Paying 15-16 tax through 17-18 PAYE

olem

So, the question on the self assessment tax return is:

If you are submitting by 30 December, owe tax for 2015-16 and have a PAYE tax code, do you want us to try to collect the tax and Class 4 NICs due (if below £3,000) through your tax code for 2017-18?

To me that seems like a no-brainer? They're going to delay requiring payment from end of January 2017 to April 2017, and then give me a 12 month free interest loan to pay off?

It seems to me that I should stash the money in savings and pay it off slowly from PAYE income. It seems too good to be true - am I missing something here? Is it not in fact interest free?

Dazed_and_confused

It has always been interest free so far, your self assessment account will be updated to show the tax due for 2015:16 is going to paid off via your (2017:18) tax code leaving you nothing to pay in respect of your 2015:16 balancing payment.

It seems to me that I should stash the money in savings and pay it off slowly from PAYE income.
By this do you mean you will effectively pay yourself a bit each month from these savings to make up for the lower take home pay you will receive during 2017:18 because your tax code will include the tax owed for 2015:16?

polymaff

olem wrote: »

To me that seems like a no-brainer? They're going to delay requiring payment from end of January 2017 to April 2017, and then give me a 12 month free interest loan to pay off?

A no-brainer, indeed. Put off the date of payment by filing in time to get the collection of the tax owing set back by, on average, nine months.