Tax not being taken?

RVP991 · 18 March 2018 at 4:51PM

Hello,

I'm confused on how to end my self employment.
I completed the tax return for last year, I started employment in a full-time job in August of last year. I've kept my online business also since then but rarely made any sales. I'm now in a position where I am ending this.

I don't seem to have been taxed for working full-time since August (on my pay slip, the first month I worked I was taxed, this was then re-imbursed) I think this is because it's my first full-time job and I hadn't hit the threshold (Was it £10,000?)

My question is this:
- How do I ensure I am now taxed correctly in my job - I don't want to end up paying a lump sum and rather it came out of my payslip.. I've been paying a pension and NI everymonth but not tax.

- I've filled in the stop self employment on the HMRC website. Is there anything else I need to do right now? I know I need to fill in my final tax return, but I can't do this until after the 5th of April I believe?

Thankyou

Pennywise · 18 March 2018 at 5:14PM

RVP991 wrote: »

How do I ensure I am now taxed correctly in my job

If you phone and tell HMRC an accurate figure for your s/e profits for the current tax year, they'll be able to adjust your tax code so that you pay the "right" amount of tax. But be quick, it may take HMRC a while to adjust and there may not be enough time for your new employer to receive and apply any different tax code in time for the end of the current tax year.

RVP991 · 18 March 2018 at 6:18PM

Pennywise wrote: »

If you phone and tell HMRC an accurate figure for your s/e profits for the current tax year, they'll be able to adjust your tax code so that you pay the "right" amount of tax. But be quick, it may take HMRC a while to adjust and there may not be enough time for your new employer to receive and apply any different tax code in time for the end of the current tax year.

Thanks will have to do that tomorrow then.
Hopefully I can get it sorted quickly so the tax code applies and I don't end up paying like £1k tax or more back-dated.

Dazed_and_confused · 18 March 2018 at 9:38PM

Depending on your outlook there are advantages in not paying it all in one go through your March salary (which is what you seem to be trying to do?)

If that doesn't happen then whatever tax you owe for 2017:18 will be payable in full through your self assessment tax return. But if you get your return in to HMRC by 30 December 2018 you will have the option of the tax (if less than £3,000) being collected through your 2019:20 tax code. So spread over 12 months from 6 April 2019 to 5 April 2020. This is of course assuming you are still in employment then and earning enough to be paying tax.

If you are currently on tax code 1150L then you can expect normal tax deductions to start from April 2018. But you won't have the option of paying any extra tax through your 2018:19 tax code. It will be either all in one go in March wages (unlikely imho as it's so close to the end of the tax year), all in one go next January (paid direct to HMRC) or through your 2019:20 tax code as outlined above.

It may be slightly different if you are making payments on account on your self assessment account.

RVP991 · 18 March 2018 at 9:47PM

Dazed_and_confused wrote: »

Depending on your outlook there are advantages in not paying it all in one go through your March salary (which is what you seem to be trying to do?)

If that doesn't happen then whatever tax you owe for 2017:18 will be payable in full through your self assessment tax return. But if you get your return in to HMRC by 30 December 2018 you will have the option of the tax (if less than £3,000) being collected through your 2019:20 tax code. So spread over 12 months from 6 April 2019 to 5 April 2020. This is of course assuming you are still in employment then and earning enough to be paying tax.

If you are currently on tax code 1150L then you can expect normal tax deductions to start from April 2018. But you won't have the option of paying any extra tax through your 2018:19 tax code. It will be either all in one go in March wages (unlikely imho as it's so close to the end of the tax year), all in one go next January (paid direct to HMRC) or through your 2019:20 tax code as outlined above.

It may be slightly different if you are making payments on account on your self assessment account.

My tax code is 1150L yes, this is what it says on my pay slip.
It’s just bothering me I’m not getting taxed, i would rather the £100-150 comes out every month and I don’t have to pay a lump sum.
I’ve only paid Class 2 contributions so far being self employed and that was for the year just gone - no tax to pay so this is why I’m confused. I’ve met this ‘threshold now’ to pay tax I’m pretty sure.
In the 3 years I’ve been self employed now, my profits are just under £11,000
I started my job in August 2017 and it pays around £17k a year.
I’m just confused as of what to do and what I owe to date to be honest..
But thanks for the advice

Dazed_and_confused · 18 March 2018 at 11:30PM

The first question in your op have the impression you wanted to pay the tax due for this year all in one go asap.

My question is this:
- How do I ensure I am now taxed correctly in my job - I don't want to end up paying a lump sum and rather it came out of my payslip.. I've been paying a pension and NI everymonth but not tax.

To be honest rather than pay it all in one month now wouldn't it be easier to either pay it all as normal (for self assessment) in January 2019 - if you file your tax return in April/May then you will have 6 months or so to save up. Alternatively you can see if it can be collected through your 2019:20 tax code as outlined in my original post.

The reason you aren't paying tax now is almost certainly because your employment income in this tax year is less than £11,500 (to 5 April 2018). You will almost certainly start paying tax in your April wages. On a taxable salary of £17k and tax code 1185L (the standard one from April 2018) you will be paying about £86/month in tax.

Don't forget when you file your return you have to include all taxable income so both your self employment income and job need to be included.

dori2o · 21 March 2018 at 9:04AM

HMRC stopped issuing tax codes to employers for the 2017/2018 tax year on 13 March 2018, as they do every year.

This is because at this point HMRC cannot guarantee that employers will receive the codes in time for them to be operated before the last pay day of the year.

As has already been said, if OP completes their tax return as soon as possible on/after 6 April then they will be know what to pay and then have until 31/01/2019 to save and make payment.

Tax not being taken?

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