/ First time Self Assessment woes
So I filled it out online and because I am a very simple case (one income, no second homes etc) it was relatively simple.
Then at the end it tells me I owe £3k! FCK, why's that? So I call them up, 30 mins on hold..eventually it seems my tax code is wrong. How can that be? HMRC provide it to my employer. So I tell them my new tax code for this year (2012/13) and they say that is wrong as well!
I am now speaking to payroll at my firm to try and understand how this system works and how my tax code could be consistently wrong for the last two years.
Now, I don't expect to be able to wiggle out of this, but has anyone had similar experience and do they have any advice?
As a company car driver I have been hit by the fact that my company has not advised the revenue that i have changed my car and in one year they didnt advise the revenue that i had a car at all. £ks to pay the following year.
You have two options, pay it in one or have it spread across the next financial year. Im not sure if you can spread the underpayment over more than one year.
Why, if you have one income, have you ended up with a tax return? You shouldn't need one.
Was it a random check, or did they suspect something was wrong and want evidence to correct it? Do you for instance have large savings?
It's just galling because through no fault of my own I suddenly have to hand £3k over. And it seems all throughout 2012 my tax code was wrong. So will expect the same next year (although at least it wont come as a shock)
Do you have a single income, the full tax allowance, little or no savings, no company car etc?
If so this is completely bizarre.
FWIW the basic allowance is £8105 in 2012 which, if your circumstances are simple, most probably makes your tax code 810L for this year. If it's anything other than that and there's not something you've forgotten, that does sound odd. If it is that, I would check carefully on what basis there's a problem.
(Unless you earn over £100K, in which case you lose the allowance, I believe).
HMRC always balls up my Tax Code.... and they never seem to learn.
From the sounds of your circumstances, if you're a normal employee of a company...on a 'normal salary'...paid through PAYE...then you shouldn't have to be doing your own tax return.
Before you filled it out online...you should have called them up to ask why you need to do it.
Payroll told me that they send the n rated p60 to HMRC annually and HMRC assess and send a P9 notice back advising of tax code for the coming year.
So for some reason HMRC decided to put me on a more favourable tax code for 2011/12. Obviously a mistake. Having spoken to them I am now on K160 tax code which means I get zero personal allowance.
The only benefits I get is private health cover contributions fyi, nothing else.
Ok, i'm now going to go on hold for an age to ask some questions on why they got this wrong. What a great tuesday morning I am having ;-)
Ah OK, that is I guess the complication. Good luck!
hello, sorry for the hijack but please can you mail me through the forum? Your profile says I can't mail you... thanks!
Do you have no bank/building soc interest at all?
If you do, you would also have a higher rate liability on that (which may be coming into the calculation) and which wouldn't be on your coding unless you specifically ask it to be. The bank only deducts basic rate tax at source and you seem to be indicating you are a higher rate taxpayer.
Ah simple then. Tax allowance for this year is £8105...40% tax bracket.... just over £3k.
Nothing you can do about it I'm afraid, unless you can argue that its their mistake and you don't have the money to pay a £3k bill.
Where it gets more complicated (but they do send self assesments automatically as soonas they realise you are in this bracket) is that if you earn over £100k they need to reduce your tax free allowance by £1 for each £2 over £100,000 you earn until you have a zero tax free allowance. If you then need taxed a bit more on other stuff (work related perks, interest,dividends etc) you end up with a negative tax code.
If your income varies a bit (say a salary just under 100k and a bonus that might be 10 to 20k ish) their 'estimate' of your annual income may well be incorrect. If you are likely to fall into an annual income of between 100 and about 117k (i.e. 100k plus 2 times the standard tax free allowance) you need to keep a close eye on things and make sure their estimate is as accurate as it can be and be aware that if your income moves up or down (i.e. a good or bad bonus year) you will have over or under paid tax within that tax year.
I realise thats no help now (and I have also had the 'you need to pay up in about 2 weeks' situation in the past) but it has made more recent years easier and more accurate.
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