Paying Your Self-Assessment Tax Through Your PAYE Tax Code

Posted by on Oct 20, 2018 in News Alerts, Newsletters | No Comments

As the deadline for the paper filing of the 2017-18 approaches at the end of October, one frequent question that we asked is “I am paid a PAYE salary and owe less than £3,000 in tax on my self-assessment, so why can’t I pay my tax through my tax code?”

On the face of it and in the narrative of the both the online and paper tax returns, there are three simple conditions that all have to be met to allow the self-assessment bill to be paid through your PAYE tax code:

  • you owe less than £3,000 on your tax bill;
  • you already pay tax through PAYE as an employee, company pension holder or alike; and
  • you submit your paper tax return by 31st October or your online tax return online by 30th December.

However, there are three further conditions that need to be met:

  • you have enough PAYE income for HMRC to collect it;
  • you do not end up paying more than 50% of your PAYE income in tax; and
  • you do not end up paying more than twice as much tax as you normally do.

It is this last condition that often prevents your self-assessment tax being collected via your PAYE code.

Take, for example, someone on a £20,000 salary in the current tax year with the standard Personal Allowance is £11,850, the total PAYE Income Tax due will be £1,628.20. In this scenario, the self-assessment tax can only be collected through the PAYE tax code if it is less than £1,628.20.

The figure if the salary is £24,000 would be £2,428.20 and £26,860 is the PAYE threshold where the Income Tax exceeds £3,000 and, therefore, you can be sure that a self-assessment bill of up to £3,000 can be collected through the PAYE tax code.

As the personal tax season comes to the fore, at Cooper Faure, we have a team of experts who can provide guidance and support. For further information, please contact us at