Self Assessment - Tax Owing

xylophone

You don't find it a matter of concern that despite earning around five times the average you cannot meet an unexpected bill?

Is it time that you aimed at building up an emergency fund of six months' salary?

zygurat789

village_life wrote: »

My current tax code on the P60 was 1033. This "rule" about >£100k earnings isnt really common knowledge IMHO, so I expected PAYE would cater for all payments having increased my income....

What isn't common knowledge is that the PAYE system was developed by the government to speed up the receipt of tax, not to benefit the taxpayer.
Think about it, you do your tax return for 2014/15 and find you have to pay an additional amount by January 2016, pre PAYE this would have been much larger. Whereas under PAYE, by the end of the tax year, 5 April 2015, the bulk of your tax bill has already been received by the government and next year your code number will be adjusted so that they receive all of it through PAYE. If you are completing a tax return you should regard tax paid via PAYE as "on account" with the final calculation being done through the tax return.
Despite your misunderstandings of our tax system you have completed a very definitive document and come up with an additional amount of tax due, from your posts on here it would appear that there is a good chance that the tax return has been incorrectly completed and that the additional amount is overstated.
It has been said above that the "normal" liability would be £47,227, you have had £43,300 deducted via PAYE and your tax return calculation shows an additional amount of £4,135 making a total of £47,435, in excess of the "normal" amount. Do you have any benefits in kind, do you receive a P11D, have you entered these onto your tax return, what are they?
You are also paying into a pension which may reduce your tax liability, how is your contribution to this pension paid, salary sacrifice, before tax or after tax?

jem16

zygurat789 wrote: »

from your posts on here it would appear that there is a good chance that the tax return has been incorrectly completed and that the additional amount is overstated.

It's possible but I suspect it's just down to the OP not giving us precise figures. The OP's tax code is 1033L so a tax free allowance of £10,330 as opposed to £10,000. 40% of that is £4132 which is more or less the amount of the underpayment.

If the £134k is a rounded figure rather than an exact figure it could account for the difference.

Really need the exact P60 figures as asked for earlier to be sure.

Do you have any benefits in kind, do you receive a P11D, have you entered these onto your tax return, what are they?

The OP has a £330 extra allowance on his tax code so possibly unlikely that he has any benefits in kind but again this was asked for and so far goes unanswered.

You are also paying into a pension which may reduce your tax liability, how is your contribution to this pension paid, salary sacrifice, before tax or after tax?

If salary sacrifice or paid from gross salary before tax then it's already taken care of by using the P60 figures. If from net pay - although not so likely for an employer's scheme - then more tax relief may be due.

zygurat789

jem16 wrote: »

It's possible but I suspect it's just down to the OP not giving us precise figures. The OP's tax code is 1033L so a tax free allowance of £10,330 as opposed to £10,000. 40% of that is £4132 which is more or less the amount of the underpayment.

If the £134k is a rounded figure rather than an exact figure it could account for the difference.

Really need the exact P60 figures as asked for earlier to be sure.



The OP has a £330 extra allowance on his tax code so possibly unlikely that he has any benefits in kind but again this was asked for and so far goes unanswered.



If salary sacrifice or paid from gross salary before tax then it's already taken care of by using the P60 figures. If from net pay - although not so likely for an employer's scheme - then more tax relief may be due.
My point entirely

The OP has stated that he has no idea what the £330 allowance is for, consequently, I conclude that he has not entered it onto his tax return which is therefore showing a liability in excess of what it should be.
When completing a tax return for someone else it pays to ask every question which may in some way be relevant.

jem16

zygurat789 wrote: »

The OP has stated that he has no idea what the £330 allowance is for, consequently, I conclude that he has not entered it onto his tax return which is therefore showing a liability in excess of what it should be.

Totally agree although it's not a benefit in kind which would reduce, rather than increase, his tax code.

It could be work related expenses though.

When completing a tax return for someone else it pays to ask every question which may in some way be relevant.

Most of which I asked in Post 2 but have gone unanswered so far.

zygurat789

jem16 wrote: »

Totally agree although it's not a benefit in kind which would reduce, rather than increase, his tax code.

It could be work related expenses though.



Most of which I asked in Post 2 but have gone unanswered so far.
But only in a cursory way

I never said or even suggested that it was a benefit in kind, in fact the opposite, an allowance which has been omitted and which thus would give rise to a reduction in the tax calculated, something you entirely omitted to mention. Work related expenses are still an allowance and are treated in the same way and have exactly the same result

jem16

zygurat789 wrote: »

I never said or even suggested that it was a benefit in kind,

This read to me that you did.

zygurat789 wrote: »

It has been said above that the "normal" liability would be £47,227, you have had £43,300 deducted via PAYE and your tax return calculation shows an additional amount of £4,135 making a total of £47,435, in excess of the "normal" amount. Do you have any benefits in kind, do you receive a P11D, have you entered these onto your tax return, what are they?

Perhaps you didn't meant to put it in the same paragraph.

zygurat789 wrote: »

Work related expenses are still an allowance and are treated in the same way and have exactly the same result

Yes I know and why I suggested work related expenses as opposed to benefits in kind.

The whole point here though is that unless the OP chooses to answer the questions asked, we are all guessing as to exact amounts of the underpayment. The underpayment itself is not in doubt though.

village_life

Hello

I am back now. Thank you for the comments (most of you) there is the usual mix of helpfulness vs stuff to be ignored

So I have provided all the pertinent details, short of producing a photo of my p60 I am not sure what else there is to say. As per comments in the thread given my tax code and the amount of tax paid vs due it does confirm the additional liability which I was unsure of (hence the question).

I still take objection to the fact this situation has been inflicted on me now having received no information from anyone.... And while it's easy to say it is my responsibility to know my tax situation that becomes a pointless debate

That said now from some of the help here (thank you Expecially jem16) the action is clear that I need to ring HMRC and discuss this years liability, should this tax year onwards see me earn my bonus and as such pass the )100k threshold I know now that unfortunately once received (after tax) the money is still not mine and I have to hold back some further tax to be paid..... Great feeling taking nothing from the system and paying for the mess of society, but hey ho!

jem16

village_life wrote: »

So I have provided all the pertinent details, short of producing a photo of my p60 I am not sure what else there is to say. As per comments in the thread given my tax code and the amount of tax paid vs due it does confirm the additional liability which I was unsure of (hence the question).

The main point that is being brought up is that your liability might not be as much as you have initially told us if you have not completed your tax return correctly, although it won't be far out.

There is a difference of around £200. This may be down to you omitting to add something to your tax return which accounts for that extra £330 allowance. It may also be down to not quite exact figures when you told us what was on the P60.

It's up to you if you want to find out if you could pay around £200 less or not but glad to have been of help otherwise.

zygurat789

jem16 wrote: »

This read to me that you did.



Perhaps you didn't meant to put it in the same paragraph.
Allowable expenses of £330 does not appear in that paragraph



Yes I know and why I suggested work related expenses as opposed to benefits in kind.
These are opposites and you are confusing them


The whole point here though is that unless the OP chooses to answer the questions asked, we are all guessing as to exact amounts of the underpayment. The underpayment itself is not in doubt though.

No the underpayment has been made it's just a question of minimising it which the OP doesn't seem to want to do.