Self-assessment tax returns for 2017/18 need to be filed online by 31 January 2019. However, if an individual wishes to take advantage of the opportunity to have any self-assessment tax that is owed collected through PAYE via an adjustment to their tax code, an earlier deadline of 30 December 2018 applies. (Where paper returns are filed these must be filed by 31 October 2018.)

A individual can pay his or her self-assessment bill via their tax code as long as the following conditions are met:

  • the individual owes less than £3,000;
  • the individual already pays tax through PAYE, as would be the case if they are an employee or receives a company pension;
  • the individual tax return was submitted online by 30 December 2018 (or on paper by 31 October 2018).

Where these conditions are met, HMRC will automatically adjust the individuals tax code to collect any tax due under self-assessment.

However, in some circumstances it is not possible for tax to be collected via the tax code, even if the above conditions are met. This will be the case if the individuals  income is insufficient to collect the tax due or to do so would breach the overriding limit as the individual would pay more than 50% of their PAYE income in tax.

HMRC can also collect other tax debts via PAYE – the amount that can be collected in this way operates on a sliding scale depending on the individuals income, ranging from £3,000 where the individuals main PAYE income is less than £30,000 to £17,000 where the individuals main PAYE income is more than £90,000.

see HMRC’s website for further information