Confused about Self Assessment 2024-2025

Mum161111

When my pension arrived in my bank it was about £8 short. Unknown to me my tax code had changed after I received  my January pension payment.

I thought, at last, I understood about self assessment but now I am confused.

With help from HMRC I completed the self assessment form for 2023 to 2024 and paid the amount owed by telephone.  I thought (wrongly) I would do the same again after April and pay what tax I owe - I had said I would prefer my PAYE tax code not to change and preferred to pay untaxed interest/income separately, as I did for 2023-2024.

Now I am on a Month 1 code from January and have an estimated amount of unpaid tax.  I dread having to 'phone HMRC because of the long waiting times and another long wait to get through to another Department.

Is this (the estimate) going to take £8 extra tax from my pension every month now.  I won't  know exactly how much tax I will owe until after 5th April this year.

I hoped my tax code would be unchanged and I would pay the tax I owe from self assessment by telephone as soon as I know how much I owe.

Maybe this is not allowed.  I logged into my Tax Account on line but could not find any link to see exactly what the estimate includes and, if allowed, change it.

If anyone knows where to search for or find this in the Government online tax account it might save me a long wait to get through by telephone.  i really have looked but can't  see where to find it and I find the online tax account links difficult to navigate.

I thought, after HMRC help for 2023 to 2024, it would be the same for 2024-2025.  I'll have to accept the reduced pension amount if that is the system but I am struggling with it. - and the unexpected Month 1 and not knowing how long this will last.

Dazed_and_C0nfused

Why have you completed a tax return for 2023-24? 

Did you tax code change because it included an estimate of some untaxed interest HMRC expect you to receive?

If so why do you think that is wrong?  

Pay as you earn (or receive pension) is how you are meant to pay your tax if at all possible.  Paying via Self Assessment often isn't necessary.

Mum161111

Thanks very much for replying, Dazed_and _COonfused.

I had always paid tax by PAYE but I had untaxed earnings over £1000 from Prolific Surveys in 2023-2024 tax year.

I had to complete a self assessment tax form for the first time.   I completed with help from HMRC and paid the amount I owed as soon as I was told how much I owed - mostly from income untaxed frrom Prolific Studies.

It is estimated for 2024-2025 but I expected to keep the PAYE tax code and, after self assessment form, to be completed after 05 April 2025, pay, as I did in full, tax on untaxed income then.  Maybe I misunderstood.  The Month 1 code, for the first time, is unexpected.

Glad to give any more information if needed and thank you very much for replying.

Dazed_and_C0nfused

Mum161111 said:

Thanks very much for replying, Dazed_and _COonfused.

I had always paid tax by PAYE but I had untaxed earnings over £1000 from Prolific Surveys in 2023-2024 tax year.

I had to complete a self assessment tax form for the first time.   I completed with help from HMRC and paid the amount I owed as soon as I was told how much I owed - mostly from income untaxed frrom Prolific Studies.

It is estimated for 2024-2025 but I expected to keep the PAYE tax code and, after self assessment form, to be completed after 05 April 2025, pay, as I did in full, tax on untaxed income then.  Maybe I misunderstood.  The Month 1 code, for the first time, is unexpected.

Glad to give any more information if needed and thank you very much for replying.

Can you confirm the full details of breakdown of your tax code?

It may be possible to do something about it as you have a valid reason for completing a tax return.

When did you actually file the return and how did you answer the two questions near the end of the return about collection of tax (of they were there)?

Mum161111

I would need to log in to my HMRC tax account but it states my State Pension, my works pension and, for the first time, untaxed income, estimated,of about £460.  

Already, for 2024-2025' I have untaxed earnings of over 1000 from Prolific.  I pay basic rate tax and owe nothing for 2023÷-2024 after PAYE then self assessment  amount of about £150 - paid separately by telephone.

I can log back into my tax account but I could not see details of the (about)

£460, how to change it, if it is from Prolifiv income.

I don't  understand about £8 extra tax this month (Month 1) or how long this Month 1 will last.  if it is until 05 April 2025 I don't think it will be enough tax.  I struggle to navigate through the tax account on line and, several times, was too slow and was logged out.

Thank you, again, for replying.

Dazed_and_C0nfused

This is the route you need to take, assuming you are using a browser, not the HMRC app.

Select the Pay As You Earn tile/button

Select Check current tax year

Select What makes up your tax-free amount (on the right of the screen)

You should now be on a screen which is titled Understand your tax-free amount for 6 April 2024 to 5 April 2025.

That is the page that details the breakdown of your tax code.

Mum161111

Will log in and do that now, thank you.

Mum161111

I hope this makes sense.  

Filed (with help from HMRC) Self Assessment 0n 31 December 2024.  Was advised owed tax (in addition to PAYE already paid) for 2023-2024 £214.58 in January and paid this by telephone on 13 January 2025.  Nothhing more to pay for 2023-2024.

Tax Code from 27 January SK83X For Pensions (includes State Pension amount) and separate personal pension code SBR.  From 06 April 2024 it was SK34.

Tax free is -£841.  Income Tax £1412.

Estimated PAYE.  The coloured oblong bar says no tax on £13570, Do pay tax on £7180 and Income tax estimate £1412.

I have papers all over the floor and it is quite stressful.

If, as I think, the estimated tax is not enough, I can't  see how to change it.

I also cannot see anywhere about the "M1" or how long it lasts.

Thank you very much Dazed_and_COnfused.

I now wonder if I will still have to complete a self assessment form for 2024-2025 after 05 April this year.

I know I have to deal with this but I am not finding it easy.  It is very good of you to help.  I have been logged out of my Tax Account again.

Dazed_and_C0nfused

Mum161111 said:

I hope this makes sense.  

Filed (with help from HMRC) Self Assessment 0n 31 December 2024.  Was advised owed tax (in addition to PAYE already paid) for 2023-2024 £214.58 in January and paid this by telephone on 13 January 2025.  Nothhing more to pay for 2023-2024.

Tax Code from 27 January SK83X For Pensions (includes State Pension amount) and separate personal pension code SBR.  From 06 April 2024 it was SK34.

Tax free is -£841.  Income Tax £1412.

Estimated PAYE.  The coloured oblong bar says no tax on £13570, Do pay tax on £7180 and Income tax estimate £1412.

I have papers all over the floor and it is quite stressful.

If, as I think, the estimated tax is not enough, I can't  see how to change it.

I also cannot see anywhere about the "M1" or how long it lasts.

Thank you very much Dazed_and_COnfused.

I now wonder if I will still have to complete a self assessment form for 2024-2025 after 05 April this year.

I know I have to deal with this but I am not finding it easy.  It is very good of you to help.  I have been logged out of my Tax Account again.

Do you have a friend or relative who could help you? 

For some reason you seem to have ignored the page I suggested you look at and it's that had the details of exactly how the SK83 tax code has been arrived at.

The "X" is a different way of explaining the tax code was issued on Month 1 basis.  That is actually intended to protect you and stop a lot of tax being deducted all in one month.

The details here are what is most important.

Select What makes up your tax-free amount (on the right of the screen)

You should now be on a screen which is titled Understand your tax-free amount for 6 April 2024 to 5 April 2025.

If you had your survey income in 2024-25 then yes, I think you should expect to need to file a tax return again for 2024-25.

Mum161111

I apologize, Dazed_and_COnfused.  I  thought I had followed your instructions. 

(Select the Pay As You Earn tile/button

Select Check current tax year

Select What makes up your tax-free amount (on the right of the screen)

You should now be on a screen which is titled Understand your tax-free amount for 6 April 2024 to 5 April 2025.

That is the page that details the breakdown of your tax code.)

I really have been up all night trying to work through and understand this.  Your help is very much appreciated.

I don't have anyone to help although HMRC were great at helping me with the Self Assessment Form for 2023 to 2024.  I thought I understood it now but I am miles out.

I'll have a bit of a break and come back and will follow your instructions.  I did not intentionally ignore the page you suggested - I thought I was on the correct part.  I should have known because I clicked on one part and was taken to a list of how the Government spends the tax.

I'll post back later. 

Thank you for your much appreciated help.

Mum161111

Thank you very much for all your time and help given,Dazed_and_COnfused.  *This seems to be such a coincidence:

* I had just 're'- followed your instructions after logging in to HMRC again, and ticked your instructions off, one at a time, to ensure that I missed nothing this time.  It helped a lot.  Hardly believable but just half an hour ago my post came and included two letters:  

One was a three full page letter from Inland Revenue fully explaining the tax code change and giving reasons.  It was dated 27 January 2025.

The other letter was a single page (undated) from my Pension Provider advising me of the change in my tax code and telling me what my future gross and net monthly payments would be from 09 February 2025.

If the letters had come before my 'reduced' pension payment I would not have been so stressed.  I really appreciated all your help, thank you.