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Understanding the P800 Tax Calculation
wicker.man
Posts: 5 Forumite
in Cutting tax
Hoping someone can provide some advice here. I have been utterly confused by the HMRC's treatment of my wife's tax situation over the last couple of years.
At the end of last year she repaid a sum of around £600 unpaid tax (actually £400 of it was money that HMRC sent her because they made a bad assumption of the amount of interest she had earned in a previous year) and reduced her tax code for 2012-13 significantly based on assumed interest earnings for the coming year.
In April, we filed a form R40 to declare her income for 2011-12 and hopefully get the tax code corrected. Today, we received a P800 tax calculation saying that she has underpaid about £80 tax.
Looking through the tax calculation, the PAYE income is correct and matches what we put in the R40. However, the untaxed interest figure is about £900 more than we put in box 3.4 of the R40. I can't work out how this can be. All of her interest is paid gross (R85's registered with all the accounts). There is also a discrepancy on the dividends income - declared on the R40 as £8, shown on the P800 as £4. An insignificant amount, but why is it different?
Help!!
At the end of last year she repaid a sum of around £600 unpaid tax (actually £400 of it was money that HMRC sent her because they made a bad assumption of the amount of interest she had earned in a previous year) and reduced her tax code for 2012-13 significantly based on assumed interest earnings for the coming year.
In April, we filed a form R40 to declare her income for 2011-12 and hopefully get the tax code corrected. Today, we received a P800 tax calculation saying that she has underpaid about £80 tax.
Looking through the tax calculation, the PAYE income is correct and matches what we put in the R40. However, the untaxed interest figure is about £900 more than we put in box 3.4 of the R40. I can't work out how this can be. All of her interest is paid gross (R85's registered with all the accounts). There is also a discrepancy on the dividends income - declared on the R40 as £8, shown on the P800 as £4. An insignificant amount, but why is it different?
Help!!
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Does your wife's earned income plus her savings income make her a taxpayer? If so, she should not have completed the R85 forms - the interest will be paid net and she should reclaim overpaid tax on R40.
http://www.hmrc.gov.uk/tdsi/ten-per-cent-guidance.htm might be of interest but the allowances used in the examples are outdated.
http://www.hmrc.gov.uk/rates/it.htm
I cannot explain the discrepancy in the P800.0 -
xylophone, thanks for your reply.
It's right on the borderline. Her PAYE income plus untaxed interest for 2011-12 was £7560. We didn't think the interest would take the income over the Personal Allowance and therefore submitted R85's. It was only when the interest was paid that we realised it went over the threshold. I figured that this would be sorted out via the R40 form. My concern is why the tax calc shows a total income of about £8500. They have quoted a figure for the untaxed interest that bears no resemblance to the values we submitted without any explanation as to how it was calculated. It looks like an error to me - I suppose we'll have to call them.0 -
Hmm. Looking back at the last P800 Tax Calc for 2010-11, it shows the same value for untaxed interest and dividends as the 2011-12 one just received. So, it looks like they have updated the PAYE element of income with data from the R40, but not the untaxed interest.0
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Why would you use an R40? It's a form to claim repayment of tax overdeducted on savings interest ...... and your wife hasn't paid any. No wonder they're a bit confused.
You ask them for a P810 ...... or simply write a letter with the figures on it and saying what you're intent on achieving. After all there's little point changing her tax code to collect an underpayment if she's under the PAYE threshold?
Bear in mind the P800 probably doesn't come from the R40. They've started issuing them for 11/12 early this year. So it's probably just been issued because they have her pay / tax from the employer.
If you want to keep things straight - filing R85s for everything when you're borderline isn't a good way to achieve it.If you want to test the depth of the water .........don't use both feet !0 -
or simply write a letter with the figures on it
That's what I do for my Mum.
However when I wrote my first letter . many years ago, HMRC replied requesting the P60's, certificates of interest etc. I sent them off and never had them returned even after requesting them several times ( thank goodness I took copies )
This year I did a catch up on a few years and I must say Mum had her refund very quickly, I was impressed. I sent all P60's etc and had them returned pronto. I was ready to wait for months !0 -
They had sent us the R40 to fill in. It does also ask for interest paid without tax being deducted, which is where we put the data - box 3.4.
Anyway, we phoned HMRC this morning to find out what was going on. Basically, they had assumed the same interest as last year because they hadn't processed the R40 at the time. They said that a new P800 had been sent 2 days ago following the processing of the R40, and confirmed that this had the right numbers on it. So all should be OK.0 -
I am confused by my P800. the details on the letter was
tax year 2010-2011 repayment £344.18 cheque received
tax year 2009-2010 repayment £229.82 but no cheque yet
tax year 2008-2009 repayment £114.89 but no cheque yet.
So is the £344.18 the total I get or am I still due the other 2 cheques.
I have calculated the amounts and they dont equal the cheque received0 -
The repayment for 2008-09 should be included in the calculation for 2009-10.
The combined repayment for 2008-10 should be included in the calculation for 2010-11.
The total repayment for 2008-11 would therefore be £344.18, which should be the value of the cheque. That would be an overpayment of about £115 per year, which matches the figures you've quoted above.0 -
chrisecole wrote: »I am confused by my P800. the details on the letter was
As post #10 .... where there are several P800s then the final one contains the net under / over payment. And only one chequeis issued. It's explained in the P800 Notes - read Note 16.
If you look at the 08-09 final figure - you will find that 'adjusted' forward to 09-10. And so on.If you want to test the depth of the water .........don't use both feet !0
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