Self assesment question

[speed_nut_yn]

Ever since I started working fulltime, I have been asked to complete a self assesment by HMRC. Should I have to do this even though I am PAYE and have never been self employed. None of my colleagues complete a self assesment, so I am wondering if the HMRC have something incorrect on their records? Is there any way of getting out of doing a self assesment as I am PAYE?

Thanks

[to3m]

It's not quite clear but is this the first one you've been sent? Perhaps it's a strange view, but I'd argue that you might as well fill it out. It doesn't take long to fill out online if your affairs are simple, though it IS rather boring, and there's a certain amount of officialese to decode.

My thinking is that there's always a chance that your employer has got something wrong, and this way you'll find out about it sooner rather than later. If there's any extra due, you can pay it straight away rather than have them change your tax code (which, or so I have always been told, has a tendency to be a hassle). And in the rather unlikely (but perfectly possible) event that they owe you money, you get it back pretty quickly...

[Eric Mc]

speed_nut_yn said:

Ever since I started working fulltime, I have been asked to complete a self assesment by HMRC. Should I have to do this even though I am PAYE and have never been self employed. None of my colleagues complete a self assesment, so I am wondering if the HMRC have something incorrect on their records? Is there any way of getting out of doing a self assesment as I am PAYE?

Thanks

Once you have been asked to complete it you MUST complete it. There is no get out. If you don't complete it and get it to them by 31 January you will be fined.

Self assessment is not just limited to those who are self employed. The following people also might need to fill in self assessment tax returns -

people who own a rental property

higher rate taxpayers with additional income outside of the PAYE system - such as dividend income or interest on bank and building society accounts

people with overseas income

people who have had a capital disposal during the year that may be subject to capital gains tax

higher rate taxpayers who pay into personal pension schemes or have allowances that can be relieved at the higher rates for which they must make a separate claim

people with trust income

[speed_nut_yn]

Thanks for the responses guys.. I have completed this years but as I don't fall into any of the categorys Eric has mentioned.. i.e my only income is from PAYE, i just wanted to see if i had any grounds for asking them not to send me one next year..

[Eric Mc]

speed_nut_yn said:

Thanks for the responses guys.. I have completed this years but as I don't fall into any of the categorys Eric has mentioned.. i.e my only income is from PAYE, i just wanted to see if i had any grounds for asking them not to send me one next year..

If you don't earn enough to pay tax at the higer rates, then you probably don't ned tio complete s return.

When you had finished completing the return, did you owe any additional tax or were you due a refund?

[DayTrader]

Eric Mc said:

Once you have been asked to complete it you MUST complete it. There is no get out. If you don't complete it and get it to them by 31 January you will be fined.

I used to be self employed a couple of years ago then stopped. The year after I was sent one to fill in.

I rang them up - explained I was paid through PAYE and had no other income at the time to declare and they told me I didn't need to complete it and they would stop sending me them unless I requested it in the future.

Edited by DayTrader on Sunday 15th January 07:38

Edited by DayTrader on Sunday 15th January 07:38

[Eric Mc]

DayTrader said:

Eric Mc said:

Once you have been asked to complete it you MUST complete it. There is no get out. If you don't complete it and get it to them by 31 January you will be fined.

I used to be self employed a couple of years ago then stopped. The year after I was sent one to fill in.

I rang them up - explained I was paid through PAYE and had no other income at the time to declare and they told me I didn't need to complete it and they would stop sending me them unless I requested it in the future.

Edited by DayTrader on Sunday 15th January 07:38

Edited by DayTrader on Sunday 15th January 07:38

Good for you. You were lucky. The easiest way to ensure you don't get fined is to fill it in and send it back. If your tax affairs are simple (which is the main reason people assume they shouldn't have to fill one in) then filling it in and sending it back should be quite easy.

The main complication is, if filing electronically, making sure you have the authorisattions set up so you can submit it. If you are setting this up now you are rapidly running out of time. Even though the deadline is over two weeks away, getting the on-line authorisation codes can take at least 7 days from requesting the code. That will seriously eat into the remaining time before the filing deadline.

An alternative would be to ask someone with an agent's authorisation code (such as an accountant or a tax adviser) to file it on your behalf.

[sumo69]

The authorisation codes are meant to arrive in 5 -7 working days - I requested one for a new client on 21 December and it arrived on Thursday 12 January so excluding the bank holidays that was 14 days!

Moral - if you need one don't wait any longer unless you want to hand HMRC an extra £100 of your hard earned!

D

[Eric Mc]

Agents don't normally need separate authorisation codes for each and every client. I have an agent's code which I can use when submitting any client's return. All I need is a valid Unique Tax Reference (UTR)for each client.

[PH5121]

I was wondering about the same question. I am employed, pay tax PAYE, have no other source of income (bar £7 interest on an old savings account), am a lower rate tax payer and had to complete a self assessment (the company I work for accountant / auditor did it on my behalf).

They calculated I owed nearly £500 in tax, I do not understand why as a PAYE tax payer I could have underpaid, but they said pay it so I did.

For future reference could anyone (Eric?) cast light on why I have to do a self assessment and how come I have underpaid tax?

[Eric Mc]

Check your PAYE codings for tax years 2010/11 and 2011/12.

The key to ensuring the PAYE deducted on your salary is correct is to make sure that the tax coding being operated by your employer is also correct.

Never assume that the tax deducted under PAYE is correct.