December 5th 2014
At present, if you file your Self Assessment tax return before a certain date, you can elect to have any arrears paid off by making an adjustment to your tax code in the following tax year.
In order to qualify for this option you must have your return filed by 30 December.
For example, if you file your 2013-14 return before 30 December 2014 you can request to have an underpayment recovered by HMRC in the tax year 2015-16. To achieve this, HMRC will adjust your code number so that you pay additional tax each month that adds up to the amount owed by the end of the 2015-16 tax year.
There are a few conditions:
1. For 2013-14 the maximum that can be paid off in this way is £3,000.
2. HMRC can only adjust a code number if you have a source of income (salary or pension) that is subject to PAYE.
3. HMRC will not adjust your code if you do not receive sufficient income from the source against which the underpayment is to be coded, or
4. If your PAYE deductions would be doubled - twice as much Income Tax would be deducted, or
5. The 50 per cent K code limit would be exceeded.
Another reason to ensure your return is filed now.
Please contact DSC chartered Accountants in Harrogate if you wish to discuss this article in more depth.
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