NT tax code - taken into account for PA?

Is income earned under NT taken into account for calculating your marginal rate on other income?

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Hi all,

You'll usually see me in the indirect tax threads, but after some thoughts/advice/answers on the above question - somebody earning a wage under an NT code (not due to their status as an individual but protections afforded to their employer by UK Gov) and wants to rent out a flat, c.15k per year. They'd be in additional rate if their day job was taken into account for calculating marginal rate to apply to the rent income, but they have no other sources of income other than that under the NT tax code.

Thanks in advance for your help!


Replies (3)

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By Tim Vane
27th Aug 2019 13:45

An NT code does not mean that their employment is not taxable, only that the employer is not collecting the tax via PAYE. If the duties are in the UK then I would expect that the full employment income is taxable and should appear on a UK tax return, but you will need to review the circumstances to determine what reliefs (if any) would then apply to the employment income.

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By RedFive
27th Aug 2019 14:35

I'm not sure that's strictly true Tim. I've got a client with an Army pension which is not subject to tax and paid using NT code.

He received the pension as a result of injuries gained, receiving a medal and tax free pension as a result.

His pension is not added to his other earnings and is not declared on his tax return. He therefore receives the normal allowances and thresholds on his other income.

On what basis does the OP's client receive the income tax free?

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By GoldLeader
27th Aug 2019 15:42

Thanks for the comments so far chaps;

Their employment is not taxable due to the international treaty which founded the supranational organisation they work at - stating that employees would not be subject to UK Income Tax/NI requirements.

However, they are a standard UK citizen, and as such would presumably have some form of liability on other earnings - the question is whether that would be at PA->BR or additional rate.

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