Self assessment when employed

Make-it-3

Wonder if someone in the know could let me know the correct way to fill in the employment section in self assessment.

Situation is:

OH receives a personalised tax code each year to take account of benefits received and also high rate tax relief on his pension contributions.

Therefore as these are already "coded out" omitted them from his tax return.

HMRC look at his return, apply the standard personal allowance in their calculations and woo hoo he owes more tax because they haven't allowed for them.

But if he had included them they surely he could be seen as trying to have his cake and eat it - getting the relief through his tax code and then declaring them on self-assessment too.

So which is the right way to go?

CLAPTON

as far as the tax form is concerned his tax code is irrelevant

he must provide the basis information requested : HMRC will then calculate the tax due and deducts tax already paid (e.g via PAYE)

Make-it-3

I wonder why you have to fill in "gross" and "net" pay then if they are just going to ignore the "net" bit???

purdyoaten

Make-it-3 wrote: »

I wonder why you have to fill in "gross" and "net" pay then if they are just going to ignore the "net" bit???

It doesn't. It asks for Gross Pay and tax deducted.

The self-assessment will calculate the total tax due from all sources of income before deducting what has been paid from all sources. If it transpires that an amount remains due, this will be because the amount 'coded' has been insufficient, the reverse also being true.

zygurat789

PAYE is only a method of collecting tax "on account" it is very rarely 100% accurate because the tax code omits the units of the allowances and the tables allow for a higher digit than zero.
For most taxpayers marginally less tax is deducted than is actually due but for taxpayers who complete a tax return the tax liability is more correct, although it only deals in round pounds of income.
The tax return is a bare your sole to the taxman document which supercedes any tax code and should be regarded as the definitive document.