Is tax deducted via PAYE when put on self assessment?

thor

If you are put on self assessment how does that work with P.A.Y.E.? Will you continue to have tax taken from your salary as calculated by HMRC using your full personal allowance and then this figure is deducted from whatever your final tax bill is after you finish your self assessment?

E.G. At the end of a financial year tax deducted via PAYE is £5000.

Total tax liability calculated from self assessment is £7000.

So tax bill owed = £7000 -£5000 = £2000

OR is nothing taken from your wage and taking the example above, the final tax bill owed is £7000?

itsthelittlethings

You stay on PAYE for PAYE jobs. When you say "put on self assessment" what do you mean. If you have some self assessment income your PAYE income stays PAYE. If your PAYE job switches you to being freelance, no they wouldn't deduct tax (but I'm not sure they're allowed to do that).

Grumpy_chap

https://forums.moneysavingexpert.com/discussion/6666766/is-tax-deducted-via-paye-when-put-on-self-assessment

Yes, you will stay on PAYE and settle the balance after the SA return has been submitted (by end January).

In addition, you will make payments on account in January and July.

Using the figures in your example with first SA for 2026-27, the SA has to be submitted by end January 2028. Total tax liability £7k but £5k already collected via PAYE so the balance of £2k to be paid by end January 2028.

Payment on account will also be required for 2027-28 tax year, so £1k by end January 2028 and £1k by end July 2028. The payments on account will be deducted from the final balance payment when the 2027-28 SA return is submitted.

Even with the payments on account, SA payments are later than would be the case on PAYE.

How do you generate the non-PAYE income? Will you need to prepare for Making Tax Digital? (MTD is the HMRC method for collecting tax sooner, improving Government cashflow.)

Ayr_Rage

Tax on salary will still be via PAYE.

Depending on how much you owe, there are several ways you may or be required to pay the tax.

Payments on account ARE NOT always required, you'll find out once you submit your return.

Just one balancing payment at the end of January could be an option as is having the tax recovered by HMRC revising your tax code, that will obviously affect your take home pay.

There is a tick box on the SA return to opt out of recovery via your tax code.

LITRG

Hi OP. You may find the self assessment tax payments of our website helpful. See

Self assessment tax payments | Low Incomes Tax Reform Group

Tax is deducted at source on employment income under PAYE, but this income (and tax paid) still needs to be included on the annual self assessment tax return. Any tax paid under PAYE is taken into account in determining what further tax is due under the self assessment system. Hope this helps.