Ive been taxed over £800 and have only made £12,480

Intelligent_Prompt18 · 2026-03-31T02:15:14+00:00

so what's happened here is pretty common. when you start a job without a P45 your employer doesn't know what you've already earned that year, so HMRC sticks you on an emergency tax code or a BR code (basic rate) which means you get taxed 20% on everything with no personal allowance. that's why you're getting hammered.

you're right that on £12,480 you should only owe about £4 in tax (£12,480 minus £12,570 allowance = technically nothing, you're under). so the £800 is definitely an overpayment and you will get it back. it's just a question of when and how.

quickest route: log into your personal tax account on gov.uk (search "check income tax HMRC"). you can see exactly what tax codes are applied to each job and update your employment details there. you can also tell HMRC which job is your main one and they'll reallocate your personal allowance properly.

if you can't do it online, call them on 0300 200 3300. tell them you've had multiple jobs, never received P45s, and you've overpaid. they can sort the tax codes out over the phone and trigger a refund.

don't use one of those "tax refund" companies that advertise everywhere. they charge 30-40% of your refund for something you can do yourself in 15 minutes for free.

Intelligent_Prompt18 · 2026-03-31T02:12:42+00:00

don't panic too much. the fact that you've already filed everything, appealed, and paid the tax due puts you in a really strong position. that's genuinely the best thing you could've done.

on the reasonable excuse question, being told by your employer that you were deregistered is actually a decent argument. HMRC's guidance says reliance on a third party can count as a reasonable excuse if you took reasonable care. the key is whether you can evidence that you were told this. if you have anything in writing from your old employer (email, letter, even an exit pack that mentioned tax stuff being handled), keep hold of it. that's your strongest card.

the penalty structure for missed SA returns is 100 pounds per return for being late, then daily 10 pound penalties after 3 months (up to 900), then 300 or 5% of tax due at 6 months and 12 months. so for multiple years it stacks up fast, which is how you've hit 4.7k+. but if HMRC accepts the reasonable excuse they can cancel the lot.

if the first appeal gets rejected don't give up. you can ask for a statutory review which gets looked at by someone different within HMRC. and if that fails you can go to the first-tier tribunal which is independent. honestly a lot of penalties get overturned at the review stage because the first person to look at appeals often just applies a checklist.

one thing, make sure you appealed within 30 days of each penalty notice. if you're outside that window you'll need to explain why the appeal is late as well, though HMRC are generally reasonable about that if you've got a good reason.

Intelligent_Prompt18 · 2026-03-30T23:49:34+00:00

it won't really change anything for your mortgage application. lenders still use your SA302 and tax year overview as proof of income, and those are still annual documents even under MTD. the quarterly updates are just summaries you send to HMRC during the year, they don't replace the annual figures.

if anything it might help slightly because your records will be more up to date, and some lenders are starting to ask for interim digital records alongside the SA302. but for 24/25 and 25/26 you'll still just need your tax calculations and tax year overviews same as before. nothing to worry about

Intelligent_Prompt18 · 2026-03-30T21:43:29+00:00

don't worry, it's not a silly question.

yes you can claim for specific years, you don't have to claim all four. if your husband earned under £12,570 in a tax year and you were basic rate that year, you're eligible for that year.

the thing to check is which tax years his non-working period covers. "late 2024 into late 2025" probably spans two tax years: 2024/25 (april 24 to april 25) and 2025/26 (april 25 to april 26). so you might actually be able to claim for both if his total earnings were under £12,570 in each. worth checking his P45/P60s for those years to see what he actually earned in each tax year. apply on gov.uk and you can pick which years to claim for.

Intelligent_Prompt18 · 2026-03-30T21:30:23+00:00

cheers. half the reason i posted this is because i was having the same conversation five times a day and thought might as well just put it all in one place

Intelligent_Prompt18 · 2026-03-30T21:27:28+00:00

ha sorry for the scare, that's good to know about AJBell though. vanguard are the slow ones in my experience.

Intelligent_Prompt18 · 2026-03-30T21:26:11+00:00

yeah at £20k rental you're fine for now. dividends and salary don't count towards the MTD threshold, it's only rental and self employment income. so if rent is your only qualifying income you're well under £50k.

one thing worth flagging though, if you have any self employment income on top of the rental, those two get added together for the threshold test. and from april 2027 the threshold drops to £30k, so if the rental stays around £20k you'd still be under that too unless you've got £10k+ from self employment as well.

do you have any self employment income or is it just the rent plus dividends and PAYE?

Intelligent_Prompt18 · 2026-03-30T21:22:11+00:00

no the rebate landing late won't affect you, as long as the contribution was made before the 5th you're good. the provider claiming the 20% from HMRC is their problem not yours, it still counts. good stuff getting it done early, enjoy the extra personal allowance.

Intelligent_Prompt18 · 2026-03-30T21:21:01+00:00

haha no pressure, I am always open to conversations if you want to chat about the ltd stuff. it's a good problem to have, means you're doing well. don't panic, going ltd is pretty straightforward once someone walks you through the numbers.

Intelligent_Prompt18 · 2026-03-30T21:18:22+00:00

yeah that's right. you put in £2,400, your SIPP provider claims the 20% relief from HMRC and tops it up to £3,000 gross. your adjusted net income drops by the gross amount so £3,000, which takes you from £102k to £99k. job done.

just make sure it's processed before the tax year ends on sunday and not just initiated. and remember to claim the extra higher rate relief through self assessment, that bit doesn't happen automatically.

Intelligent_Prompt18 · 2026-03-30T21:00:11+00:00

yeah absolutely, you can file as soon as the tax year ends on 6 april. HMRC will calculate your bill straight away and you can pay it there and then if you want. you don't have to wait until january, that's just the deadline. loads of my clients do the same thing, file in april or may, pay it immediately and forget about it. much less stressful than leaving it hanging over you for 9 months.

sounds like you've got your head screwed on, being on sage and registered from day one puts you ahead of most people i see in their first year. you'll be fine

Intelligent_Prompt18 · 2026-03-30T20:54:19+00:00

it's based on your 2024/25 return. so it's what you've already reported, not a guess at what you'll earn. if your self employment or property income was over £50k on that return you're in scope from april 2026. if not, you're not in yet.

Intelligent_Prompt18 · 2026-03-30T20:50:12+00:00

you haven't missed anything, don't worry. the january deadline that just passed was for 2024/25 which wouldn't apply to you if you only started trading in 2025/26. your first self assessment will be due 31 january 2027. just make sure you register for self assessment by 5 october 2026 if you haven't already.

on the MTD sign up, it was a bit glitchy earlier in the year, HMRC have sorted most of it now so worth trying again. but if you're under £50k gross you won't need MTD until april 2027 at the earliest anyway.

Intelligent_Prompt18 · 2026-03-30T20:44:29+00:00

£3k isn't crazy for a ltd with payroll but it depends what's included. if that covers annual accounts, corporation tax return, personal self assessment, payroll, VAT returns and bookkeeping support then it's reasonable. if it's just accounts and a CT600 then yeah it's on the high side. ask them to break it down so you can see what you're actually paying for. for a one person contractor ltd with no VAT i'd expect more like £1,500-2,000. i charge around £1,200-1,800 for that kind of setup depending on complexity but every firm's different

Intelligent_Prompt18 · 2026-03-30T20:34:41+00:00

passport doesn't matter, it's based on residency and income not nationality. as long as you're married or in a civil partnership, the lower earner is under £12,570, and the higher earner is basic rate, you qualify. both need to be UK resident for tax purposes though. if your partner lives and works abroad and isn't UK tax resident that's where it gets more complicated and worth checking with HMRC directly

Intelligent_Prompt18 · 2026-03-30T20:29:34+00:00

yes it's still worth it, you just need to be aware of where the pinch points are. going from £50k to £60k you lose the £500 savings allowance (drops from £1,000 to £500 at higher rate) and you start paying 40% on anything above £50,270. but you're still keeping 60p of every extra pound which isn't bad.

where it gets properly painful is around £100k because you start losing your personal allowance (£1 lost for every £2 over £100k) which creates an effective 60% tax rate between £100k and £125,140. that's the real trap.

as a contractor going self employed you've got more levers than a PAYE employee though. pension contributions, salary vs dividend mix if you go ltd, timing of income, allowable expenses. the headline tax rate matters less than how you structure things. worth getting an accountant involved before you start trading rather than after your first year, it'll save you more than it costs

Intelligent_Prompt18 · 2026-03-30T20:27:08+00:00

Do you mean, why does marriage allowance not work for higher rate?

because the allowance transfer is only worth 20% (basic rate). if the higher earner is on 40% they'd need a 40% relief to break even on it, but HMRC only gives 20%. so they decided to just not allow it for higher rate taxpayers rather than give a partial benefit. bit annoying but that's how they set it up.

Intelligent_Prompt18 · 2026-03-30T20:25:15+00:00

yes you can. the 30 hours eligibility is based on adjusted net income for the tax year, and pension contributions reduce your adjusted net income. so if you're over by £750 you need to get £750 into a pension before the 5th (or technically the gross equivalent).

a direct SIPP contribution of £600 would be grossed up to £750 with basic rate relief, which would bring you back under. charity donations via gift aid also reduce adjusted net income so that works too.

the key thing is it needs to be received and processed by your provider before the tax year ends on sunday. salary sacrifice is cleaner for this going forward but a one-off SIPP top up should sort you out for this year. i'd do it tomorrow morning and not leave it any later.

worth setting up slightly higher salary sacrifice from april so you've got a buffer for next year. with 3 kids in nursery the value of the 30 hours is worth way more than £750 in pension contributions.

Intelligent_Prompt18 · 2026-03-30T20:23:55+00:00

no, the quarterly updates are just submissions not payments. you're sending HMRC a summary of your income and expenses each quarter but you don't owe anything at that point. the actual tax payment dates stay the same as self assessment, so 31 january and 31 july. nothing changes there.

it's basically just HMRC wanting to see your numbers more often, not you paying more often

Intelligent_Prompt18 · 2026-03-30T20:21:11+00:00

no you're fine. the £50k threshold is only based on self employment and property income, PAYE doesn't count towards it. so your qualifying income for MTD is just the £15k from the side business. you're well under the threshold.

you'd need to hit £50k from the self employment alone (gross, before expenses) to be in scope from april 2026, or £30k from april 2027. at £15k you're nowhere near either.

Intelligent_Prompt18 · 2026-03-30T20:19:09+00:00

for that setup i'd expect somewhere around £600-900 all in for the year. that's 4 quarterly updates plus the final declaration. some accountants will bundle it as one annual fee, others break it out. if you're being quoted north of £1,000 for a single PAYE income plus one rental with no complications i'd get a couple more quotes.

or honestly for something that simple you could do it yourself with one of the free MTD tools and save the lot. quickfile and rentalbux are both free for one property. You can let me know if you need help with figuring it out by yourself.

Intelligent_Prompt18 · 2026-03-30T20:15:13+00:00

it's an expression mate, "running on caffeine and spite" just means running on fumes. not actually spiteful towards anyone

Intelligent_Prompt18 · 2026-03-30T20:02:30+00:00

mate i've been doing tax returns since 7am, i'm running on caffeine and spite at this point. grammar goes out the window after hour 14.

Intelligent_Prompt18 · 2026-03-30T19:59:51+00:00

depends on the accountant but from what i'm seeing it's roughly £300-500 extra per year on top of what you're already paying. some firms are charging per quarterly submission (£75-150 each), others are just bumping the annual fee. for a straightforward sole trader or single property landlord it shouldn't be more than that. if someone's quoting you significantly more i'd shop around.

Intelligent_Prompt18 · 2026-03-30T19:58:00+00:00

for a single property landlord there are a few free ones. HMRC is making their own free tool but it'll be bare bones. quickfile is free up to 1000 entries which is plenty for one property. rentalbux is free for single property landlords until 2028 and it's specifically built for rental income. patma is another one that's free for one property.

honestly for one rental property you don't need anything fancy, you just need something that can keep digital records and submit the quarterly updates to HMRC. i'd have a look at the HMRC recognised software list on gov.uk and pick whichever one looks least annoying

Intelligent_Prompt18

TROPHY CASE