Your browser isn't supported
It looks like you're using an old web browser. To get the most out of the site and to ensure guides display correctly, we suggest upgrading your browser now. Download the latest:

Welcome to the MSE Forums

We're home to a fantastic community of MoneySavers but anyone can post. Please exercise caution & report spam, illegal, offensive or libellous posts/messages: click "report" or email forumteam@.

Search
  • FIRST POST
    • Arfa__
    • By Arfa__ 8th Jan 18, 9:51 PM
    • 452Posts
    • 1,455Thanks
    Arfa__
    Paying self !!! tax via PAYE tax code, spread over 12 months? - not!
    • #1
    • 8th Jan 18, 9:51 PM
    Paying self !!! tax via PAYE tax code, spread over 12 months? - not! 8th Jan 18 at 9:51 PM
    I have a primary income with my employer, from which I'm paying higher rate 40% tax and class 2 NI. I'm also hit by the (somewhat unfair) child benefit cap, so have todo a self assessment return to pay most of it back. I also earn a small amount (<£1-3k) in a self employed business, which I declare through my self assessment.

    This self assessment I submitted before the 30th Dec deadline at opted to my pay £1200 tax bill via PAYE through my primary employment pay slip. I was under the impression this would spread the bill evenly over a 12 month period. However just got my latest payslip to find I've been stung for £900 extra tax deduction than normal!

    Am I missing something obvious here? When paying via PAYE, is it not spread over 12 months? This gov page suggests it should be: https://www.gov.uk/pay-self-assessment-tax-bill/through-your-tax-code
    Is it something daft like spread over the 12 months April-April, and now I'm playing catch up for submitting my return in December?
Page 1
    • agrinnall
    • By agrinnall 8th Jan 18, 10:17 PM
    • 20,326 Posts
    • 16,083 Thanks
    agrinnall
    • #2
    • 8th Jan 18, 10:17 PM
    • #2
    • 8th Jan 18, 10:17 PM
    It doesn't seem right to me, and I thought it was collected in next year's tax code, so I wonder if they have by mistake reissued this year's tax code rather than wait to issue one for next year. I'd ring them up to find out, and hopefully they'll issue another code which will return the £900 in next month's pay.
    • 00ec25
    • By 00ec25 8th Jan 18, 10:23 PM
    • 6,509 Posts
    • 6,062 Thanks
    00ec25
    • #3
    • 8th Jan 18, 10:23 PM
    • #3
    • 8th Jan 18, 10:23 PM
    I have a primary income with my employer, from which I'm paying higher rate 40% tax and class 2 NI. I'm also hit by the (somewhat unfair) child benefit cap, so have todo a self assessment return to pay most of it back. I also earn a small amount (<£1-3k) in a self employed business, which I declare through my self assessment.
    Originally posted by Arfa__
    that is not correct, why are you not claiming the small profits exemption from Class 2 given you (apparently) pay significant amounts of Class 1 on your employment income since you state you are HR tax on that?
    • madgagoo
    • By madgagoo 9th Jan 18, 7:14 AM
    • 347 Posts
    • 175 Thanks
    madgagoo
    • #4
    • 9th Jan 18, 7:14 AM
    • #4
    • 9th Jan 18, 7:14 AM
    I expect what has happened is HMRC have made an in year adjustment to your PAYE code to collect estimated self employment & child benefit related tax for 2017/18 (i.e. the current tax year). This is relatively new and is aimed to ensure you have no tax liability for 2017/18 when you come to submit your tax return. You!!!8217;ll need to check your PAYE coding notice to be certain though.

    This adjustment is, as far as I can see, optional and therefore you have two options:

    1. Ring HMRC (just before 8am seems to be best) and ask (demand) that they remove the estimated underpayment. You should then get the £900 back through your next pay run. You then submit your tax return and pay through 2019/20!!!8217;s PAYE code.
    2. If you can afford it, leave things as they are and you should only have a small amount of tax to pay through your 2017/18 tax return (or possibly a repayment)..

    The £1,200 for 2016/17 should be collected in 2018/19 as you expect.
    • xylophone
    • By xylophone 9th Jan 18, 8:07 AM
    • 25,574 Posts
    • 15,103 Thanks
    xylophone
    • #5
    • 9th Jan 18, 8:07 AM
    • #5
    • 9th Jan 18, 8:07 AM
    Had you considered making pension contributions to restore the right to CB?

    https://www.unbiased.co.uk/news/tax/how-to-avoid-the-child-benefit-tax-charge
    • Arfa__
    • By Arfa__ 9th Jan 18, 3:32 PM
    • 452 Posts
    • 1,455 Thanks
    Arfa__
    • #6
    • 9th Jan 18, 3:32 PM
    • #6
    • 9th Jan 18, 3:32 PM
    that is not correct, why are you not claiming the small profits exemption from Class 2 given you (apparently) pay significant amounts of Class 1 on your employment income since you state you are HR tax on that?
    Originally posted by 00ec25
    Ah yes, I see, the class 2 NI bill is on my self employed income. As profits from this are below £6,025 I presume I can get exception on this? How do I go about this? Call to HMRC?
    As yeah, I'm paying plenty enough class 1 NI on my primary income.
    • Arfa__
    • By Arfa__ 9th Jan 18, 3:38 PM
    • 452 Posts
    • 1,455 Thanks
    Arfa__
    • #7
    • 9th Jan 18, 3:38 PM
    • #7
    • 9th Jan 18, 3:38 PM
    I expect what has happened is HMRC have made an in year adjustment to your PAYE code to collect estimated self employment & child benefit related tax for 2017/18 (i.e. the current tax year). This is relatively new and is aimed to ensure you have no tax liability for 2017/18 when you come to submit your tax return. Youíll need to check your PAYE coding notice to be certain though.

    This adjustment is, as far as I can see, optional and therefore you have two options:

    1. Ring HMRC (just before 8am seems to be best) and ask (demand) that they remove the estimated underpayment. You should then get the £900 back through your next pay run. You then submit your tax return and pay through 2019/20ís PAYE code.
    2. If you can afford it, leave things as they are and you should only have a small amount of tax to pay through your 2017/18 tax return (or possibly a repayment)..

    The £1,200 for 2016/17 should be collected in 2018/19 as you expect.
    Originally posted by madgagoo
    I think you've hit the nail on the head here. I do recall ticking a box on the tax return to do this. I just didn't predict they'd take it as a huge chunk just like that! I had assumed this chunk related to 2016/17 tax bill you see.

    So I'm basically paying back now for my estimated 2017/18 child benefit and I will pay over 2018/19 what I owed for 2016/17. Bit of an expected PITA, but I guess it avoids the same bill next January.
    • sheramber
    • By sheramber 9th Jan 18, 7:31 PM
    • 4,782 Posts
    • 3,576 Thanks
    sheramber
    • #8
    • 9th Jan 18, 7:31 PM
    • #8
    • 9th Jan 18, 7:31 PM
    Ah yes, I see, the class 2 NI bill is on my self employed income. As profits from this are below £6,025 I presume I can get exception on this? How do I go about this? Call to HMRC?
    As yeah, I'm paying plenty enough class 1 NI on my primary income.
    Originally posted by Arfa__
    The NIC limit for 2016/17 is £5965. Exemption for earnings below that amount is automatically given in the SA return. You no longer to claim exemption separately.
Welcome to our new Forum!

Our aim is to save you money quickly and easily. We hope you like it!

Forum Team Contact us

Live Stats

173Posts Today

1,538Users online

Martin's Twitter