PAYE requested to SELF-ASSESSMENT

Blameitontherain.

Hello!

I hope someone can help me or at least enlighten me on this situation I am in. First of all, I am married with 4 kids and have been working in the National Health Service for over 16 years now. Every now and then HMRC will send me letters saying changes to my tax code, which I didn't pay much attention as when it comes to tax as full time employed staff, I know my employer is primarily responsible for it. After many months HMRC once again sent me letters saying I would need to fill in a self-assessment. During that time, I was busy at work, every time they will send me letter about self-assessment I'll disregard it not knowing that the more you delay filling there will be a corresponding penalty. Due to the pressure of being penalized. One day I decided to fill in my self-assessment, on-line. I felt completely against it at first because I wasn't sure of what I was doing. I had my p60 at hand but I wasn’t sure how to fill the boxes. So eventually, I did it anyway. For the past 4years starting from 2010 it worked out that I owe HMRC £3000 totalling a whopping £12000 of back taxes and also penalties. I didn't believe it at first because every month I receive my pay slip there will be a corresponding deduction for my PAYE and NI A. So I just left it there and carried on with my life. Then one day a bailiff went and drops a letter in my letter box saying that I have to pay the £12000 I owe HMRC. I spoke to the bailiff threatening me that he will take whatever possession I have with value. Because I want the whole situation resolved I agreed on a payment scheme. It will take me 2 years to pay what I owe with HMRC. What I don't understand, as a full time employee on of the National Health Service, why am I still required to fill in a self-assessment form? If I do need to fill in a SA form can I get my tax recalculated.


Please help.

comeandgo

There can be many reasons why HMRC require you to complete self assessment if you are also employee. I have a company car and have to complete one so that mileage claims can be calculated. My husband is company director and he has to complete one. My friend has many different pensions, she has to complete one, my brother in law has rented property.
When you complete them your tax is calculated and any repayments are paid to you.

tacpot12

You probably need advice from a local tax expert who can look at the SA forms you have submitted and work out if you actually owe the tax that HMRC claim you owe.

PAYE will normally deduct the correct amount of tax unless you receive any benefits at work (e.g. company car) or have other income.

xylophone

HMRC £3000 totalling a whopping £12000 of back taxes and also penalties.

This doesn't add up.



As you have now realised, if HMRC instruct you to file a tax return you must do so.

https://www.gov.uk/self-assessment-tax-returns/overview

If you can't work it out

https://www.local-accountants-uk.co.uk/

Hasbeen

You can check your estimated penalties and appeal if required below

https://www.gov.uk/self-assessment-tax-returns/penalties

00ec25

Blameitontherain. wrote: »

Every now and then HMRC will send me letters saying changes to my tax code, which I didn't pay much attention as when it comes to tax as full time employed staff, I know my employer is primarily responsible for it.

no, you are responsible for your own taxes, hence self assessment. Part of the tax you may owe will be collected via PAYE but the only time PAYE is 100% correct is if you receive only pure salary. The fact your tax codes have been altered several times suggests that is not the case with you. The fact you ignored those code changes may explain why you were eventually put on self assessment because HMRC could not make sense of what was going on and wanted you to give them the detailed info that arises from a "proper" tax return so they could then give you a "proper" code

Your employer's responsibility starts and stops with the physical act of deducting tax from your salary in accordance with your tax code.

have you claimed any expenses? (uniform laundry? professional body subs? mileage?)

Blameitontherain. wrote: »

After many months HMRC once again sent me letters saying I would need to fill in a self-assessment......

What I don't understand, as a full time employee on of the National Health Service, why am I still required to fill in a self-assessment form?

as you now know, once you have been asked to submit a tax return you must do so within the deadlines or you will be penalised. there are very few acceptable excuses for not submitting on time, hence the very high penalty process to "encourage" you to do so

once penalties have been applied they have nothing to do with whether you do or do not owe tax. A large part of the penalty is based on the fact you did not submit the return.

There will also come a point where HMRC "get annoyed" and may have applied a "determination" to your account. that means they basically guess what they think you owe (and are notoriously wild guessers) and add the tax from that figure to what you owe. They then charge interest on anything you have not paid

Blameitontherain. wrote: »

If I do need to fill in a SA form can I get my tax recalculated.

by the sounds of it you need to fill out several year's worth of tax returns and only when you have submitted those will your actual tax due be known and can be adjusted

it is unlikely you will get the non filing penalties removed

you probably need to see an accountant to help you do the tax returns (especially if a determination has been applied) given HMRC have now passed the debt to the debt collectors and those sort of people will not go away until you sort it

dori2o

Along with the tax codes that you chose to ignore, can you remember at any time being sent a tax calculation for any of those years?

One of the reasons for someone who's income falls solely within PAYE to be asked to complete self assessment is for failing to respond to requests to repay underpaid tax.

Up until the 2015/16 tax year the process of repaying underpaid tax that cannot be collected by restriction to your tax code is as follows.

A tax calculation (P800) is issued following the end of the tax year.

Approx 2 weeks later a letter is sent requesting payment of the underpaid tax, or contact to arrange a payment arrangement. The letter is the VPL1, a voluntary payment request.

If no payment or contact is made for 12 weeks then the next letter is sent. This is the VPL2, requesting payment or contact to clear the underpayment.

If no contact is made within a further 12 weeks, then HMRC cancel the calculation and request that you complete a self assessment form.

They do this for a simple reason. Prior to the 16/17 tax year calculations for underpaid tax had no lawful right to recover the tax. The calculations were informal and HMRC had no power to enforce the underpaid tax calculated by the informal assessment. Hence the voluntary payment letters asking for voluntary payment of the tax.

If no payment or contact is received then HMRC cancelled the calculation and requested a tax return simply because it would make the resulting tax calculation legally recoverable. It also also means that interest and penalties can be charged on the balance according to the legislation.

From the 2016/17 tax calculations this process will no longer apply.

Any calculations issued after 6 April 2017 from PAYE are no longer informal, they are Simple Assessments. HMRC has full power of recovery meaning no need to transfer people into self assessment.

The P800 will be replaced with a PA302 Simple Assessment calculation.

OP, you need to check that the calculations are correct. That the pay/tax figures used in the calcs are correct. If you have penalties then try and appeal them, giving reasons why you were unable to fill them in on time. Worst thing that happens with an appeal is its rejected and the penalty stands.

This is a lesson to everyone out there. Tax is YOUR responsibility, not your employers, not your accountants, not HMRC's, its YOURS.

Changes are coming, some as early as 31 May 2017, which people will not expect. Everyone needs to be taking much.more responsibility, checking their tax codes, checking their salary slips/payslips, ensuring the codes issued are being used, making sure if you have more than 1 employment, even with the same company, you're not getting too many tax allowances.

Where possible sign up to the personal tax account, it allows you to update estimated annual pay, update company car details, check tax codes, etc etc and many more features will be added in future.

Imo its also time for tax basics to form part of the national curriculum, so that those entering the world of work will have a basic understanding of how things work to try and make sure they dont end up with the same issues the OP has.

Moral of the story is, dont just ignore stuff. Dont just file it away in a drawer, look at it, read the notes, if you dont understand it then use the various contact methods for HMRC and ask.

I appreciate most people are busy, most people I correspond with daily are busy, but you have to find the time for important things like tax.

badmemory

dori2o wrote: »

Imo its also time for tax basics to form part of the national curriculum, so that those entering the world of work will have a basic understanding of how things work to try and make sure they dont end up with the same issues the OP has.

I couldn't agree more with this. Also with more people being in non-standard employment this is going to become even more necessary.

dori2o

badmemory wrote: »

I couldn't agree more with this. Also with more people being in non-standard employment this is going to become even more necessary.

We do get invited to a few local schools/colleges every year and go in and give a presentation which is generally well received. But its not enough.

Dazed_and_confused

I hope these presentations are going to include the Personal Savings Allowance as if you ever look at the Savings & Investment board you'll see that is confusing us adults so sure the kids will need a lesson or two whilst they build up their savings!!

dori2o

I would think so.

Ive not done one since PSA came in and wont do one this year as I've used up my 3 volunteer days already this year.