Some informal Self Assessment questions

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1

As you’re about to find out, I really need to get a better understanding of tax.

However, having just had my Self Assessment come through, I had a couple of quick questions that I wanted to run past you guys, before I went back and officially queried what I have been sent.

I’ve been using an accounting firm over the last few years to do my Self Assesments based on secondary passive income that I was generating from a few things I was doing on the side.

Those hustles have dried up though. To the extent that 100% of the revenue in my self assessment comes from my day job - for which I’m paying PAYE. It was the same last year too.

In fact, the only reason that I’m still submitting a Self Assessment is because I’m a Director of a business (more on that in a sec!) and I believe by law that position requires me to do so.

Anyway, I had my Assessment come back from the accountants on Wednesday for final approval.

It all looked fine, apart from the fact they hadn’t indicated on the form that I was a company director.

Last night the amended form came through, with the correction. I’d now been tagged as a director - but I also noticed that the tax I was due to pay had also increased by around 40%

So a couple of questions:

If 100% of my revenue is on PAYE, why have I got any tax to pay anyway?

And secondly, I’m not aware of any tax implications of being a company director, so why is my bill being increased so much seemingly for just having that title?

TIA

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There are virtually no tax implications when it comes to your tax liability for normal monthly employment income, you only suffer from additional NIC if you get bonuses due to specific rules concerning directors.

Could it be that box 2 of SA102 has not been filled? The figure should come from your P60.

If box 2 is in fact filled appropriately, it may be worth instructing your adviser to call HMRC and sort it out (presumably you have filed form 64-8 with them), otherwise, you can always call HMRC with your UTR and the agents are very often quick to resolve the issue. Essentially, if you paid IT and NIC on a monthly basis, you should not be charged any additional tax unless your tax code at the beginning of the year was wrong and your allowance was inflated (which happens as often as almost never, usually the opposite :grin:).

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