Does tax code need changing

wheelz

Last year when I did my self-assessment I opted for payment from the rental income to be collected through my salary (PAYE). My tax code for the 2018-2019 tax year was changed. I'm on k-code which seems to make sense. From April this year I have no rental income anymore and sold my property. Did my tax return. Does my tax code need to change because I no longer have rental income or is it amended automatically in April when the money has all been taken (I wish I had just payed it but the online form seemed to prefer it you had it paid through PAYE)? Do I need to tell HMRC that I no longer have rental income. I have spoken with them (for something else) a few months ago and asked whether I needed to do anything next year and they said I didn't if I didn't have any rental income anymore.

Dazed_and_confused

Your current tax code doesn't need to change in respect of the tax owed for 2016:17 tax year.

Your tax code for 2019:20 won't include this element but might include any tax underpaid for 2017:18 - what was the outcome of your 2017:18 tax return you have sent them?

If your current tax code also includes a reduction to try and collect tax due on rental income for the current year (2018:19) then this would need to be adjusted if you don't have that income this (tax) year.

If you don't have any other reason to file a return then it might be sensible to make sure they understand the rental income has ended. This may stop you having to file a return for 2018:19 in due course (but don't ignore it if you are sent one, doing that is the start of the road to all sorts of problems!)

wheelz

I had overpaid this year (2017-2018) and got money back. It arrived very quickly in my bank account I was pleasantly surprised, I've not had a statement I guess that comes later some time? That's what I was wondering if the code is trying to collect tax due on rental income for the current year. My last statement (Dec 2017) says that "Adjustment to 2nd payment on account for 17/18 was in July 2018 and after that the balance would be 0. Does it state that anything on the notice? I guess I could just ring them to adjust it if needed. I was hoping that the person I spoke with at hmrc would have alerted me to this. They just said that I didn't have to fill in a self assessment next year.

badmemory

wheelz wrote: »

They just said that I didn't have to fill in a self assessment next year.

Make sure you get this in writing. Or file it anyway & tick the "I don't need to do this again" box.

Dazed_and_confused

That's what I was wondering if the code is trying to collect tax due on rental income for the current year.

If you have got the tax code notice to hand you can check it on your personal tax account on gov.uk.

The bit that won't change is something like underpayment of tax.
But if there is an entry for rents, rental income or income from property then that is collecting extra tax on any rents for the current tax year and based on your op could be removed.

Important to understand the difference between the two things before phoning HMRC and getting in a pickle!

wheelz

Yes it says Less Property Income and underneath it says Less adjustment for tax you owe (earlier year). The notes say that the first one is for property income, which I haven't got anymore, and the second is collecting the tax through PAYE from last year's tax year (2016-2017). I received the coding notice in January a few months after I submitted my tax return / self-assessment in 2017. I think I understand it ok. Thank you for your help, I will ring them.

wheelz

badmemory wrote: »

Make sure you get this in writing. Or file it anyway & tick the "I don't need to do this again" box.

Why is this important? I have done this year's self-assessment so too late for that. Also didn't see a box that I could tick for don't need to do this again. It's a self-assment I gues, you assess yourself whether you need to fill one in. If your reasons to fill one in have gone away you don't need to do one, or is that too simplified? Anyway, it will become clear when I speak to them.

badmemory

Once you start filling one in then you need to keep filling one in. Being told over the phone that you don't need to is not "cast in stone". There are several threads on here where people have been told that they don't need to file a return so they haven't done. Next they are hit by penalties. Get it in writing. If it isn't in writing it doesn't exist. They won't be able to find a record of your call.

wheelz

Guess filling one can be really quick when there's nothing to report. Hope there are boxes to say nothing. Because if you have no interest and no rental income you leave it blank, unless I have it wrong.

Dazed_and_confused

Guess filling one can be really quick when there's nothing to report. Hope there are boxes to say nothing. Because if you have no interest and no rental income you leave it blank, unless I have it wrong.

You do have it wrong. This thread is primarily about your tax code so presumably you have either a job or pension which is being taxed under PAYE. The income from which would have to be declared on your tax return should you need to complete one.

dori2o

If you have been told you don't need to do one the unless you are told differently, i.e. you receive a notice telling you to do it, then you will have nothing to worry about.

If you have signed up to the personal tax account (PTA) then by logging in after 6 April next year it will tell you if a tax return is expected.

If it is and you don't meet the criteria you can send an online submission to object to the request.

Using the PTA now, you can also review your tax code and send an online submission asking for any unnecessary/incorrect adjustments to be reviewed/removed.