Do I have to PAYE or can I self-assess?

Tigsteroonie

I'm employed, full-time, by a government department and therefore I'm PAYE with the standard tax code.

Does anybody know if it is (theoretically) possible to register with the Tax Office to be responsible for my own tax, rather than being PAYE? (Other countries work this way.) I'm thinking I'd need a different tax code to give to my employer.

I could then put the appropriate amount of money away each month and I would earn the interest, before self-assessing and paying after the end of each tax year.

..... reading that back to myself, I'm assuming that I cannot do this because otherwise everybody would be doing it! Does anybody have any thoughts?

rose28454

Tigsteroonie wrote: »

I'm employed, full-time, by a government department and therefore I'm PAYE with the standard tax code.

Does anybody know if it is (theoretically) possible to register with the Tax Office to be responsible for my own tax, rather than being PAYE? (Other countries work this way.) I'm thinking I'd need a different tax code to give to my employer.

I could then put the appropriate amount of money away each month and I would earn the interest, before self-assessing and paying after the end of each tax year.

..... reading that back to myself, I'm assuming that I cannot do this because otherwise everybody would be doing it! Does anybody have any thoughts?

I am self employed and you actually have to pay in advance as they calculate what you pay from your previous tax bill. You have to pay in january and june each year. i dont think your employers would allow it anyway

BoGoF

You answered your question, you cannot do this. Being PAYE is not a matter of choice.

Tigsteroonie

As I figured. Otherwise Martin would be recommending that we all do this!

Oh well, was a nice idea for the few minutes that it lasted. Thanks.

Cook_County

It is not however a totally stupid question.

Let's imagine you earn £50,000 a year.

You tell HMRC that you intend to pay £50,000 into a pension plan, they adjust your Code and your monthly pay goes up for the rest of the year.

You also claim tax credits immediately.

After the end of the year you have paid no pension contributions so you have to pay back tax & tax credits after you file your returns.

In between, you have had more money interest free from the government on which you could have earned some interest ...

Mikeyorks

rose28454 wrote: »

I am self employed and you actually have to pay in advance

You have to make 'payments on account' of your next liability if it exceeds £500 (£1000 from 09-10). And whilst that is in advance of your next liability .... it's certainly not in advance of the earnings you're being taxed on.

Debt_Free_Chick

Mikeyorks wrote: »

You have to make 'payments on account' of your next liability if it exceeds £500 (£1000 from 09-10). And whilst that is in advance of your next liability .... it's certainly not in advance of the earnings you're being taxed on.

Agreed .... and

In a way, it's not a lot different to PAYE

Assuming this year's tax bill is the same as last year, then half of it is paid half-way through the year.

That rather sounds like "pay as you earn" to me

Debt_Free_Chick

Tigsteroonie wrote: »

..... reading that back to myself, I'm assuming that I cannot do this because otherwise everybody would be doing it! Does anybody have any thoughts?

Just to confirm, not only do you not have a choice, your employer doesn't either. Your employer is obliged to deduct tax (& NI) under PAYE as you are employed by them.