self assessment and paying 2015/16 tax in advance

asset2004

Submitting my self assessment as I have a p/t job that's only 12 hours a week with some overtime, plus I have income from property.

I don't earn enough with my p/t job to pay tax but with the property income added I need to pay tax. However it has automatically added a payment for 2015/16 tax onto the sum due and then added the same figure onto another payment in July!
I don't understand how this can be correct as my p/t salary will change depending if I work any extra hours plus the property income will be different in the next tax year too.

How can I change this on my self assessment form?

TIA

booksurr

if you have a tax liability arising from income outside of PAYE (eg self employment, rental income etc) and the amount of tax you owe in the year is >£1,000 you will automatically be required to Pay on Account.

The system automatically adds 50% of the current year's bill on to the amount you have to pay and then allocates the other 50% to the next payment date

the whole point is that PAYE people pay tax as they go. Self emplpyed and rental income don't, they only know how much tax they are liable for when they calculate their tax return. If HMRC only collected that tax each 31 Jan then those people would be paying all their tax 10 months after the end of the tax year to which it relates. Therefore to ensure that HMRC collect some money they require you to make a payment on account in January and the following July

suppose that in your first year (eg 13/14) you have a tax liability of £1,000 as at April 2014 but you have until 31 Jan 2015 to pay that. If there was no POA the liability for 15/16 could be paid in Jan 2017. In contrast PAYE people would pay all their tax by April each year

so
13/14 = £1,000 POA 50% = £500 so....
In Jan 15 you have to pay 1,500 being the totality of 13/14 and half of 14/15. In July 15 you then pay the remaining 50%. So you are still better off because you have earned 10 months income (Apr 14 - Jan 15) in the 14/15 tax year before you pay any tax in respect of that year. You then pay the remaining 50% in July 4 months after then end of the tax year !

yes it is an estimate, as that is all HMRC have to go on, last year's figures (13/14). You can alter the POA amount if you expect the estimate to be higher than what you will earn in the current year (14/15), BUT if you end up underpaying as a result you will be charged interest and possibly a penalty if your "error" is too large. Obviously you will submit the 14/15 tax return by Jan 16 and at that point if your actual 14/15 figures are different to the total POA paid in Jan 15 and Jul 15 there will be a "balancing adjustment"

all of this is explained on line if you look - you are asking a factual question and the answer is already out there - go read it, here is a start... http://www.hmrc.gov.uk/manuals/salfmanual/salf303.htm

TheCyclingProgrammer

We are almost 10 months into the current tax year, therefore you must have a good idea of how much tax you expect to owe for this year by now. Is it more or less than the previous tax year? If it's less you can reduce the payments on account to reflect this. If it's more you'll have a balancing payment to pay next Jan.

If you put aside the tax on your income as you earn it you would have enough to cover your payments on account. Always set your tax aside as you earn for this reason.

As explained above you aren't paying anything in advance. You're still paying in arrears. In your post you talk about the "next tax year". You realise 15/16 is the current tax year don't you?

Pennywise

An alternative is for you to ask HMRC to issue a BR tax code on your part time job, so that you are taxed fully on all your wages, and then your other income is covered by your personal allowance, so there'd be no large outstanding tax bill after the end of the year and no worries about payments on account.

asset2004

Thanks for the replies.
A couple of other questions - with expenses taken off the profit is around £13000, so my reckoning is I owe around £600 tax (minus the £10k allowance, so paying tax on the £3000 profit), however the SA says I owe over £1100 and I can't see where that has came from/
There's also over £500 that it's looking for in advance for the 2015/16 tax year to be added also.

Additionally I do not earn enough with my p/t time to pay NI and I'm not registered self employed. How can I make regular NI payments or is there a way I can catch up what I owe?
TIA

Darksparkle

asset2004 wrote: »

Thanks for the replies.
A couple of other questions - with expenses taken off the profit is around £13000, so my reckoning is I owe around £600 tax (minus the £10k allowance, so paying tax on the £3000 profit), however the SA says I owe over £1100 and I can't see where that has came from/
There's also over £500 that it's looking for in advance for the 2015/16 tax year to be added also.

Additionally I do not earn enough with my p/t time to pay NI and I'm not registered self employed. How can I make regular NI payments or is there a way I can catch up what I owe?
TIA

If you want someone to confirm if the tax is correct you'll need to give the full income details.

You only get one personal allowance, you don't get one for your employment and your property income.

You can make voluntary NIC payments - https://www.gov.uk/pay-voluntary-class-3-national-insurance/overview

[Deleted User]

If your 'profit' is £13000, the tax due on this income would indeed be £600. However you state that you also have a part time job. If the calculation does show a tax liability of £1100 I would suggest that these earnings amount to around £2500. If that is the case your total income is £15500 and the tax on that would be £1100. The payment on account for 2015/16 (the current tax year, so not in advance) would be half of that.

Remember the self assessment that you are now completing relates to 2014/15 tax year which ended some ten months ago - some of the rental income that you are declaring was received as far back as April 2014.