Tax question

I Was VB

I’m currently employed in the airline business and like most business now I’ve been asked to take holidays or unpaid leave for the foreseen future, however I got a telephone call from a recruiter asking me to do some work which I’m currently considering.

I’m currently taxed at the highest bracket and I assume the earnings from the new job would be taxed at the highest bracket too?

Given the situation am I better to use holidays and work for a new company or take unpaid leave and work for the new company from a tax perspective.

Cheers

Peregrinus

Taking unpaid leave, rather than paid leave, while you work for the other employer will mean that you pay less tax. But you will be paying less tax because you are earning less income.

Disentangle the two issues. Suppose you were not offered alternative employment, but simply had the choice of taking a paid or an unpaid layoff. If you take the unpaid layoff you pay less tax, because you have less income. Which would you choose to do?

Right, having made that choice, now suppose that you are offered alternative employment. If you take it, you will be taxed at your marginal rate on your earnings from that employment. It may or may not be worth your while to take in on those terms - it's up to you. You might feel that what would be left to you after paying tax is not that much and, actually, you'd rather spend your layoff catching up on all those gardening jobs that need doing.

But, either way, the fact that you now have an offer of alternative employment is no reason to revisit the decision you already made about whether to take paid or unpaid leave and reverse it.