UC and self assessment owed

Vicky_Jones

Hi, need some advice pls.

I was self employed from Apr 23 to Sep 23 and have worked out I will need to pay roughly £1300 in tax and NI.

I know I won't be able to afford this so am thinking about asking for it to be collected through my PAYE as I've been employed since Sep 2023. I seem to meet all the criteria.

What I'm wondering is whether UC will disregard this money owed to HMRC and whether my UC payment will increase while I'm paying it back even though it's for a previous tax year?

Thanks in advance,

Vicky

huckster

Depends on how it is reported on RTI (PAYE).

If the  tax is added as third party payment towards previous liability, UC system won't consider this separate payment. So the earnings amount will purely be current gross less current tax, NI and employee pension contribution. So you would not gain extra UC.

Unless someone else on this forum is 100% certain how this works, you might want to contact HMRC

Yamor

The way HMRC are paid is via a change to your tax code, so the (increased) deductions from your wages will be taken into account by UC, and therefore your UC would increase.

It is questionable whether the Regs really allow for this, but that is how it works in practice.

Dazed_and_C0nfused

You have to file your Self Assessment return by 30 December 2024 for this to be possible.

You would get a revised tax for the 2025-26 tax year.

If it isn't possible then the tax is payable, direct to HMRC, by 31 January 2026