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Financial Considerations When Stopping Work For A While
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Hi all,
I am stopping work at the end of this month to spend some time with my little girl before she starts school in September and because we are about to start some major building works on our house which I will help project manage.
I rang the tax office last week to discuss a tax rebate and they also dropped into conversation that if I am not working for a period of time, I can give my personal tax allowance, or part of it to my husband to reduce his amount of tax paid....
Made me wonder, are there any other things like this I should be aware of or doing to save money? Had I not rung to check about a refund I would never have known!
I am stopping work at the end of this month to spend some time with my little girl before she starts school in September and because we are about to start some major building works on our house which I will help project manage.
I rang the tax office last week to discuss a tax rebate and they also dropped into conversation that if I am not working for a period of time, I can give my personal tax allowance, or part of it to my husband to reduce his amount of tax paid....
Made me wonder, are there any other things like this I should be aware of or doing to save money? Had I not rung to check about a refund I would never have known!
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With the tax year running from April to April, your tax rebate based on not working for the last month of the year will be minimal. It is unlikely that you will receive this as a monetary refund, but rather as an amended tax-code for the following year to allow you to recoup the amount through lower tax due.
While it is true that you can transfer your unused tax allowance to your husband – I believe that your gain from doing this will only be of the order of £200 per year.
To my mind it should be worth at least £2,000 (and even more if he is a higher rate tax payer), based on him getting your circa £10k tax allowance, and not paying 20% tax on this amount.
If you are not planning to take the entire tax year as a working break, then you could end up loosing out by transferring your tax allowance. And even if you do take the whole year off, you could fall foul by receiving some other money that is taxable, wiping out any gain.
My advice is to claim Job Seekers Allowance (even though you have no intention of getting a job), providing you have been in work for more than 2 years you can claim this for 6 months before it becomes means tested. I did this for a couple of months around five years ago while between jobs. Currently JSA is £73.10 per week. Although people tell me that staff at the job centre now hassle you more than when I was claiming – I had to turn up to an interview every other week, conducted by persons without the ability to find a better job than working in the Job Centre.
While it is true that you can transfer your unused tax allowance to your husband – I believe that your gain from doing this will only be of the order of £200 per year.
To my mind it should be worth at least £2,000 (and even more if he is a higher rate tax payer), based on him getting your circa £10k tax allowance, and not paying 20% tax on this amount.
If you are not planning to take the entire tax year as a working break, then you could end up loosing out by transferring your tax allowance. And even if you do take the whole year off, you could fall foul by receiving some other money that is taxable, wiping out any gain.
My advice is to claim Job Seekers Allowance (even though you have no intention of getting a job), providing you have been in work for more than 2 years you can claim this for 6 months before it becomes means tested. I did this for a couple of months around five years ago while between jobs. Currently JSA is £73.10 per week. Although people tell me that staff at the job centre now hassle you more than when I was claiming – I had to turn up to an interview every other week, conducted by persons without the ability to find a better job than working in the Job Centre.
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