HMRC says I need to pay £2440 tax on £1300 earnings. Can anyone help me figure out why?

[CountySheriff]

Not the most exciting topic, sorry, but hoping the mumsnet hive will have some idea or steer me in the right direction.

I pay tax through PAYE as I'm an employee but I do have additional income on the side - mainly freelance work, including some abroad.

I am a high rate tax payer and have not had any underpaid or overpaid tax in any previous years. 2017-2018 tax year PAYE coding notice did not show any tax underpaid.

Completed my self assessment to declare an additional £1300 earnings (additional to my £54000 salary, already taxed through PAYE), and got a massive shock when the calculation showed as £2,440 owing to HMRC. (Plus another £1200 for 'payment on account'!).

Have tried to call them today but the line was busy and kept cutting me off. And now the office is closed.

I can't figure out what is going on.

I've filled in a self assessment return each year for similar amounts and can't work out why this year the tax owing shows up as greater than additional earnings?

Am trying to submit today so any additional money owed goes out of my PAYE rather than a lump sum I need to pay in Jan.

Do you claim child benefit? Could it be they’re wanting you to pay that back?

Could you have possibly misplaced a decimal point or something on your forms?
I would seek professional accountant advice for peace of mind.

Child benefit claw back?
Student loan repayment?
Error in your tax coding - what is the code on your mth 12 pay slip?
Rental income?

If you have the calculation you should just be able to work through it and determine why.

First thought is Child Benefit
second thought is benefits in kind

Are absolutely sure it's HMRC you're online with? Might it be a scam?

I do claim CB but, when I take off pension and other deductions* it brings my net income to below the threshold £50,000.

*I took part in a strike and it lowered my income for the 2017-2018 tax year by £2k+.

Have you downloaded the ‘view your calculation’ report to see how they’ve ascertained that figure? Have you entered the tax already paid via PAYE correctly?

Higher rate tax and no child benefit? Is it the online tax return, can you go through the figures again?

The payment on account makes me think it's a projection for the next year as well though.

county
Thing is that the extra earnings have put you back up over the CB limit for your total income and its a cliff edge
hence the bill

Anybody gets Child Benefit regardless or their earnings
Even Kate
And Meghan 🙂

Payment on account is purely because the bill is over £2000
(am filing tax returns for clients at the moment)

Cross post with your update but agree with TalkinPeace, you've gone ovr the threshold so they will reclaim some Child Benefit.

Fleurdalys
Nope.

Just checked all the decimal points, all correct.

No student loan and no rental income.

I also don't have any expenses, benefits in kind or anything complex.

Just one additional lump sum to declare.

Even if it was a child benefit claw back, can't figure out how they make out £2400 if the total child benefit for 12 months is less than £1000?

You mention "other deductions" - that bit does not make sense ....

I've got my mega taxcalc software open at the moment.
I can test the numbers if you like ?

Hm, the CB section of the tax return asks for net income though?

"Was your income over £50,000?
Work out your net income for the tax year 6 April 2017 to 5 April 2018 by following steps 1 to 4 below. If your net income is over £50,000 select 'Yes' from the drop-down menu, otherwise select 'No''"

my net is £48,000 including the additional earnings.

Agh I'm confused!!

What does the calculation say?
If there is no CB clawback (it would say on the calculation) and the figures are right then it sounds like there was an error in your PAYE coding.

Talkin oh thanks!!

There is a bit that asks you to deduct your pension contributions from the total. That's the one I meant.

So my total was £51692 that year + £1300 - £4345.28 pension
which is how I worked out a net of £48647

But it wouldn't surprise me if I got that that wrong.

chasing The Calculation message says

"Total amount due for 2017-18 £2,440.40
Plus
First payment on account for 2018-19 £1,220.20
Total to be added to Self Assessment account due by 31 January 2019
HM Revenue and Customs will add this amount to your Self Assessment statement of account. It doesn't include any 2017 to 2018 payments on account you may have made or any other amounts outstanding. To help you to decide how much, if anything, to pay by the due date, check your Self Assessment account and use the information above until it transfers over.

Please note: Please carefully check the figures and the amounts due, which are calculated using the amounts you have entered. HM Revenue and Customs will allocate your payments against any Class 2 National Insurance first unless you have outstanding debts.

£3,660.60
Second payment on account for 2018-19 will be due by 31 July 2019 £1,220.20"

Thats the amount due, you should be able to view the full calculation which shows how much at x%, less tax deducted st source etc.

There will be no clawback on that income

Your salary has to be the one from the P60
top box ... pensions are already taken into account
PM me the numbers ....

Top of P60 (taxable income)
Tax deducted (from P60)
UK self employed total
Overseas amount
CB received

and I'll plug it into the software (darn thing costs me £1000 a year, gotta get my moneys worth)

Oh hang on, I just saw that 'View Calculation'!!! Gah, can't believe I didn't see that earlier.

Ok....I think I see what has happened. Looks like it's not taken into account tax I've already paid through PAYE but....there is no section anywhere to fill that in - or have I missed it?

"Pay from employments £50,300.00
Other income: £421.00
Total income received

£50,721.00
minus Personal Allowance £11,500.00

Total income on which tax is due £39,221.00"

The £50,721 doesn't make sense....none of the figures I entered add up to that!

Bloody hell I should really read things till the end!!

The rest of the calculation says

How we have worked out your income tax

Amount	Percentage	Total

Pay, pensions, profit etc. (UK rate for England, Wales and Northern Ireland)

Basic rate £33,500.00 x 20% £6,700.00
Higher rate £5,721.00 x 40% £2,288.40
Starting rate £0.00 x 0% £0.00
Nil rate £0.00 x 0% £0.00
Basic rate £0.00 x 20% £0.00
Total income on which tax has been charged £39,221.00
Income Tax due £8,988.40
minus Tax deducted
From all employments, UK pensions and state benefits £6,548.00
Total tax deducted £6,548.00
Total Income Tax due £2,440.40