Self assessment query

masonic

Please do come back and update us if HMRC ask you to enrol for SA after the end of this tax year (they'll no doubt assume the interest will continue at this level). It will be interesting to see whether this was a one-off for this tax year, or they are comfortable letting those earning >£10k interest pay the tax through PAYE on an ongoing basis.

JV_21

masonic said:

Please do come back and update us if HMRC ask you to enrol for SA after the end of this tax year (they'll no doubt assume the interest will continue at this level). It will be interesting to see whether this was a one-off for this tax year, or they are comfortable letting those earning >£10k interest pay the tax through PAYE on an ongoing basis.

Will do. I don't even mind completing it but the whole payment on account thing scared me off.

Albermarle

masonic said:

Please do come back and update us if HMRC ask you to enrol for SA after the end of this tax year (they'll no doubt assume the interest will continue at this level). It will be interesting to see whether this was a one-off for this tax year, or they are comfortable letting those earning >£10k interest pay the tax through PAYE on an ongoing basis.

Was there not a proposal to increase this £10K of interest limit anyway? If so then clearly it is not a big issue for them.

masonic

JV_21 said:

masonic said:

Please do come back and update us if HMRC ask you to enrol for SA after the end of this tax year (they'll no doubt assume the interest will continue at this level). It will be interesting to see whether this was a one-off for this tax year, or they are comfortable letting those earning >£10k interest pay the tax through PAYE on an ongoing basis.

Will do. I don't even mind completing it but the whole payment on account thing scared me off.

It's a bit annoying to have to pay an instalment in advance, but you may find what they do to your tax code collects an assumed amount of tax for 2025/26 in advance.

Albermarle said:

masonic said:

Please do come back and update us if HMRC ask you to enrol for SA after the end of this tax year (they'll no doubt assume the interest will continue at this level). It will be interesting to see whether this was a one-off for this tax year, or they are comfortable letting those earning >£10k interest pay the tax through PAYE on an ongoing basis.

Was there not a proposal to increase this £10K of interest limit anyway? If so then clearly it is not a big issue for them.

I wasn't aware of there being a proposal, but it seems a sensible move assuming they have sufficient confidence in the information they receive. Having seen many instances of errors/omissions reported here, it still behoves the taxpayer to check the calculation carefully.

I am surprised they continue to ask me to complete one, given I have entered nothing in my last 7 returns that would require me to fill one out. But I am not going to notify them I don't need to fill one out, as I prefer to supply them with the correct information in the first instance (and not have my tax code messed about with).

WindfallWendy

Dazed_and_C0nfused said:

JV_21 said:

No. It correctly captured all my income from my job and bank interest

If you choose to now complete a tax return you will have to pay any tax due direct to HMRC long before 6 April 2025.  Paying it via your tax code over the 12 months from 6 April 2025 to 5 April 2026 won't be an option.

Just to clarify - as I was muddled for a moment - it is the act of completing a tax return which makes the tax payable sooner rather than later. And therefore if HMRC say they will use PAYE to claim the tax owed, then that is better so don't do a tax return. Yes?

WindfallWendy

And also, my plan for earning >£1000 interest which I will have to declare on my SA tax return next year (due to some rental income I received, which has now stopped, which I've told HMRC about, so I'm hoping I won't have to do SA for 25/26) is to make an overpayment on my pension in March which will counter any tax owed and means they owe ME money (which worked for 23/24). 

Point of issue though.... if I earn £1200 interest in 24/25, but no longer have rental income, I will still have to tell HMRC about it, won't I? And then pay tax on £200? 

JV_21

masonic said:

JV_21 said:

masonic said:

Please do come back and update us if HMRC ask you to enrol for SA after the end of this tax year (they'll no doubt assume the interest will continue at this level). It will be interesting to see whether this was a one-off for this tax year, or they are comfortable letting those earning >£10k interest pay the tax through PAYE on an ongoing basis.

Will do. I don't even mind completing it but the whole payment on account thing scared me off.

It's a bit annoying to have to pay an instalment in advance, but you may find what they do to your tax code collects an assumed amount of tax for 2025/26 in advance.

Albermarle said:

masonic said:

Please do come back and update us if HMRC ask you to enrol for SA after the end of this tax year (they'll no doubt assume the interest will continue at this level). It will be interesting to see whether this was a one-off for this tax year, or they are comfortable letting those earning >£10k interest pay the tax through PAYE on an ongoing basis.

Was there not a proposal to increase this £10K of interest limit anyway? If so then clearly it is not a big issue for them.

I wasn't aware of there being a proposal, but it seems a sensible move assuming they have sufficient confidence in the information they receive. Having seen many instances of errors/omissions reported here, it still behoves the taxpayer to check the calculation carefully.

I am surprised they continue to ask me to complete one, given I have entered nothing in my last 7 returns that would require me to fill one out. But I am not going to notify them I don't need to fill one out, as I prefer to supply them with the correct information in the first instance (and not have my tax code messed about with).

Yes this happens to me. Is it possible to ask hmrc not to assume and rather pay on receipt of the P800 which arrives later in the year? 

Dazed_and_C0nfused

WindfallWendy said:

Dazed_and_C0nfused said:

JV_21 said:

No. It correctly captured all my income from my job and bank interest

If you choose to now complete a tax return you will have to pay any tax due direct to HMRC long before 6 April 2025.  Paying it via your tax code over the 12 months from 6 April 2025 to 5 April 2026 won't be an option.

Just to clarify - as I was muddled for a moment - it is the act of completing a tax return which makes the tax payable sooner rather than later. And therefore if HMRC say they will use PAYE to claim the tax owed, then that is better so don't do a tax return. Yes?

Basically yes.  There is a hard deadline for Self Assessment liabilities to be included in the tax code of a future tax year.  And for 2023-24 that is that the return must have been filed by 30 December 2024.

So if the op chooses to go down the Self Assessment route for 2023-24 then the PAYE calculation will have to be cancelled and any liability for for 2023-24 will be established from the tax return. 

Which won't have been submitted by the deadline of 30 December 2024 so any tax would be payable by 31 January 2025.  Or possibly 3 months from when the return or notice to file a return was issued.  But either way it's much sooner than being spread out over the whole of the 2025-26 tax year.

Dazed_and_C0nfused

WindfallWendy said:

And also, my plan for earning >£1000 interest which I will have to declare on my SA tax return next year (due to some rental income I received, which has now stopped, which I've told HMRC about, so I'm hoping I won't have to do SA for 25/26) is to make an overpayment on my pension in March which will counter any tax owed and means they owe ME money (which worked for 23/24). 

Point of issue though.... if I earn £1200 interest in 24/25, but no longer have rental income, I will still have to tell HMRC about it, won't I? And then pay tax on £200? 

A tax return is for you to declare all taxable income.  You would never declare interest >£1000, you declare all your taxable income and HMRC then calculate the tax due on that income.

Some of it might be covered by some of your Personal Allowance or taxed at 0% but that doesn't make any difference whatsoever to what you need to declare.

If a tax return is required and you have received £1,200 in taxable interest then you have to declare £1,200.