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  • FIRST POST
    • dakotadveils
    • By dakotadveils 14th Jun 17, 10:20 AM
    • 13Posts
    • 2Thanks
    dakotadveils
    Tax coding / underpayment help
    • #1
    • 14th Jun 17, 10:20 AM
    Tax coding / underpayment help 14th Jun 17 at 10:20 AM
    Good day,

    Could anyone possibly help as I am having no joy getting a sensible answer out of HMRC and I am very confused myself.I have received notification of an underpayment of £2.8k in income tax and my tax coding has been adjusted to 164L for 2017-2018. I am at a complete loss as to why there is this underpayment.

    I have used various online calculators (HMRC and salary calculator) and the amounts do not add up. The only underpayment was a Tax letter stating £15.83 Underpayment during 2014-2015 tax year.


    Below is my salary info and shows when my BIK changed due to receiving a company car.


    Any help much appreciated

    Month______Gross____Tax________Ni_________Tax coding______BIK
    Apr/15____3405.24___504.2_____327.99_____ Tax code 1026L__BIK (annual £736)** Tax letter stating £15.83 Underpayment during 2014-2015 tax year
    May/15_____3570_____537.2______343.96_____Tax code 1026L
    Jun/15_____3570_____555.85_____343.96_____Tax code 1026L
    Jul/15_____3570_____521.4______343.96_____Tax code 1026L
    Aug/15_____3570_____541.45_____343.96_____Tax code 1026L
    Sep/15_____3570_____541.45_____343.96_____Tax code 1026L
    Oct/15_____3570_____541.45_____343.96_____Tax code 1026L
    Nov/15_____3570_____541.45_____343.96_____Tax code 1026L
    Dec/15_____3570_____541.45_____343.96_____Tax code 1026L
    Jan/16_____3570_____541.45_____343.96_____Tax code 1026L
    Feb/16_____3570_____541.45_____343.96_____Tax code 1026L
    Mar/16_____3570_____541.45_____343.96_____Tax code 1026L
    BIK change - company car received 28/03/16(annual £6913)

    Apr/16_____3,534.30_____542.26_____347.76_____Tax code 1026LM__BIK (annual £736 + £6913)
    May/16_____3,534.30_____542.27_____347.76_____Tax code 1026LM1
    Jun/16_____3,892.30_____892.66_____356.22_____Tax code 391LM
    Jul/16_____3,534.30_____749.46_____347.76_____Tax code 391LM
    Aug/16_____3,534.30_____749.46_____347.76_____Tax code 391LM
    Sep/16_____3,892.30_____892.66_____356.22_____Tax code 391LM
    Oct/16_____3,534.30_____749.46_____347.76_____Tax code 391LM
    Nov/16_____3,534.30_____749.46_____347.76_____Tax code 391LM
    Dec/16_____3,534.30_____749.46_____347.76_____Tax code 391LM
    Jan/17_____3,534.30_____749.46_____347.76_____Tax code 391LM
    Feb/17_____3,534.30_____749.46_____347.76_____Tax code 391LM
    Mar/17_____3,534.30_____749.46_____347.76_____Tax code 391LM

    APR 17 on wards tax code 164L - just no idea why!!
    BIK (annual £6913 (no medical insurance was £736)


    Kind regards and thank you for any help
    MC
Page 1
    • uknick
    • By uknick 14th Jun 17, 11:32 AM
    • 664 Posts
    • 293 Thanks
    uknick
    • #2
    • 14th Jun 17, 11:32 AM
    • #2
    • 14th Jun 17, 11:32 AM
    Have you tried looking at your online tax code calculation using the Personal Tax Account system?


    https://www.gov.uk/personal-tax-account
    • MichelleUK
    • By MichelleUK 14th Jun 17, 12:00 PM
    • 288 Posts
    • 173 Thanks
    MichelleUK
    • #3
    • 14th Jun 17, 12:00 PM
    • #3
    • 14th Jun 17, 12:00 PM
    Could you post the benefit in kind figures that actually show on your P11D?

    You are showing that both your car and medical insurance have stayed the same over two tax years, but HMRC usually increase the car benefit each year and the medical companies usually do too! HMRC will be using the P11D figures, so it is important that you use the same.

    Also, as a safety check, please supply the total taxable pay, total tax and final tax code as shown on your P60 for both years?
    • dakotadveils
    • By dakotadveils 14th Jun 17, 2:01 PM
    • 13 Posts
    • 2 Thanks
    dakotadveils
    • #4
    • 14th Jun 17, 2:01 PM
    • #4
    • 14th Jun 17, 2:01 PM
    2015-2016 Gross salary £42675.04 + BIK £717 (Medical insurance) tax code 1026L
    2016-2017 Gross Salary £43127.60 + BIK Car £5816 and £736 on medical tax code 391LM
    2017-2018 Gross Salary £45k + BIK Car £6913 Tax code 164L
    • dakotadveils
    • By dakotadveils 14th Jun 17, 2:05 PM
    • 13 Posts
    • 2 Thanks
    dakotadveils
    • #5
    • 14th Jun 17, 2:05 PM
    • #5
    • 14th Jun 17, 2:05 PM
    I've used that and my tax is spot on with what I've paid over the year - this is where Ive got confused where this so called £2.8k underpayment has come from. I have no tax coding info for this year from HMRC, I only noticed on my payslip after getting a pay rise and taking home less than before the rise!
    • MichelleUK
    • By MichelleUK 14th Jun 17, 3:06 PM
    • 288 Posts
    • 173 Thanks
    MichelleUK
    • #6
    • 14th Jun 17, 3:06 PM
    • #6
    • 14th Jun 17, 3:06 PM
    2015-2016 Gross salary £42675.04 + BIK £717 (Medical insurance) tax code 1026L
    2016-2017 Gross Salary £43127.60 + BIK Car £5816 and £736 on medical tax code 391LM
    2017-2018 Gross Salary £45k + BIK Car £6913 Tax code 164L
    Originally posted by dakotadveils
    Looking at these and your previous figures, it looks like you have underpaid approx. £310 in 2015/16 and £206 in 2016/17.

    I would suggest you do the following:

    1. As per the post by uknick, check your personal tax account and it will tell you how your current tax code of 164L has been calculated.
    2. Phone HMRC and ask them to send you a P800 for each of the tax years 2015/16 and 2016/17. I presume you already have one for 2014/15 as you mention that HMRC did inform you of the original £15.83 underpayment.
    3. Once you have the P800's, you should be able to check off the details against your P60's and P11D's and see where the difference arises. They may have extra income that you have not included - interest, dividends, taxable benefits etc.

    Hopefully, you will then find out the detail behind the £2.8k underpayment and then you can decide on your next steps.
    • MichelleUK
    • By MichelleUK 14th Jun 17, 3:15 PM
    • 288 Posts
    • 173 Thanks
    MichelleUK
    • #7
    • 14th Jun 17, 3:15 PM
    • #7
    • 14th Jun 17, 3:15 PM
    One last thought....

    Is the £2.8k that you mention, definitely the amount of tax that they say is underpaid....or is it the amount that they have taken from your tax code?
    Last edited by MichelleUK; 14-06-2017 at 3:17 PM.
    • purdyoaten2
    • By purdyoaten2 14th Jun 17, 4:39 PM
    • 621 Posts
    • 271 Thanks
    purdyoaten2
    • #8
    • 14th Jun 17, 4:39 PM
    • #8
    • 14th Jun 17, 4:39 PM
    One last thought....

    Is the £2.8k that you mention, definitely the amount of tax that they say is underpaid....or is it the amount that they have taken from your tax code?
    Originally posted by MichelleUK
    I reckon that you are spot on with your assumption.
    Code has reduced by 227 when it should have increased by 50 - a difference of 277 which translates into a loss of personal allowances of 2770 - not far off the mark!

    Also - from the op - BIK 2017/18 is 6913. Full personal allowance of 11500 less BIK 6913 less underpayment restriction 2800 is 1787 - again not far off the mark in translating into a code of 164L.
    purdyoaten lost his password
    • MichelleUK
    • By MichelleUK 14th Jun 17, 5:22 PM
    • 288 Posts
    • 173 Thanks
    MichelleUK
    • #9
    • 14th Jun 17, 5:22 PM
    • #9
    • 14th Jun 17, 5:22 PM
    I reckon that you are spot on with your assumption.
    Code has reduced by 227 when it should have increased by 50 - a difference of 277 which translates into a loss of personal allowances of 2770 - not far off the mark!

    Also - from the op - BIK 2017/18 is 6913. Full personal allowance of 11500 less BIK 6913 less underpayment restriction 2800 is 1787 - again not far off the mark in translating into a code of 164L.
    Originally posted by purdyoaten2
    I could kick myself that it only occurred to me after I had typed up my long post.....mind you, it was a useful distraction from the gardening that I promised myself I would get done today!
    • dakotadveils
    • By dakotadveils 15th Jun 17, 7:49 AM
    • 13 Posts
    • 2 Thanks
    dakotadveils
    definitely underpayment that they have advised.
    • dakotadveils
    • By dakotadveils 15th Jun 17, 7:52 AM
    • 13 Posts
    • 2 Thanks
    dakotadveils
    Thank you very much for all your help, its much appreciated.
    • haggishopper
    • By haggishopper 15th Jun 17, 1:43 PM
    • 5 Posts
    • 0 Thanks
    haggishopper
    TAX Code
    A friend of mine was told she owed £10,000 in tax and wrote to HMRC requesting that the case was passed to a Senior tax assistant and audited and if they could provide a detailed statement in full for each year. She had 6 years to prove
    Then eventually they reduced the amount to £2500 and again she challenged them to prove the figures to her in writing and then it was all written off and she paid nothing.
    So perhaps an error somewhere. In your case can I suggest that you request in writing that your case is re-asssessed by a senior tax assistant and details made available to you. You could also provide a written calculation for each year simply your income , perks and tax free allowance and the actual tax you paid - refer to your P60 and expense form and send it to them next day guaranteed delivery and ask to have it re-checked.
    keep it simple and retain all proof of posting.
    • Silvertabby
    • By Silvertabby 15th Jun 17, 2:22 PM
    • 1,398 Posts
    • 1,637 Thanks
    Silvertabby
    When I retired and moved my personal allowance to my Armed Forces pension HMRC reckoned that I owed just over £2K and adjusted my code accordingly.

    My tax affairs are extremely simple. I knew that my Armed Forces pension tax was spot on, but when I double checked my Local Authority salary, I made it that I had underpaid by just £2.24.

    I spoke to a very nice lady at HMRC who didn't go so far as to say that 'someone had slipped the decimal point' but that was what she meant. All sorted !
    • Dazed and confused
    • By Dazed and confused 16th Jun 17, 11:35 AM
    • 1,607 Posts
    • 689 Thanks
    Dazed and confused
    dakotadveils

    definitely underpayment that they have advised


    When tax owed is included in tax codes there are two figures, the amount of the tax owed and a restriction/deduction amount by which your tax code needs to change to recoup the tax owed.

    A simple example would be
    Tax underpayment restriction £3000
    Tax underpayment £600

    For a basic rate payer reducing the tax code by £3000 would mean an extra £600 tax is collected (£3000 x 20% = £600)

    For a higher rate payer reducing the tax code by £1500 would mean an extra £600 tax is collected (£1500 x 40% = £600)

    Is the £2800 in your code the debt or the restriction?
    • dakotadveils
    • By dakotadveils 11th Aug 17, 3:03 PM
    • 13 Posts
    • 2 Thanks
    dakotadveils
    Hi everyone, I woudl just like to say a thank you to everyone for there help - its been very much appreciated.

    The matter has finally been resolved today, I now have the correct tax code and a decent rebate coming.
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