Tax Refunds and Payments
Tax refunded or reallocated by HMRC
Underpaid tax:
Would you prefer HMRC not to collect tax due through your PAYE tax code? Yes/No
2. Would you prefer HMRC not to collect tax due through your PAYE tax code? Yes/No
3. You can pay any amount owing direct to HMRC via your 2014/15 Self Assessment. Would you prefer to pay directly through Self Assessment? Yes/No
What is your basic recommendation for these options on the SE online filing if the turnover for the start-up tax year is below the personal allowance?
Note: In this SE the tax owed is likely to be below £3,000.
[If selecting Yes for the top question above then questions 2 and 3 are disabled.]
Replies (9)
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Eh?
If "SE" stands for self-employed, the option to have tax collected through the PAYE code is ineffective unless the taxpayer has an employment as well as a self-employment.
Generally, I would tick the boxes because it makes tax returns for subsequent years more complicated if tax is being collected through a PAYE code.
As you are continuing to ask your question your client presumably has an employment as well as being self employed.
This is not about paying more or less in tax. This is about how the tax due is paid. I share Euan's preference for clients paying through self assessment rather than through PAYE, where the option is available.
Yes. But even if you didn't agree your strictly self employed client does not have the option of underpayments being collected through their PAYE code - because they don't have one.
Client?
You say you are completing a return on behalf of a client but you don't seem to have a grasp of the basic principles of PAYE coding and how it relates to SA, Frankly, if you need to ask whether coding out under PAYE is an option for somebody who has no employment income you really should not be dealing with other people's tax affairs. At least, that's how it appears from reading your question. What other basic errors are you making? (Rhetorical).
Apologies
Dear James,
You got this wrong. I have never said this is for a client.
My apologies. Somebody mentioned client on an earlier answer and you mentioned accounting software, so I jumped to the wrong conclusion! Mea culpa.
Hopefully your questions have been answered: you will need to pay the tax assessed by Jan 31st. You may also have to make payments on account for next year, though on the levels of income you are indicating then this may not be applicable: if you are using the HMRC software then it will show you the amounts due.