Self-employed to PAYE P46 form confusion

amberrb

Hi all!

I've been self-employed for the last four years (didn't earn enough to pay taxes, just class 2 NI contributions) and I'm just about to go into a PAYE job. I was told by my new employer that I don't need a P46, but the pre-employment forms do contain questions to gather that information.

I'm confused as to whether I should tick option A (This is my first job since last 6 April and I have not been receiving taxable Jobseeker’s Allowance, Employment and Support Allowance, taxable Incapacity Benefit, State or Occupational pension.)
or option B on the form (This is now my only job, but since last 6 April I have had another job, or received taxable Jobseeker’s Allowance, Employment and Support Allowance or taxable Incapacity Benefit. I do not receive a State or Occupational Pension.)

Just to emphasize, I've never needed to pay tax, just class 2 NI contributions. I think I should tick box A but I was hoping to get some advice first.

Thank you in advance!

Dazed_and_confused

Ticking box A is fine but leaves you with the possibility of owing tax when you come to complete your 2018:19 self assessment return.

If you tick box B this reduces the scope for owing tax because you will only get your Personal Allowances for the months you are paid so some will be available to go against your self employment income.

But it might make no difference on a monthly basis, that depends on how much you are earning each month in this new job.

Savvy_Sue

Your employer is right, there's no longer a P46 but the relevant questions are still asked, and to be fair our payroll company still CALL it a P46 even though it's not!

You should be able to work out your gross salary from now until the end of the current tax year - I'm guessing five months. Add that figure to your earnings from self-employment. Is the answer more or less than £11850?

If less, tick Box A with a clear conscience: you shouldn't owe any tax this year.

If more, take Dazed's advice - if you tick Box B you may end up overpaying tax but you definitely won't owe any.

NB your tax code may be other than 1185L, but that's the 'standard' personal allowance for 2018-19.

amberrb

Thank you very much to both of you! I get nervous about messing my taxes up so I really appreciate your help