Can I get away with paying no tax at all?!

[staranise]

Hello

Okay, today is a work day so MN is officially banned but as this is a genuine work question.... just trying to sort out my tax for 2007-2008 and have come across personal tax allowance. Excuse me soudning v thick but have not been freelance in the UK for a very very long time - does PTA mean that if I earn less than approx. £5.4k a year, I pay absolutely NO tax at all, bar NI?

I only work approx. one day a week so earn less than this but had still assumed that I would have to pay tax. Don't know whether to be depressed that I earn so little or pleased that I least I don't have to save it for the taxman!

You wont pay tax if you earn less than your allowance. and you won't pay extra ni either. you still have to pay some contribution to ni, mine is about £28 a quarter. But you only pay the extra (8%) on earnings over your allowance.

Also if you have paid any tax already, i.e. On earnings in the year, or tax on your savings, and you are under your allowance then you will get a rebate, which is always nice :-) i do my tax return online. It seems less complicated than the paper version. You can go back and change it as many times as you like, until its submitted. And it works it all out for you. I was due a rebate last year and it was in my bank account 4 days after i submitted my return online :-)

Thanks Clare - that's interesting about a rebate on savings and submitting online )

probablyh a stupid question but do they pro rata what you earn? I only worked from September-April of the last financial year. thanks again.

It is based on whatever you earn between April and March that year.

your tax allowance is for the year april to april, so you get that allowance. i doesn't matter that you didn't work for most of it.

however, you do have declare certain benefits (not child benefit) though i couldnt tell you what they are.

doing your tax return online is definately the easiest way, as it asks you a load of questions at the beginning then only gives you the relevant boxes to fill in. there's a helpline you can call if you get stuck, they're really helpful.

the first year i made an appointment at the local tax office, and spent half an hour with an adviser. i took all my paperwork with me, and he showed me how to fill out the form, and what i could claim and what i couldn't with regards costs, travel and household bills etc. he was really helpful too.

Sorry to hijack but relevant question. Say you only earn less than £200 in a year, helping out at a local college during exams, and they send you a P60 for the amount they've paid you. If you have not filled out a tax return for years (due to being SAHM) do you have to apply for one and fill it out, for a sum so far below the tax threshold? A bit confused and worried - rather not have to get into all that hassle for what was essentially pin money.

If they sent you a P60 that would suggest that you had been treated as an employee (and therefore paid via PAYE) during your time there, so you're not self-employed and therefore you don't have to fill in a tax return. But I would check with the college's personnel department, they should be able to tell you whether you're on PAYE or not.

Also for the OP, if you're earning below around £5k a year then you can also apply to opt out of paying NI if you so choose. There is a form you can get from the tax office to do this. However, obviously if you don't pay NI then it will affect your eligibility for pension and other benefits in the future. So if you can afford to pay it, I would.

coffeecrazedmama, i wouldn't have thought so, as having a p60 suggests that they employed you, so therefore its all taken care of in the system so to speak. tax returns need to be filled out if you are self employed, have a company (or earn over a certain amount each year)

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well, if i worked a full year, I would earn more than £5k, as I'm jsut below the threshold at nine months. I'll earn less than £5k this year as well bcause I want to stop working in September and claim MA - for which I think I need to be an Class II NI contributor I guess.

Many thanks for your help, extremely useful as always!

Thanks to those who've answered my butt-in. I've been worried I should be ringing and requesting a form. Thanks.

If you worked a full year and were over the threshold - you could maybe get your taxable amount back under it by deducting allowed exps - mileages, postage, heat & light etc. So may not have to pay tax then either.