Owe Tax after return but PAYE??

coldstreamalways

I have filled in my first tax return (09/10) as I have a flat that I rent out. I have two jobs that I pay tax on through PAYE, one is D0 tax which I take to mean I pay 40% on everything I earn there. The other has tax code 800L.

I filled in my tax return (made a loss on the flat surprisingly!) and was shocked to see I owe £130.

Why is this? Is my tax code wrong? I assumed PAYE would be accurately collecting my taxes??

Gertie_Walker

Code 800L indicates to me that you have more than the basic personal alloawance due. Have you claimed for these additional alowances on your SA? Refer to your notice of coding. How is this code made up?

coldstreamalways

I have a few professional subscriptions that are tax deductable, I have included all of these (should they add up to 8000-6470?) and think they are accurate from looking at my bank statements.

Thanks!

Mikeyorks

Do you have a Student Loan you're repaying by any chance. As that can skew the result when you translate 2 x PAYE jobs onto SA?

coldstreamalways

Ooh, yes, good spot. I paid £5019 last year (due to be paid off in Feb thank goodness) is this something I should address or will it straighten itself out?

zzzLazyDaisy

I'm not sure what relevance the loss on the flat has to your PAYE deductions. Income from a rented property is classed as investment income and a loss on that investment cannot be set against income tax on earned income.

Apologies if I have misunderstood your question.

coldstreamalways

zzzLazyDaisy wrote: »

I'm not sure what relevance the loss on the flat has to your PAYE deductions. Income from a rented property is classed as investment income and a loss on that investment cannot be set against income tax on earned income.

Apologies if I have misunderstood your question.

It was an aside, hence the parenthesis. I was querying the fact that I owe tax despite paying via PAYE and ensuring HMRC are up to dat ewith my details.

Mikeyorks

coldstreamalways wrote: »

Ooh, yes, good spot. I paid £5019 last year (due to be paid off in Feb thank goodness) is this something I should address or will it straighten itself out?

I was going to add - 'but it normally creates an imbalance greater than £130' - but decided to leave that off.

If you check the P60s - aggregate the SLC - and compare that to the SLC on the SA Statement? That should tell you. The imbalance normally comes from the fact that each job will allow the threshold of £15k before charging 9%. But when you merge it all into SA - it will charge all earned income above £15k.


PS ........ for the £130 to be attributable to SLC - one job (£5019 SLC paid) would have to be very significant in salary terms but the other(s) aggregating to somewhere around £1400 / £1500 for the year in question? If that is the case - your earlier question - the £130 will be credited to SLC in due course. I think you can reclaim that .... but probably not worth the stress?)

coldstreamalways

Have you actually seen my tax return or are you just awesome at this?? You are spookily accurate!! Almost exactly on the nose, yes a healthy salary from main gob and just under £1600 for second job.

As it will (I think) come out at a rate of £10ish a month on PAYE it's possibly not worth the hassle but I may write a letter querying it if I get time.

I think it will be hard enough to get a stop put on my student loan payments in Feb as my account hasn't been updated this year and is still at last years amount.

CLAPTON

coldstreamalways wrote: »

Have you actually seen my tax return or are you just awesome at this?? You are spookily accurate!! Almost exactly on the nose, yes a healthy salary from main gob and just under £1600 for second job.

As it will (I think) come out at a rate of £10ish a month on PAYE it's possibly not worth the hassle but I may write a letter querying it if I get time.

I think it will be hard enough to get a stop put on my student loan payments in Feb as my account hasn't been updated this year and is still at last years amount.

contact the SLC; you may be able to stop the SLC payment at source and set up a DD instead.

Mikeyorks

coldstreamalways wrote: »

Have you actually seen my tax return or are you just awesome at this?? You are spookily accurate!!

I like the awesome bit .... can we stick with that?

The truth is I simply divided your £130 underpayment by '9' (the % you pay on SLC) ...... and came up with the £1400 / £1500. As the 2nd job was a little more than that .... then there's an offset somewhere in the SA calculation. Possibly a bit overpaid on the main job? So ......... neither spooky nor Harry Potter I'm afraid. And I did cheat. I wasn't convinced it was SLC as that usually gives a greater imbalance when accumulated into SA ... so I did look at a couple of your recent posts and identified the 'small part time job' - therefore added the PS.

Back to business! The £130 is really only reclaimable if it creates an overpayment. And it involves getting that agreement with SLC and HMRC putting a temporary suspend on your SA record (the SLC element) etc etc. SLC sending a cheque to HMRC. Quite unbelievable and about as 'joined up' as a jigsaw still in the box! I wouldn't go there?

Your SLC account should have been updated in time for the September statement you should now have? The problem is that at no time can anyone tell you precisely what you owe. As your employer SLC deductions are anonymously homogenised with PAYE when paid to HMRC. And then SLC are given a lump monthly sum by HMRC and based on an algorithm maintained via the Govt Actuary. It's only after April when your employer submits P14 details to HMRC that your individual SLC contribution is separated out and flagged to SLC. By then, of course, it's already at least several months out of date.

Net advice. As you're coming to the end of the repayment. Get the figure from SLC to Apr 10 .............. deduct the £130 from it and your payslip contributions from April onward. I would then suggest you contact SLC and see if you can move onto DD for the balance of the months remaining (HMRC should issue a STOP notice to your employer to cease deductions concurrent with that).

It's the only way you will bring the SLC contributions to a tidy end in Feb. I do have a suspicion that the 'concluding year DD facility' really needed to start in the April ..... but can't find out where I read that - so worth trying as both tidier and avoids potential overpayments after Feb?