Self- Assessment first timer - confused PAYE yet owe £5.5k in tax

Denis0001

Hi all, would welcome your inputs.

First time self-assessor with P60 reflecting income of £117,672 and tax of £34,441, with a P60 tax code of 1271L.Additonally P11d is showing £3208 for company car.

I have no additional income outside of current job and no capital gains or tax loss harvesting. 

Following completion of the form, I have been informed that I owe a tax payment of £5,518.80. 

Excuse my naivety, as not particularly clued up on finance (I'm learning!), but does this feel correct?   

Dazed_and_C0nfused

It's highly likely to be because your (adjusted net) income is more than HMRC estimated when calculating your tax code for 2021:22.

Unless you have some Gift Aid or RAS pension contributions your adjusted net income is high enough that you will lose the majority of your Personal Allowance. 

Which seems to have been given provisionally per your tax code.

It also seems unlikely that you paid any tax on the company benefit during the year so that will be adding to the amount now due.

Once you have filed your return you should check your Personal Tax Account and make sure HMRC are using a sensible estimate for your earnings for the current tax year.  And also for 2023:24.

[Deleted User]

Denis0001 said:

Hi all, would welcome your inputs.

First time self-assessor with P60 reflecting income of £117,672 and tax of £34,441, with a P60 tax code of 1271L.Additonally P11d is showing £3208 for company car.

I have no additional income outside of current job and no capital gains or tax loss harvesting. 

Following completion of the form, I have been informed that I owe a tax payment of £5,518.80. 

Excuse my naivety, as not particularly clued up on finance (I'm learning!), but does this feel correct?   

Unfortunately you received full personal allowances of 12570 when, on that income ,  you should have received around 2500. That’s a big part of it - approx £4000. The tax due on the BIK would be c£1280. It’s close to the figure that you stated.

Denis0001

Thank you @[Deleted User] and @Dazed_and_C0nfused for your feedback- really helpful. I had fortuitously already adjusted my earnings expectation for this year and so tax code has been adjusted (to a very small number!)