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Posted Sat, 06 Jan 2024 14:32:14 GMT by
Hi, I received a letter from HMRC stating I needed to complete a tax return due to a change in circumstances (I think due to my salary being over £100k). I only have one job, pay tax through the PAYE system, and do not have any extra income or need to inform HMRC of anything out of the ordinary. Yes when it has come to the final page of the tax return it is saying I owe approx £2,000. I don't quite understand this as all of my tax should have been taken out of my monthly salary. Is it possible I have just completed something incorrectly on the tax return form?
Posted Thu, 11 Jan 2024 16:04:30 GMT by HMRC Admin 5 Response
Hi

For 22/23, income over £100k is a Self Assessment requirement.
This also means you have less allowances due to you as these are reduced the higher your income. You may owe tax if you have had full allowances in your code but these are no longer due.
Please see - Income Tax rates and Personal Allowances

Thank you
Posted Thu, 11 Jan 2024 23:04:31 GMT by maxb
Hi, The fully automatic parts of PAYE fail to take account of the reduction of Personal Allowance when you earn over £100k. As a result, the first year you earn over £100k, PAYE can easily fail to deduct enough tax, leaving you with an amount owed at Self Assessment. In subsequent years, your tax code tends to be adjusted to take account of the amount of Personal Allowance you lost the previous year - but pay rises or variable bonus pay can still throw the calculation off, leaving an amount to be paid or refunded at Self Assessment.

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