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    • dakotadveils
    • By dakotadveils 16th May 17, 12:36 PM
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    dakotadveils
    Tax code query
    • #1
    • 16th May 17, 12:36 PM
    Tax code query 16th May 17 at 12:36 PM
    Good afternoon,

    Can anyone help please as I am having difficulty getting a straight answer out of HMRC's helpline!

    I have received my tax coding for this year as 164L and have queried this.
    Last year I had a company car and paid the relevant tax according to salary/BIK rates etc (My tax code was reduced to 391L last year.

    HMRC are saying I have underpaid tax by £2.8k and I have no idea and they cannot explain how either.
    When I use their own tax calculator it looks like my tax paid has been correct for 2016-2017! its the new 2017-2018 its all gone pete tong

    What they have done is reduce my tax code by the BIK value (6.9k roughly this year)so pay tax on m ore of my salary but also increased my income by the same value due to the BIk value - surely this is double taxing?

    Please help,I'm a little confused.

    Thank you
    kind regards
    Mark
Page 1
    • Dazed and confused
    • By Dazed and confused 16th May 17, 9:43 PM
    • 1,473 Posts
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    Dazed and confused
    • #2
    • 16th May 17, 9:43 PM
    • #2
    • 16th May 17, 9:43 PM
    You're more likely to get some helpful replies if you provided details of how your tax code has been calculated. Ideally for both last year and this.

    Which tax year does the underpayment relate to? You should have a P800 calculation or tax code which shows this.

    It's quite normal to have tax underpayments with company benefits such as a car, was there a long delay between the car being provided by your employer and your tax code being changed to include the car benefit?
    • xylophone
    • By xylophone 17th May 17, 12:08 AM
    • 21,987 Posts
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    xylophone
    • #3
    • 17th May 17, 12:08 AM
    • #3
    • 17th May 17, 12:08 AM
    they cannot explain how either.
    Why not?

    Set out your query in writing - keep a copy and send "signed for".

    https://www.gov.uk/government/organisations/hm-revenue-customs/contact/income-tax-enquiries-for-individuals-pensioners-and-employees
    • dakotadveils
    • By dakotadveils 17th May 17, 9:38 AM
    • 12 Posts
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    dakotadveils
    • #4
    • 17th May 17, 9:38 AM
    • #4
    • 17th May 17, 9:38 AM
    Thank you for your help, I had spoken to the HMRC over the phone 9when I eventually got through and they cannot give me a straight answer)
    • sheramber
    • By sheramber 17th May 17, 3:09 PM
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    sheramber
    • #5
    • 17th May 17, 3:09 PM
    • #5
    • 17th May 17, 3:09 PM
    give us a copy of the coding notice for 2016/17 and for 2017/18 showing the allowances given and deductions made to arrive at the code number.

    What are the pay and tax figures on your P60 for each year?

    Do you have a P800 notice showing the underpayment of £2800? If so, copy the figures here.

    Does your employer pay you a car allowance ?
    • dakotadveils
    • By dakotadveils 17th May 17, 8:42 PM
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    dakotadveils
    • #6
    • 17th May 17, 8:42 PM
    • #6
    • 17th May 17, 8:42 PM
    Hi, Coding info below from my p60

    2015-2016 Tax code 1026LM1 The only BIK was a £717 medical insurance. Tax paid £6450.25
    I have found a letter from HMRC that says my tax was underpaid £15.25 for that year.

    2016-2017 Tax Code 391LM1 BIK £6913 (car) and £717 as above. Tax paid £8865.53

    2017-2018 still waiting for my info from HMRC but in my online personal tax account it shows this 164L tax code and an underpayment of £2800.13 , This tax code of 164L isalso on my first payslip of the year and have paid tax £871.66 in month one, (BIK is now only the car at £6913 for the year)

    Thanks for your help!
    • Dazed and confused
    • By Dazed and confused 17th May 17, 11:07 PM
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    Dazed and confused
    • #7
    • 17th May 17, 11:07 PM
    • #7
    • 17th May 17, 11:07 PM
    Based on the information you have supplied for 2016:17 you are due a tax refund of £8865.53.

    In all honesty though it's impossible for anyone to give you a sensible answer when you have failed to provide all the details from your tax code and don't include details of your taxable salary.

    If I was a gambler though I'd hazard a guess that the car benefit was included in your tax code for the first time during 2016:17 and the £2800 underpayment in this years tax code is either an estimate of the tax owed for last year (because the car benefit was only included in your code part way through the year) or an estimate of the tax owed for last year plus the tax owed from 2015:16.

    In any case until you get your P11D from your employer for the 2016:17 tax year you cannot get an accurate figure of the tax owed for last year.

    Apologies if the above comes across as rude but it gets a little wearing sometimes the number of people who post on here with request for help but don't supply any of the basic information for people to actually help. Rant over.
    Last edited by Dazed and confused; 17-05-2017 at 11:10 PM.
    • dakotadveils
    • By dakotadveils 19th May 17, 12:41 PM
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    dakotadveils
    • #8
    • 19th May 17, 12:41 PM
    • #8
    • 19th May 17, 12:41 PM
    Thank you I appreciate your comments and help, but I did not put gross salary as it was not asked for and I misunderstood.

    here goes

    2016-2017 £42183 + CAR £6913 BIK +£717 Medical insurance
    2017-2018 £45000 + CAR £6913 BIK

    FYI 2016-2017 the car benefit was on month one payslip - so fromn the start of the tax year

    Thanks again
    • sheramber
    • By sheramber 20th May 17, 2:46 PM
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    sheramber
    • #9
    • 20th May 17, 2:46 PM
    • #9
    • 20th May 17, 2:46 PM
    Sorry , but your information contains a lot of anomalies.

    For 2015/16

    Your code number of 1026LM1 means that the code was reduced to that figure during the tax year. M1 is operated so that a large amount of tax underpaid from the 5 April to the date of the change is not deducted in all at once. Month 1 after the code number does not refer to month1 of your payslip, It means no reference is made to the tax deducted previously as that would mean a large amount of tax deducted in one moth

    This means there will be tax underpaid for that year for the period before the new code was operated. This under payment is normally carried forward and included in the code number for the next or a later year.

    Personal allowance is 10600 less BIK 717 would be 9883 giving a code number of 988 . But you say your code number was 1026

    1*So how was the code number of 1026 made up?

    2 *What was the total pay figure for 2015/16?

    3 *Have you got a tax calculation for 2015/16.? If so copy it here.


    For 2016/17

    Again your code number has M1 after it meaning it was reduced during to the tax year and again there will be an underpayment for the period from 5 April to the date on which the new code was operated.

    Personal Allowance is 11000 less CAR 6913 + MED 717 (7630) = 3370 which is a code number of 337.

    4*As your code was 391 , how was that made up?

    From your figures pay 42183
    Less coding allowances 3919
    38264
    20% 32000 6400
    40% 6264 2502
    tax due 8902
    tax paid 8865.53

    2017/18

    the underpayment must come from one or more previous years. If you cannot get this information from your online tax account then HMRC must be able to explain to you what year/s it comes from. If the person answering the phone cannot tell you then ask to speak to someone who
    • dakotadveils
    • By dakotadveils 22nd May 17, 8:22 AM
    • 12 Posts
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    dakotadveils
    thank you for your help, I will dig out and post the info later. I have found a HMRC letter for the start of tax year 2015-2016 where I had underpaid £15.25 in tax the prior year 2014-2015.I'll look at all the info tonight and post what i can (recently moved so a lot of documents still boxed)
    • dori2o
    • By dori2o 22nd May 17, 10:05 PM
    • 7,264 Posts
    • 12,110 Thanks
    dori2o
    When providing the BIK figures please provide them from the P11D as these will be the ACTUAL bik figures.

    The figures in the code are only ever estimates. It is only at the end of the tax year that HMRC will know the actual figures when the P11D is submitted.

    This is particularly the case with BIK such as medical insurance which often changes in price part way through the year depending on the premiums your employer can agree with the insurance provider.

    HMRC are not involved in these negotiations and your employer is only required to notify this at the end of the year on the P11D.

    Similarly with company cars, your employer is only asked to notify HMRC of any changes once every quater, so if you get a car 1 week after they have submitted their quaterly submission it could be 3 months before HMRC are informed, this would lead to a tax underpayment.

    This is why each individual should inform HMRC themselves whenever any changes happen as soon as they can.
    To equate judgement and wisdom with occupation is at best . . . insulting.
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