Self assessment - how can I owe money when my employer pays my tax?

[TheGoddessBlossom]

Hi,

Have been selected to complete a self assessment. Am employed full time and my employer pays my tax.

It seems I owe £2800! How can this be right? There appears to be a disparity between what I have paid and what the Inland revenue have calculated I owe!

Your employer probably had you on the wrong tax code. Did your benefits change during the year or anything? Or did you have a bonus that tipped you over into the next tax band, anything like that? Maybe your employer didn't notify HMRC of changes meaning not enough tax was deducted.

Jesus I hope not. No, no changes like you describe Flowery. Kerist I really hope I don't have to find 3k.

Eeek.

No income from elsewhere or anything?

I'd be inclined to ask whoever does payroll at your employer to check your self-assessment for you, they should hopefully be able to explain.

check your P11d for expense claims/health insurance/car/other benefits -and that they have been declared (if not they see them as income and therefore taxable or something like that). I used to get SA every year -they signed me off when they realised i had no other income and all the extra funds were all job related.

One question - did you input your 'gross pay' or your 'taxable pay'? Could quite likely be due to the difference. You should enter you 'taxable pay'.

I know three people who were all on the wrong tax code this year - one had a £4k+ tax bill!

Hi all. Transpires that I earned an amount in FY10-11 that meant my personal tax allowance was reduced and I was being taxed at the wrong code.

Bugger bugger. And bugger.

Oh goodness. Is it anyone's fault? If it was your employer's mistake it might be worth asking them for an interest free loan to cover the amount.

Or, sometimes you can ask HMRC if they can adjust your tax code for this year so that a bit extra is deducted each month this year to cover the amount, rather than having to pay all upfront.

Don't panic. You can appeal to HMRC for a reduction in the amount owed if you can demonstrate that you could not have reasonably known that your tax code was wrong at the time. As said above, they can often adjust your following years' tax codes to recoup the money rather than ask for a lump sum. If you are completing a self-assessment online can I recommend using software such as the one provided by TaxCalc? Makes the process very simple indeed.