How to Pay Self Assessment Tax Through PAYE

One of the ways you can pay your self-assessment tax bill is through your PAYE tax code. In this guide, you’ll find out how you can request to pay self-assessment tax through PAYE and the deadline for letting HMRC know.

Updated 13 October 2021

Friendly Disclaimer: Whilst I am an accountant, I’m not your accountant. The information in this article is legally correct but it is for guidance and information purposes only. Everyone’s situation is different and unique so you’ll need to use your own best judgement when applying the advice that I give to your situation. If you are unsure or have a question be sure to contact a qualified professional because mistakes can result in penalties.

1. Can You Pay Self Assessment on PAYE?

You can pay self-assessment tax through PAYE if you file your tax return online by 30 December and owe less than £3,000 in tax. If you miss the 30 December deadline then you’ll need to pay all the tax you owe by 31 January in one lump sum.

Unfortunately, HMRC doesn’t guarantee they can always collect your outstanding tax through your tax code because they need to check your estimated income levels for the next tax year. That way, they will have comfort that you’ll have sufficient earnings in your job to pay what you owe.

But if they do agree to you paying through your tax code, they’ll send you a letter and your employer a notification of change in tax code, known as a P6, and your employer will change your tax code on your payslip.

You’ll still need to pay any class 2 national insurance you owe as a lump sum by 31 January. This cannot be collected through your PAYE code because it is a different type of tax.

2. How to Pay Self Assessment Tax Through PAYE

You can ask for HMRC to collect your self-assessment tax through PAYE when you fill in your tax return. After you have entered your numbers, you’ll be able to make your request:

underpaid tax
How to Pay Self Assessment Tax Through PAYE

You’ll also be asked whether you would like tax to be collected on other taxable income that you know you have to pay in the following tax year such as bank interest and the high income child benefit charge. You can choose for your upcoming tax code to be amended to cover the tax on this, so you have a head start on your next years tax bill.

Related:

Taxes are changing! From April 2024 sole traders will need to report their earnings and pay tax on a quarterly basis. This is known as Making Tax Digital, which you can read more about in this guide to help you get prepared.

About Anita Forrest

Anita Forrest is a Chartered Accountant, spreadsheet geek, money nerd and creator of www.goselfemployed.co - 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.