One Off Taxable paymant and PAYE

Doonhamer

I received a one off income taxable payment because a sharesave scheme ended prematurely (less than 3 years).

I've never had to do a tax return because I'm an employee and my tax affairs are straight forward.

Will I have to complete a full tax return next year because of this payment, or can I somehow just pay the additional tax by cheque?

chrismac1

Firstly, there are various different types of "share schemes" with various different rules. So this could have been a Company Share Option plan, Save as You earn shares, or a Share Incentive Plan. under all of these, with HMRC approval, it is possible (but not always the case) that these shares are tax-free. It would appear your employer believes this to be the case or they would have applied PAYE and NI before making the payment to you.

For clearer guidance, please supply the value of the payment you received, the cost of the shares (if any) and the type of "share scheme".

Doonhamer

Thanks but I know for certain I have to pay tax on the profit made on the options as the company was taken over and the money saved to date in the scheme was used to buy at the option price but sold at the takeover price. I made a profit under £5k after deducting what I had paid. I am liable for income tax on this profit since the scheme did not run for 3 years.

BoGoF

Yes, you will need to complete a Self Assessment Tax Return to declare this - in the additional income supplementary pages.

Doonhamer

BoGoF wrote: »

Yes, you will need to complete a Self Assessment Tax Return to declare this - in the additional income supplementary pages.

Thanks, will I only have to do this for one year then revert back to PAYE?