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Posted Wed, 25 Jan 2023 14:32:29 GMT by Flascho
I am a self-employed freelancer and am thus normally paid any fees for my work product in gross, which I then declare on my self-assessment declaration for tax purposes. However, one of my clients, which is a university, for whom I completed a one-off piece of work informed me that their one-off payments are subject to PAYE and National Insurance. They have thus deducted tax pursuant to the Basic Tax Rate for my payment, as well as National Insurance, so that instead of being paid the full amount due, I was paid an amount reflecting the deduction of tax and national insurance. How should this be reflected in my self-assessment declaration given I have now already paid tax on this amount? How can I be sure that the amount of tax they have deducted from my payment is the correct amount (as I have not yet completed my self-assessment declaration and thus don't know how much tax I should be paying this year, following calculations of allowable expenses, etc.)?
Posted Fri, 27 Jan 2023 14:04:27 GMT by HMRC Admin 20
Hi Flascho,

You will show this particular payment as employment income and not part of your self employed turnover.
The credit for the tax already paid will then be shown in the calculation to reduce your overal liability.

Thank you.

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