Self assessment question

[theboyfold]

For some reason I've been lumped with a £700 tax bill this year even though I'm just PAYE. I've not been able to get through to the Hmrc. So if I submit and pay the bill, can I query it later?

[theboyfold]

t400ble said:

Sure its genine?

What do you mean?

[theboyfold]

Yes, it's genuine. It's through the government gateway. Done self assessment for many years. Normally it's tens of pounds either way

[theboyfold]

Sheepshanks said:

Do you know why you're on self-assessment?

Did some freelance work back in 2009. Had to do them ever since.

Eric Mc said:

PAYE does not and cannot always calculate your tax liability correctly during the tax year. As a result, some people find that the PAYE collected through their salary is either higher than their true tax liability or lower. This can happen for all sorts of reasons -

they have a complicated tax Benefit in Kind
they have complicated issues surrounding pension contributions
they pay tax at the higher rates (40% or 45%)
HMRC just got it wrong (not unheard of).

The secret with PAYE working correctly DURING the tax year is checking that the PAYE Coding is correct and, if it is not, contacting HMRC during the tax year to notify them that the coding is not correct.

HMRC assumes that every PAYE employee has a good working knowledge of the PAYE coding system and is fully switched on in their reviewing and monitoring of their PAYE codes.

Of course, the reality is much different.

Is their any specific aspect of your financial affairs that would make it likely that your PAYE coding is struggling to match reality?

I don't have, and certainly during that tax year anything complicated. The years before I had some contributions to my pension, but nothing during the year in question. Very simple P11D as well.

The code about matches reality, I think. It's fairly normal.

However, in light of the date, can I submit and pay now and take it up with them later if I can't get through on the phone? Or is it like a parking ticket where by as when you pay, you lose any right to appeal?

As for my tax code this month, God knows what's going on, but that's a whole other thread...

[theboyfold]

Eric Mc said:

Well if your PAYE affairs really are straightforward and the PAYE Coding was correct, the only thing that must be creating your Self Assessment liability has to be, by default, your self employed profits.

Are they higher than last year by any chance?

Did they pitch you into the higher rate brackets when in previous years they didn't?

Have you factored in the Class 2 and Class 4 NI aspects of the self assessment liability?

Was there any issue with Child Benefit?

I don't have any self employed profits, that's the thing. I haven't for 7 years. The only wrinkle was for a couple of years I topped up my pension after being paid, so I could claim back a percentage of that. Haven't done that for a couple of years though. So it's just salary and medical coverage provided from the company.

Can you have a look at my original question please, can I pay now and dispute when they can pick up the phone after the deadline?

No issue with client benefits

Edited by theboyfold on Monday 29th January 10:04

[theboyfold]

trickywoo said:

If you end up paying too much tax you can claim it back.

Without being patronising have you put everything in the correct boxes on the self assessment? Seems strange if your PAYE details match what you've put in the self assessment for HMRC to be asking for another £700. Normally they would have done their best to collect it via PAYE through the year.

Yep. Literally just my P60 and P11D details plus personal account interest, which is already dealt with at source. These were already in the form so I didn't even have to enter that.

I think I will try and call them again tonight(!) and tomorrow, and if I can't get through just get it back later. Hopefully

Thanks

[theboyfold]

essayer said:

Without being patronising, HMRC won’t believe they’ve made any mistake. The onus is on you to declare and pay the tax correctly, and your P60 should tie up with the tax paid, tax code and salary. Does it?

Is the issue that you have apparently underpaid tax for the year by £700, or that you have additional income/information on your tax return that causes £700 additional to be payable?

The issue is that they claim I have underpaid by £700. I have no additional income.

[theboyfold]

williaa68 said:

You mention personal account interest "which is dealt with at source". It isnt necessarily any more if you are a higher rate tax payer (or a basic rate tax payer with a lot of interest) - any chance this is it?

Nope. Certainly not to the extent that HMRC are talking about

[theboyfold]

droopsnoot said:

Would I be correct in saying that the liability may not have occurred during the tax year you're doing the return for, it might be historic? In much the same way as if you pay this and it subsequently turns out that you've overpaid, and it would be corrected the other way.

I don't think so. I've done Self Assessment for at least the last 7 or 8 years, so I assume that everything is settled in the previous years

[theboyfold]

1012LM1

[theboyfold]

OneTwo said:

If you're earning over £50k could it be payback of some of your Child Benefit receipts?

I doubt it, we didn't claim anything after the rules were changed.

[theboyfold]

essayer said:

That M1 suffix will be something to do with it, I reckon, but thought it means you generally overpay not underpay.

Yeah, I'm not sure why I have the M1 on that

[theboyfold]

Eric Mc said:

The only way anybody can really check why you need to pay £700 is for you to set out all your income and BIK figures - but you probably don't want to do that.

No I don't, and that wasn't the intention of the thread to be honest. I just wanted to understand that if I submitted and paid that I'm not totally tied to that payment as I've not been able to get through to HMRC yet.

[theboyfold]

arguti said:

Eric Mc said:

It's actually called SELF assessment for a reason.

YOU have calculated the liability, not HMRC.

You are supposed to pay the liability you have calculated by the due date, which is 31 January.

If you chose not to because you aren't happy, HMRC will charge interest on the overdue amount. If the overdue amount remains unpaid at 28 February, they will add on a 5% surcharge - plus ongoing interest.

The SAFE course of action is to pay the £700 now. If it turns out it was too much, HMRC will refund it to you, with interest.

This is the best advice..

Even if you have overpaid, it will take weeks for HMRC to address the issue and apart from short term cash issues, there is no downside.

Exactly my thoughts which is what I wanted to confirm. I'll try today and tomorrow to speak to them, failing that I'll pay up and deal with it another day when it's calmed down a bit

[theboyfold]

To round this one off, managed to speak to HMRC tonight. They explained that because I had claimed for personal pension contributions in the previous return, they had assumed that I was doing that again this year. So they had built that into my code. They have now removed it for this year, and it should be ok by the end of the year.

Next time I'll make sure I do my return earlier to clear anything like this up.

[theboyfold]

plasticpig said:

Or even better ensure you have the right tax code in the first place. You can ring HMRC up and get your tax code changed if you believe it is wrong.

Yeah, I didn't believe it was wrong though, I don't know how my pension contributions are shown in my code. Anyway. What's done is now done and I'll be ok for this year.