PAYE and Self Assessment mix up

The_Palmist

Hi All, 

Will appreciate any advice as the closer it gets to deadline the more concerned I am getting.

I am in higher tax bracket (PAYE) and have a BTL so I have been doing self assessment and paying additional tax, couple of years ago I did a deed of trust and filled form 17 to direct 99% of rental income to my wife who is in lower bracket. The effective date on Form 17 is January 2021 but I received that confirmation from HMRC one year after submitting form 17. 

My share of rental income is now under £1000 and according to HMRC checks I do not need to submit tax return but I received a reminder and I panicked and made an absolute hash of it, I submitted my tax return and mixed up employment section with rental income and ended up submitting y return with no employment.

I called HMRC today and explained, they agreed to close my self assessment account but advised that my submitted self assessment can not be withdrawn and I should just add my employment details in. So when I add the figures from last P60, HMRC self assessment calculation comes up with almost £3K of tax to be paid. I have been working for a company and all my tax and payment have been through payroll and PAYE. My last P60 does show final tax code to be BR M1 which felt a bit odd.

My problem now is that my company says PAYE is correct and that I have been paying right tax, anything which was underpaid in 2022-2023 would have been adjusted in 2023-2024 but HMRC calculator think I need to pay another £3K. All of this hassle for an year where I wasn't and shouldn't have submitted tax return.

So shall I just leave my employment as 0 or go with what it says on P60 but then how can I challenge the £3K. My payroll department hasn't been very helpful. 

Figures from P60
Total for year - 78500
Tax deducted - 16300
Final Tax Code - BR M1


Any help appreciated.

[Deleted User]

You haven’t supplied any figures and it is impossible to say. Did you enter the tax deducted from your employment on the form?

Dazed_and_C0nfused

[Deleted User] said:

You haven’t supplied any figures and it is impossible to say. Did you enter the tax deducted from your employment on the form?

This ^^^^

Without some detail it's all guesswork

The_Palmist

Dazed_and_C0nfused said:

[Deleted User] said:

You haven’t supplied any figures and it is impossible to say. Did you enter the tax deducted from your employment on the form?

This ^^^^

Without some detail it's all guesswork

Figures now added in original post, my point was that I filled a self assessment when I didn't need to, is there any way to make it null and void.

Thanks in advance and I appreciate you taking the time to respond.

Dazed_and_C0nfused

The_Palmist said:

Dazed_and_C0nfused said:

[Deleted User] said:

You haven’t supplied any figures and it is impossible to say. Did you enter the tax deducted from your employment on the form?

This ^^^^

Without some detail it's all guesswork

Figures now added in original post, my point was that I filled a self assessment when I didn't need to, is there any way to make it null and void.

Thanks in advance and I appreciate you taking the time to respond.

Given you have now filed a return I think the chances are slim to nothing.

Not sure what this has got to do with your payroll department, they can only know if the tax deducted was in accordance with the tax code they operated, whether that was issued by HMRC or based on a new starter declaration you completed.

But irrespective of that I presume you realise that even if you successfully got HMRC to withdraw the requirement for a tax return (99.99% not going to happen) then that would simply mean they review your tax liability and send you a PAYE calculation (P800 or PA302), it doesn't mean any tax owed simply gets forgotten!

You might want to ensure your current tax code is up to date as it can be as you may be continuing to build up tax arrears if code BR is being used on that level of income.

The_Palmist

Dazed_and_C0nfused said:

The_Palmist said:

Dazed_and_C0nfused said:

[Deleted User] said:

You haven’t supplied any figures and it is impossible to say. Did you enter the tax deducted from your employment on the form?

This ^^^^

Without some detail it's all guesswork

Figures now added in original post, my point was that I filled a self assessment when I didn't need to, is there any way to make it null and void.

Thanks in advance and I appreciate you taking the time to respond.

Given you have now filed a return I think the chances are slim to nothing.

Not sure what this has got to do with your payroll department, they can only know if the tax deducted was in accordance with the tax code they operated, whether that was issued by HMRC or based on a new starter declaration you completed.

But irrespective of that I presume you realise that even if you successfully got HMRC to withdraw the requirement for a tax return (99.99% not going to happen) then that would simply mean they review your tax liability and send you a PAYE calculation (P800 or PA302), it doesn't mean any tax owed simply gets forgotten!

You might want to ensure your current tax code is up to date as it can be as you may be continuing to build up tax arrears if code BR is being used on that level of income.

Thank you again.

So, I reviewed all my payslips since starting with this company in May 2022.

For first couple of months my tax code was 1257L then for next 7 months it was Basic Rate Month 1 or BR M1 then it changes again to 1257L for a month and then changes to 1204L Month 1. I have no idea why my tax code will change to BR M1 after starting on the right tax code when I first joined the company.

I have never requested any change and just let PAYE do it's thing.

sheramber

If BR tax had been applied for the whole year the tax deducted would be £ 19625. 

So it looks like the tax calculation is not giving you any personal allowance or 20 % tax rate.

Check what you have entered or boxes ticked on your return.

chrisbur

The_Palmist said:

Dazed_and_C0nfused said:

The_Palmist said:

Dazed_and_C0nfused said:

[Deleted User] said:

You haven’t supplied any figures and it is impossible to say. Did you enter the tax deducted from your employment on the form?

This ^^^^

Without some detail it's all guesswork

Figures now added in original post, my point was that I filled a self assessment when I didn't need to, is there any way to make it null and void.

Thanks in advance and I appreciate you taking the time to respond.

Given you have now filed a return I think the chances are slim to nothing.

Not sure what this has got to do with your payroll department, they can only know if the tax deducted was in accordance with the tax code they operated, whether that was issued by HMRC or based on a new starter declaration you completed.

But irrespective of that I presume you realise that even if you successfully got HMRC to withdraw the requirement for a tax return (99.99% not going to happen) then that would simply mean they review your tax liability and send you a PAYE calculation (P800 or PA302), it doesn't mean any tax owed simply gets forgotten!

You might want to ensure your current tax code is up to date as it can be as you may be continuing to build up tax arrears if code BR is being used on that level of income.

Thank you again.

So, I reviewed all my payslips since starting with this company in May 2022.

For first couple of months my tax code was 1257L then for next 7 months it was Basic Rate Month 1 or BR M1 then it changes again to 1257L for a month and then changes to 1204L Month 1. I have no idea why my tax code will change to BR M1 after starting on the right tax code when I first joined the company.

I have never requested any change and just let PAYE do it's thing.

I assume that the 1257L code when applied the second time was on a month 1 basis.
The problem is the BR code for 7 months possibly 8
Where did that come from HMRC, employer error, or something else?
Without seeing all the forms that went back and forth between you, your employer, and HMRC there is no way of knowing, and even with the knowledge of what caused this you are more likely than not to end up having to pay the tax.

The_Palmist

chrisbur said:

The_Palmist said:

Dazed_and_C0nfused said:

The_Palmist said:

Dazed_and_C0nfused said:

[Deleted User] said:

You haven’t supplied any figures and it is impossible to say. Did you enter the tax deducted from your employment on the form?

This ^^^^

Without some detail it's all guesswork

Figures now added in original post, my point was that I filled a self assessment when I didn't need to, is there any way to make it null and void.

Thanks in advance and I appreciate you taking the time to respond.

Given you have now filed a return I think the chances are slim to nothing.

Not sure what this has got to do with your payroll department, they can only know if the tax deducted was in accordance with the tax code they operated, whether that was issued by HMRC or based on a new starter declaration you completed.

But irrespective of that I presume you realise that even if you successfully got HMRC to withdraw the requirement for a tax return (99.99% not going to happen) then that would simply mean they review your tax liability and send you a PAYE calculation (P800 or PA302), it doesn't mean any tax owed simply gets forgotten!

You might want to ensure your current tax code is up to date as it can be as you may be continuing to build up tax arrears if code BR is being used on that level of income.

Thank you again.

So, I reviewed all my payslips since starting with this company in May 2022.

For first couple of months my tax code was 1257L then for next 7 months it was Basic Rate Month 1 or BR M1 then it changes again to 1257L for a month and then changes to 1204L Month 1. I have no idea why my tax code will change to BR M1 after starting on the right tax code when I first joined the company.

I have never requested any change and just let PAYE do it's thing.

I assume that the 1257L code when applied the second time was on a month 1 basis.
The problem is the BR code for 7 months possibly 8
Where did that come from HMRC, employer error, or something else?
Without seeing all the forms that went back and forth between you, your employer, and HMRC there is no way of knowing, and even with the knowledge of what caused this you are more likely than not to end up having to pay the tax.

There has been no back and forth of forms with me, I have asked my payroll if they can shed some light. I am guessing change to 1204L code is a mechanism by HMRC to reclaim any unpaid tax. 

BoGoF

Go on to your online Personal Tax Account (you will have to register if not already done so) and see what codes were issued during 22/23.

Ultimately it isn't going to make any difference to the underpaid tax position, it is your liability and will have to be paid.