possible to have your personal allowance split over both income sources. This will allow for some tax free income from both employers.
If you earn more at your second job then that job should have the personal allowance applied and not the BR code. If you earn more in your second job and have a BR code, then you will usually not pay enough tax.
