Self Assessment calculation (surprised)

kessleryup

Hi all!

I'm currently filling in my Self Assessment tax return, and was surprised at the calculation at the end.

I'm a freelance writer and have made £1,960 in the 2012-2013 tax year.

I have total allowable expenses of £210, creating a net profit of £1,750.

At the end, the calculation has said that I owe approximately £350.

Is this about normal? Just surprised at the figure, as this is just a side gig away from my main job where I pay PAYE tax etc, and considering I have earned relatively little in the grand scheme, I was expecting the calculation to be a lot less.

tiger_eyes

Sounds about right to me? You used up all your personal tax allowance on your PAYE job, so your freelance earnings are taxed at 20%?

kessleryup

Thanks! Yeah guess it's normal, I didn't plan very well. £350 to pay by January 31st. :T

John_Pierpoint

I have a nasty feeling you might not have done this through self assessment before?

Anyone know if self assessment has a lower limit for demanding payments on account for the following year?
It is not too late to ask for collection via change to PAYE coding, which could be changed to put you on up to a 50% rate of tax until the outstanding liability has been satisfied.

http://www.hmrc.gov.uk/payinghmrc/taxcode.htm#1a

Davide123

Poa limit £1k

Not sure if they put you on 50% tax!! They just restrict your 2014/15 tax code, to collect the 350, say around 30 a month.

nomunnofun

John_Pierpoint wrote: »

I have a nasty feeling you might not have done this through self assessment before?

Anyone know if self assessment has a lower limit for demanding payments on account for the following year?
It is not too late to ask for collection via change to PAYE coding, which could be changed to put you on up to a 50% rate of tax until the outstanding liability has been satisfied.

http://www.hmrc.gov.uk/payinghmrc/taxcode.htm#1a

£1000 (unless more than 80% of liability already paid under deduction) - op should be OK.

You are spot on regarding the collection through PAYE code and 30th December is the deadline for that. On a more pedantic point, HMRC can collect more than 50% of one's income in tax - this limit, oddly, only applies when a 'K' code is in operation.

John_Pierpoint

The POA starting point has been £1k for many years I think? I do remember my old mum being in a similar situation to kessleryup and being delighted that her cash flow had been "given" a boost from the tax man.

Yes I think we can assume that kessleryup has "spare" PAYE income > £700.
I wonder if HMRC still makes such assumptions, or if joined up government means the system checks first before the "K" code is issued.