question about my tax

daxu

Hello,

Not sure if I can explain this clearly.
I am employed by some company.
Last tax year, I did some work for a friend and got like 2000-3000£. So I filled my tax return, later received a letter from Inland revene saying that I don't need to pay any tax. Around 2-3 months later, I received another letter saying that they did a mistake and I should pay around 250£ tax. To do that, they changed my tax code.

So I told my employer my new tax code and they changed it. However, from my payslip, I feel like that I am paying an extra 50£ a month instead of 20£ a month. But my company's HR believes it is the right extra amount. But I still don't understand that, can someone help me?
Aother thing is that for this year, I received mails from inland revenue about filling tax returns. However, I didn't do anything as self employed this year. Is there any way that I can suspend my self employed status or something? The thing is that my friend always say that he is planning something for me next year. So I don't really want to tell Inland Revenue that I am not self employed anymore yet.

Many Thanks

CLAPTON

Assuming last year you have a fulltime job and earned more than 5435 during the tax year april 2007 to 2008 then..

you should have paid 22% on the extra earning in tax plus some NI

how much did you actually earn in that period?

what was you tax code and what is it now?

Your HR department must change your tax code as directed by the HMRC and not by direction from you... if your tax code is incorrect then you need to contact the HMRC.

tyllwyd

What time period are you paying the money back over - if you expected to pay it back over 12 months, and in fact you are paying it back over six months that might make a difference?

I'm not sure whether this is OK, but if you didn't earn any money self employed this year, could you fill in your self-assessment tax return showing the money you earned in your PAYE and that you earned nothing from self-employment. It shouldn't be too complicated to find the figures. Then the following year you'd still be self-employed and you could do the work as planned.

System

Once HMRC issue a tax return it has to be completed otherwise you incur penalty charges.

When you completed your last tax return there was the facility for you to declare the date your self-employment ceased. If you didn't do that then there is no other way for them to know you were no longer self-employed. Lots of people work as employees under PAYE and have a bit of self-employment on the side. HMRC won't know that SE has ceased unless you tell them and you need to tell them in good time so that they can stop the issue of tax returns for the following year.

If you only had PAYE income in 07/08 them you need to complete employment pages and indicate on any self-employment page the date your SE ceased. That way HMRC can put an end date against your SE source.

If you don't want to cease your SE source then you will continue to receive returns but declare Zero income for SE in those years you don't get any work.