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Wednesday, 3 October 2012

Tell HM Revenue & Customs about a change of income or circumstances

A change to your income or circumstances may affect how much tax you need to pay. It may also affect any tax credits or benefits you get. So it's important to notify HM Revenue & Customs (HMRC) early on - to prevent overpayments or underpayments that will need correcting later.

Effect of changes on tax credits or benefits

Any change in your income or circumstances may affect your entitlement to benefits or tax credits. Read more in the pages below.

The rest of this page deals with reporting changes that affect your tax.

Change of address

If you move, let HMRC know as soon as possible. This will prevent the loss or late arrival of:

  • payments you are due
  • important forms asking for details about your income and allowances - keeping HMRC up to date may help prevent you over or under-paying tax
  • notices, such as coding notices and notices of tax credit awards - if you get these in time you'll be able to appeal if you disagree

You may also avoid automatic penalties and surcharges for sending in your tax return late or paying your tax late because the forms went to the wrong place.

Your employer or payroll will not tell HMRC that you have changed address.

Changes to income

If you're on PAYE (Paye As You Earn) but don't normally complete a tax return

Let HMRC know about changes to income not dealt with through PAYE. For example changes to savings income or income you receive outside your job or pension, or starting to get rental income.

HMRC may be able to change your tax code so that you pay the right amount of tax through PAYE.

However in some cases HMRC may ask you to complete a tax return and pay extra tax through Self Assessment. They will write and let you know if they need you to complete a separate tax return.

If your taxable income has gone down you may be due a refund.

If you don't normally complete a tax return and you're not on PAYE

If an increase in income takes your taxable income above your personal allowance (and any blind person's allowance you're entitled to) you must contact HMRC.

You may need to complete a tax return and pay any tax you owe through Self Assessment.

If you already complete a Self Assessment return

If you have or expect a significant decrease in income you can let HMRC know right away; they may be able to adjust your payments on account down to reflect the revised amount.

Gains above your Capital Gains Tax allowance

You must tell HMRC if you make a capital gain which is greater than the Capital Gains Tax allowance for the current tax year. You may need to complete a tax return if you don't do so already. This might apply, for example, if you sell shares or a second property.

Start or stop receiving state benefits

If you start or stop getting state benefits, such as Jobseeker’s Allowance, Carer’s Allowance or Employment and Support Allowance, it may affect your tax bill.

The sooner you get in touch with HMRC and tell them, the sooner they can adjust your tax code to make sure you always pay what’s due.

Your company benefits change

Employers don't have to tell HMRC about any company benefits you get until the end of the tax year, unless it's a company car.

To avoid a large tax bill at the end of the year, you can tell HMRC about any other taxable benefits you start to get right away (for example medical insurance or loan subsidies). You can also report changes to existing benefits. HMRC will adjust your code number and start collecting the extra tax through PAYE sooner.

Contact HMRC

Who you need to contact within HMRC depends on your circumstances.

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