How will I know what tax to pay?
Help with your Tax Return guide
If you submit your tax return on-line, then your income tax (and, for the self-employed, your class 4 National Insurance bill) will be calculated automatically. This happens just before you submit the return on-line to HMRC. It is a good idea to check that the calculation is reasonable before you submit the tax return. If the result of the calculation – a bill or a refund – is unexpected, then there could be a mistake on your return. You should check all the entries in detail.
Possible errors might include, for example:
- Omitting the figure for tax paid from your P60 (employment income) or from your CIS income (for a self-employed Construction Industry Subcontractor)
- Putting an incorrect amount in the box for ‘Under-paid tax included in your PAYE code’
- Entering information for business turnover, expenses, profits or losses in the wrong box
- Including 12 month’s income rather than the amount received in the tax year if this is less – for example if you started to receive a pension part-way through the tax year. The tax year runs from 6 April in one year to 5 April in the next
- Failing to claim for pension contributions paid (amounts paid to an employer’s pension scheme will normally have been deducted already from your PAYE income, and so do not need adjusting)
- Not making a claim for an allowance you are entitled to, such as the Blind Person’s Allowance – see Personal allowance
- Failing to make a claim to transfer part of your personal allowance to your spouse or civil partner. This is called the ‘marriage allowance’ and is first available from 2015-16 tax year. See Personal allowance section for details
- Leaving out a claim for employee expenses or fixed rate deductions as an employee. See employee expenses.
If you submit your tax return on paper (due by 31 October), then HMRC should calculate the tax due and send you a calculation in time for the 31 January payment deadline. You should check this calculation in the same way as for an on-line calculation.
There is more about how tax bills are worked out in the income tax section, where there is a worked example.
- Construction Industry Scheme
- Year end statement from your employer of gross income and tax paid