I made a beady profit last year, not a huge one, but enough that I owe HMRC a couple of pounds. I was a good girl and got round to filing my tax return well before Christmas and clicked the box which told them to take the money out of my day job paypacket, i.e. adjust my tax code to take the money I owe them.
All clear so far, I understand that bit.
So I have my new tax code. They know how much I earn as I told them in my tax return and they take their cut of the day job money. My new tax code (because the personal allowance has been increased this year) even with the lowering for the extra I owe them is more than I earn from the day job. So they're not going to take any tax.
So how does this work? Do they keep lowering the tax code each year until I get within it again (with the big pay freeze that has been going for a few years (even though they said at one point we'd get 1% this year) that's going to take a while), or will they give up and tell me to write them a cheque, or will they write it off (sort of carry it forwards like you can carry losses forwards)? I know I'd like that last one but that would have my current address in Cloud Cuckoo Land and I don't think they pay tax there ever!
Any ideas? Should I ring them and tell them or hope for the best, or just assume they know what they're doing? If I've told them to take it out of my wages will they fine me for not paying if they've mucked up?
Thanks.
I'd ring 'em up and ask them to explain it in (for me) words of one syllable or less. Tax is a dark art, can't fathom it out. Unless we have a beady accountant on here?
Well done for making a profit, dread to think what I'll have made this tax year.
When you fill out your return for 2012-2013 there is a box that you will need to fill in which says "unpaid tax for earlier years included in 2012-2013". You'll need to enter the figure in this box.
It will then be added onto next years tax liability.
Thanks Gaynor, but it could drag on for years. I think I'll have to do what Sue says and bite the bullet and ring them (one day when I can sit for hours going through menus and waiting for them to answer the phone).