PAYE tax code when self-employed?

tyllwyd

I'm a freelance self-employed editor (and have been for the last 12 years) and pay tax through self-assessment.

In the last couple of years I've done some work for a publisher which is connected to a University, and their accounts are handled by the accounts department of the University. I sent in a document to prove I was registered for self-assessment and filled in the questionnaire they sent to confirm that I filled the criteria for being self-employed. They paid me gross, as I expected. They also sent me a P60 at the end of the 20011/12 tax year, which I thought was odd but I didn't worry about it.

But HMRC have just sent me a PAYE tax coding for 2013-14 which the University must have applied for. There is no way I will reach the Personal Allowance if you only take into account the jobs I do for the University, so I don't expect they will deduct any tax, but is it likely to cause any confusion at HMRC? Should I contact HMRC or the University about it?

Dazed_and_confused

Do you include the income connected to the university as part of the turnover on the self employed page of your tax return?

Is the code you've been sent NT, 944L or something else?

This might be worth a read/relevant to your situation (assuming the income is part of your self employment turnover)
http://www.hmrc.gov.uk/manuals/pommanual/PAYE11010.htm#IDAQY3EG

tyllwyd

The tax code is 944L. Yes, the fees that they pay me are invoiced by me and included in my self-employed turnover - there is no question of me being a casual employee of the University, I am definitely self-employed. I'm a freelance editor, so they send me a typescript, I work on it, and send it back with an invoice for the work I've done.

From the page you showed, do you think this might be what covers it "Where the earnings are paid in the course of a trade or profession and are self assessed as profits of the trade or profession." Does that mean it should be a 'NT' coding? I've never had a coding notice relating to any of the 20 or so other clients I've worked for since I've been self-employed.

Davide123

Call HMRC and ask them to change to NT, explain that it's included in your s/e

Dazed_and_confused

tyllwyd wrote: »

The tax code is 944L. Yes, the fees that they pay me are invoiced by me and included in my self-employed turnover - there is no question of me being a casual employee of the University, I am definitely self-employed. I'm a freelance editor, so they send me a typescript, I work on it, and send it back with an invoice for the work I've done.

From the page you showed, do you think this might be what covers it "Where the earnings are paid in the course of a trade or profession and are self assessed as profits of the trade or profession." Does that mean it should be a 'NT' coding? I've never had a coding notice relating to any of the 20 or so other clients I've worked for since I've been self-employed.

Yes, your other clients probably don't even consider this relevant if you are genuinely self employed in the work you do for them but maybe the University are more used to having "employees" so have included you on their payroll system.

Even if the change in code would have no material difference it might be worth sorting out sooner than later - if the university were to issue a P60 showing code 944L this implies you have employed with them when it doesn't really seem as though you have been with this organisation.

tyllwyd

I had a look at the P60 that the University issued last year and that says NT, so I have no idea why they decided to change it this year. I'll phone HMRC and try to sort it out. Thanks to all for your help!

agrinnall

I don't understand how or why the university has sent you a P60. Presumably you just invoiced them and they paid you, so you were never an employee and should never have been on their PAYE system. I would be contacting them to ensure they don't do the same thing for 2012/3.

tyllwyd

I'm even more confused now! I tried to speak to the university about it, but never managed to get hold of anyone.

They have sent me a P60 for the 2012/13 tax year, showing my final tax code as NT. The P60 doesn't make any sense, because I invoiced them for four jobs over that year, but they have only included one of those jobs in this P60.

Any advice what I should do now?

System

If the university have put you through their payroll and issued you with a P60 they will also have sent an end of year P14 to HMRC. That will show on your PAYE record with them.
That being the case HMRC will expect to see an employment page with your 12/13 tax return as well as your self-employment page. You obviously can't declare it twice otherwise you will end up with a bigger tax bill so if you are going to include that income on your self-employment page and leave out the employment page you will need to put a note on the return explaining what you have done.

tyllwyd

Thank you! Would it be easier for me to put it down as employment income, or would that just confuse things even more?

I can see now that I had the same issue last year without realising and just put everything down as self-employment income, but HMRC haven't queried that tax return so maybe they didn't notice.

Blackbeard_of_Perranporth

Do you invoice the company for the work you do, or do you take an income.

I provide services to a college, and invoice them for the work done, monthly. This then goes to my company, registered.

To me, the college are correct in treating you as an employee.