Dual Jobholding and Overtime: Taxation
The question
To ask the Chancellor of the Exchequer, what assessment she has made of the potential implications for her policies of reports of NHS staff being taxed as a second job for working overtime.
Answered by James Murray
All income earned through employment is taxable, including income from further employment, such as from overtime or through additional employment. Tax is paid on individual’s overall income, regardless of the source of that income. Not all individuals who receive an income are formally employed, as many earn through self-employment or receive other sources of income.
By paying tax on overall income, rather than solely through income from a single source of employment, the income tax system is highly progressive, with different rates of tax sitting above an internationally high Personal Allowance. When an individual moves from one tax band to another because of an increase in their income, they will only pay additional tax on the portion of their income that falls within the new tax band.
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