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Help needed - tax self assessment

(21 Posts)
nada29 Sun 25-Jan-15 20:52:06

I submitted my tax return a few days ago for the first time. It did say at the end an amount that is "payable to me" . Anyway, I logged in today only to see At glance section: You have nothing to pay. Underneath it says: You have a total amount of 8K becoming due to payment. I'm completely confused now. There is a breakdown of charges for tax yearn ending 5/4/15 that should be paid by 31/01/15 and second payment for the same year is payable by 31/7/15. At the end it says balancing payment for tax year ending 5/4/14. What does all this mean? Please if any one can explain, I would be grateful, can't get my head around all this.
I thought there is nothing to be paid.. sad

nannynick Sun 25-Jan-15 21:06:08

Sounds like it may be Payments on Account.

nannynick Sun 25-Jan-15 21:12:32

This looks an interesting read.
I've not yet come across payment on account as I don't earn that much as self employed, over 80% of the tax I pay is done via PAYE. So think that is why I don't have to pay-on-account.

Is all your income via self employment or is some also via PAYE?

NoSquirrels Sun 25-Jan-15 21:20:03

If your tax to pay in a year is over £1,500, HMRC starts to take 'payments on account' for the next tax year (i.e. payments in advance). These are due in January and in July.

My return says:

Total amount due for 2013-14 £XXXX
First payment on account for 2014-15 £XXX

Total to be added to Self Assessment account due by 31 January 2015 £XXXX

The 'total' number is the first 2 numbers added together.
Does yours look like this?

piggychops Sun 25-Jan-15 21:23:31

Usually what happens it that you pay the tax you owe on 31/01. They then use this figure as a rough estimate of what you are likely to owe in the next tax year i.e. the one we are in now, and they divide that into 2 chunks. One is due on 31/01 and the other in July.
There is an option to reduce it manually on your tax return and a box to explain why you want to do that e.g. if you don't think you are earning as much for example. You can make amendments up to 72 hours after your return is filed.
I'm not a tax expert- this is just from my own observations

NoSquirrels Sun 25-Jan-15 21:23:54

This link might help you:

'Balancing payments' are usually because you've underpaid somewhere, I think? Did you have to pay self-employment tax is 2012-13?

nada29 Sun 25-Jan-15 21:31:00

Part of my income is a rental income and the rest is through PAYE. What confuses me is that when I submitted the tax, it calculated it like I'm due for refund! It clearly said £XXX payable to me!
Now, yes one payment is due by 31/1, second by 31/7. So the total is around £4K, which is "balancing payment" but then that 4K is doubled and it says only TOTAL: 8K!!! Please help.

nada29 Sun 25-Jan-15 21:35:16

Don't know why the amount of 4K is doubled again!

NoBloodyMore Sun 25-Jan-15 21:37:41

£4k to pay on just rental is a huge amount, did you def type in the amount deducted off paye?

juneybean Sun 25-Jan-15 21:44:22

My tax wasn't over £1,500 and I have to pay payments on account sad

nada29 Sun 25-Jan-15 21:50:52

Yes, I did include it but it looks it's not enough. Back to the form again, to calculate all sad

egnahc Sun 25-Jan-15 22:00:07

over £1000 for payment on account

So if you have to pay £4000 for 2013/4 then you have to pay the £4000 plus £2000 by January 31st on account and another £2000 by 31st July on account. Next January assuming you earn the same as in 2013/4 you wont have to pay £4000 but will pay some on account again etc

Does that make sense?

egnahc Sun 25-Jan-15 22:00:53

its isnt income from rental but profit? What tax rate are you on?

DiscoDancer Sun 25-Jan-15 22:03:34

If property is mortgaged then the mortgage should be entered as expenses so the profit will be difference between rent received and mortgage paid. This profit is what is taxable at the relevant percentage

nada29 Sun 25-Jan-15 22:07:37

Egnahc, I have to pay £4000 for 13/14 year. So, I pay £2000 in January and another £2000 in July. Why at the end is all doubled again? Total is £8000.

nada29 Sun 25-Jan-15 22:08:04

code is high - k606

NoBloodyMore Sun 25-Jan-15 22:12:30

£4k really is a massive underpayment, were you expecting such a large tax bill? Even as a 40% tax payer that's £10k of income not taxed.

I'd honestly see if you can get an accountant to look it over for you, they should charge about £100 or less.

If you're not expecting to have a similar amount next year you can apply to cancel/reduce the payments on account.

Payments on account are not usually payable when more than 80% of income is taxed at source.

piggychops Sun 25-Jan-15 22:13:00

The other £4000 is for the tax year we are in 2014/15. It's an estimate of what they think you will owe and you are paying in advance, so to speak. When you do your next tax return, if it's too much you'll get a refund.
The sooner you do your return after the end of the tax year the better, if possible.

piggychops Sun 25-Jan-15 22:16:23

A "k" code is given, I think, where your taxable benefits are greater than your tax allowance.
Sounds like you need an accountant to check things...

nada29 Sun 25-Jan-15 22:21:00

Thank you all - yes, I need to find an accountant to check all this for me as something is somewhere wrong. I've been paying tax, and a lot of it, and now this massive bill - don't know what to think.
Thank you again.

nannynick Sun 25-Jan-15 22:39:26

Are you getting company benefits in your PAYE job, such as company car, health insurance? I am wondering why you have a K code.

Definitely get professional advice, hope you can resolve it quickly.

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