Self assesment tax return problem

elizabethbennett_2

Hi, my husband gave up working as a self employed sole trader during 2022. He started employment with a company in Sep 22 which went under two months later. The problem is this company have informed HMRC that he earned approx £6000 when in fact he only received approx £4500. He phoned to inform them about this a few months ago and he was told to fill in a mandatory reconsideration for our working tax credits claim (which we have yet to receive a response about). Now, while filling in his self assessment tax return they require figures for his work as an employee as well as his self employed income. Should he put in the (incorrect) figure of £6000 which HMRC has or the correct figure of what he actually received from this employer? 
Any help much appreciated

Dazed_and_C0nfused

elizabethbennett_2 said:

Hi, my husband gave up working as a self employed sole trader during 2022. He started employment with a company in Sep 22 which went under two months later. The problem is this company have informed HMRC that he earned approx £6000 when in fact he only received approx £4500. He phoned to inform them about this a few months ago and he was told to fill in a mandatory reconsideration for our working tax credits claim (which we have yet to receive a response about). Now, while filling in his self assessment tax return they require figures for his work as an employee as well as his self employed income. Should he put in the (incorrect) figure of £6000 which HMRC has or the correct figure of what he actually received from this employer? 
Any help much appreciated

Self Assessment returns don't ask for what was "received".

Do you mean the taxable pay was £4,500 not £6,000?

JGB1955

Was the £6K taxed at 20%? That would make roughly £4,500 after deductions for tax and NI.  Has he got his final pay slip from the company?  That would show tax and NI deducted 'to date'.

elizabethbennett_2

The employer has claimed to HMRC the taxable pay was £6000. He only received payslips (and pay) totalling £4500 taxable pay. He did not receive a p45 btw. 

The self assessment tax return has this section (copied and pasted)
"Pay from [Employer name] - total from your P45 or P60. Enter the amount before tax taken off:"

elizabethbennett_2

JGB1955 said:

Was the £6K taxed at 20%? That would make roughly £4,500 after deductions for tax and NI.  Has he got his final pay slip from the company?  That would show tax and NI deducted 'to date'.

Hi no it was not taxed. There was no final pay slip. It turned out the company was taken over by an asset stripper so he wasn't concerned with doing things correctly. But this is more about keeping things right with HMRC. The figure they have been given by the employer is wrong. Should he put in that figure anyway as that is what they have or should he put in the correct one? 

elizabethbennett_2

Dazed_and_C0nfused said:

elizabethbennett_2 said:

Hi, my husband gave up working as a self employed sole trader during 2022. He started employment with a company in Sep 22 which went under two months later. The problem is this company have informed HMRC that he earned approx £6000 when in fact he only received approx £4500. He phoned to inform them about this a few months ago and he was told to fill in a mandatory reconsideration for our working tax credits claim (which we have yet to receive a response about). Now, while filling in his self assessment tax return they require figures for his work as an employee as well as his self employed income. Should he put in the (incorrect) figure of £6000 which HMRC has or the correct figure of what he actually received from this employer? 
Any help much appreciated

Self Assessment returns don't ask for what was "received".

Do you mean the taxable pay was £4,500 not £6,000?

The employer has claimed to HMRC the taxable pay was £6000. He only received payslips (and pay) totalling £4500 taxable pay. He did not receive a p45 or p60 btw. 

The self assessment tax return has this section (copied and pasted)
"Pay from [Employer name] - total from your P45 or P60. Enter the amount before tax taken off:"

eskbanker

elizabethbennett_2 said:

JGB1955 said:

Was the £6K taxed at 20%? That would make roughly £4,500 after deductions for tax and NI.  Has he got his final pay slip from the company?  That would show tax and NI deducted 'to date'.

Hi no it was not taxed. There was no final pay slip. It turned out the company was taken over by an asset stripper so he wasn't concerned with doing things correctly. But this is more about keeping things right with HMRC. The figure they have been given by the employer is wrong. Should he put in that figure anyway as that is what they have or should he put in the correct one? 

Why wasn't any tax deducted, did he have a PAYE tax code?

It seems a strange scenario but the discrepancy between employer and employee records will need to come out eventually, so I can't think of any reason to falsify figures when self-assessing, and he should use the figures he believes to be correct, i.e. the ones he was given on payslips, which correspond to the payments....

elizabethbennett_2

eskbanker said:

elizabethbennett_2 said:

JGB1955 said:

Was the £6K taxed at 20%? That would make roughly £4,500 after deductions for tax and NI.  Has he got his final pay slip from the company?  That would show tax and NI deducted 'to date'.

Hi no it was not taxed. There was no final pay slip. It turned out the company was taken over by an asset stripper so he wasn't concerned with doing things correctly. But this is more about keeping things right with HMRC. The figure they have been given by the employer is wrong. Should he put in that figure anyway as that is what they have or should he put in the correct one? 

Why wasn't any tax deducted, did he have a PAYE tax code?

It seems a strange scenario but the discrepancy between employer and employee records will need to come out eventually, so I can't think of any reason to falsify figures when self-assessing, and he should use the figures he believes to be correct, i.e. the ones he was given on payslips, which correspond to the payments....

Hi, there was no tax as he didn't earn enough that year. It is strange and even though he has informed them their figure is wrong they didn't suggest any way of correcting it. No suggestion of falsifying figures btw! It's more about which figure to use. His figure is correct and he has proof. 

eskbanker

But if he started employment in September 2022 at £2+K/month, not knowing that it would finish before the end of the tax year, income tax should have been deducted via PAYE every month, rather than only in months after he'd exceeded his personal allowance.

However, bottom line remains that he should honestly declare his actual taxable income now, and then sort out any anomalies once HMRC have decided if they wish to challenge it....

Dazed_and_C0nfused

eskbanker said:

But if he started employment in September 2022 at £2+K/month, not knowing that it would finish before the end of the tax year, income tax should have been deducted via PAYE every month, rather than only in months after he'd exceeded his personal allowance.

However, bottom line remains that he should honestly declare his actual taxable income now, and then sort out any anomalies once HMRC have decided if they wish to challenge it....

They could have signed statement A on a new starter declaration though and got a cumulative code.

sheramber

What exactly  is  shown  on his payslips?