How to Pay Self Assessment Tax Through PAYE

If you are fill in your tax return online before 30 December and are employed you can elect to pay any outstanding tax through your PAYE code.

underpaid tax

If you owe less than £3,000 tax for 6 April 2018 to 5 April 2019 you can elect for your tax to be collected via your tax code.

You’ll need to make sure you submit your tax return before 30 December to elect to do this.

If you miss the 30 December deadline, you’ll need to pay all the tax you owe by 31 January.

If you apply for this, HMRC will not guarantee that they can collect outstanding tax via your PAYE code until they check your estimated income levels for the next tax year.

You’ll also still need to pay any Class 2 National Insurance contributions as a lump sum by 31 January, as this cannot be included in this arrangement.

If you are submitting by 30 December, owe tax for 2018-19 and have a PAYE tax code, do you want us to try to collect the tax and Class 4 NICs due (if less than £3,000) through your tax code for 2020-21?

Choose “yes” if you are submitting your return before 30 December and want to arrange to collect any outstanding tax through your tax code for the tax year beginning 6 April 2020.

Choose “no” if you don’t want your tax coding to be changed and will ensure you pay your tax in full by 31 January.

If you are likely to owe tax for the current tax year (ended 5 April 2020) on income other than employed earnings/pensions e.g. savings or the High Income Child Benefit Charge, do you want us to use your 2019-20 PAYE tax code to collect that tax during the year?

If you know you have to pay tax for on something like the High Income Child Benefit Charge in the current tax year, you can choose to make a change to your current tax code to get a head start on paying it off.

Choose “yes” if it is likely that you will owe tax for the year from 6 April 2019 to 5 April 2020 and want to apply to pay what you will owe in the current tax year.

Choose “no” if you do not need/want to make a change to your tax code for your current years tax liability.

About Anita Forrest

Anita Forrest is a Chartered Accountant, spreadsheet geek, money nerd and creator of - the UK small business finance blog for the self-employed community. Here she shares simple, straight-forward guides to make self-employment topics like taxes, bookkeeping and banking easy to understand.