Personal allowance increase after SA tax return

bell

Hi

I completed a tax return to claim back some expenses related to my PAYE job (I have no self employed income)and following that HMRC have increased my personal allowance for the new tax year. What are the implications of this going forward? As I understand it they are estimating my expenses for this year based on last year's return. I have claimed a refund of last year's overpayment.

Do I need to complete a tax return next year to confirm my expenses? What happens if I don't?

Phoenix72

How much are the expenses?

Dazed_and_C0nfused

bell said:

Hi

I completed a tax return to claim back some expenses related to my PAYE job (I have no self employed income)and following that HMRC have increased my personal allowance for the new tax year. What are the implications of this going forward? As I understand it they are estimating my expenses for this year based on last year's return. I have claimed a refund of last year's overpayment.

Do I need to complete a tax return next year to confirm my expenses? What happens if I don't?

You cannot have a Personal Allowance greater than £12,570, I presume you mean your tax code allowances?

If you are sent a notice to file a return then you either need to file one or ask HMRC to withdraw the notice.

If you ask them to withdraw it I would presume they will remove the expenses for 2024-25 and ask you to pay any tax underpaid that results from this.

If you don't expect to have a similar level of expenses this year then ask them to update your code to a more realistic figure.

Also, I presume you are aware that HMRC are simply reacting to how you have completed the Self Assessment return?  There is a question near the end about keeping your tax code as up to date as possible and they will have acted on how you answered/didn't answer that question.

FIREmenow

If HMRC don't want you to continue doing self assessment tax returns, PAYE workers can declare many of their job allowances here: https://www.gov.uk/tax-relief-for-employees/professional-fees-and-subscriptions

I use this online form, and they assume the same level of allowances for the new tax year and change your tax code accordingly. If you need to update the amounts (or cancel them) you can fill it in again for the relevant tax year and it will supercede any previous submissions or assumptions for that year.

bell

FIREmenow said:

If HMRC don't want you to continue doing self assessment tax returns, PAYE workers can declare many of their job allowances here: https://www.gov.uk/tax-relief-for-employees/professional-fees-and-subscriptions

I use this online form, and they assume the same level of allowances for the new tax year and change your tax code accordingly. If you need to update the amounts (or cancel them) you can fill it in again for the relevant tax year and it will supercede any previous submissions or assumptions for that year.

This is great information. Just what I was looking for

FIREmenow

As Dazed says in post above, don't ignore HMRC if they ask you to keep doing self assessment as I think there's a fine/penalty.  Ask them to withdraw it if you don't think you need to do one again.

If you are sent a notice to file a return then you either need to file one or ask HMRC to withdraw the notice.