strange change of tax code

Burlesque_Babe

hiya Kelly - sorry, I didn't mean to sound flippant - I'm on less than 20k a year for my salaried job and that is 3 part time posts all added together so £787 is a lot of money to me

I'll wait until the letter of explanation comes and then get back on the phone, if everyone keeps insisting I have to have a rebate I'll just put it aside in a savings account until it all gets linked back together and it is asked for again.

John_Pierpoint

Today I got a new notice of coding for this 09/10 tax year.
In my case it works the other way round, my PAYE code has been slashed by 297 (ie 2970 extra will be taxed to raise something approaching 600 in extra tax in 4 months).

I am also self employed earning a modest amount that wobbles around varying by plus or minus 2 thousand on an average of say 3 thousand, depending on luck and how hard I work.

My tax affairs are a bit complicated in that I own shares, savings a bit of overseas, a small rental income and the whole lot adds up to something just over the upper rate starting level, so in March I correct that by bunging some money into a private pension fund.

I always tick the "charge me don't bung any excess onto next years PAYE" box, as I prefer to account for each year in a way that I can understand.

This year the figures work out that my self assessment payments in January and July,
based on a poor year in 07/08 look low, especially as the payments in January and July 08 have turned out to understate my actual 08/09 tax by 1000 GBP (I did well riding the high "bond" offers from the banks as the scrabble for deposits developed and the government forced up interest rates.)

09/10 won't be a good year and 10/11 might look really bad if the current low interest rates continue.

However the system has a mind of its own, just like the computer that tries to guess the level of direct debit to charge you through winter and summer and usually gets it wrong in the electricity company's favour!
The tax system has decided that my regular payments are too low to stop me ending the year owing tax, so it is now upping the tax take.
I'm not particularly bothered because I have a big cushion of savings and the figures will all come out right eventually BUT I now understand why sudden changes like this, for tax credit changes etc. cause havoc for families living on a hand to mouth weekly or monthly budget.

I think the system, like the economy, is now inherently unstable.

System

Burlesque_Babe wrote: »

this is just how it is (apart from having a bit of WTC benefits)

WTC is not taxable, by benefits Rolo Tomasi meant medical, fuel or company car provided by your employer.

mcguireuk wrote:

From what you have just added it is really worth calling the tax office. It way well be that they have collected part of this through the tax credits system. Reducing the amount you receive to collect what is owed

When did HMRC start collecting unpaid tax through the tax credit system?

Tarasam

mcguireuk wrote: »

From what you have just added it is really worth calling the tax office. It way well be that they have collected part of this through the tax credits system. Reducing the amount you receive to collect what is owed.

This is not correct, no underpaymt of tax is collected via tax credits, for one the systems dont talk to each other, there was a plan to collect really outstanding overpaid tax credits through a PAYE tax code but i've never seen an example of this ever during my day to day work.

John_Pierpoint

Another example of joined up government:rolleyes:

Burlesque_Babe

update: got all the tax back in my salary today :rolleyes: and my tax code is up to 647L.

Also got a letter in the post saying following my call to them - a software problem resulted in them removing the 07-08 underpayment from my 09-10 tax code.

They hope to be in a position to re-instate it before the end of the year, or to arrange to carry the sum forward for a future financial year.

cock and up come to mind. I'm going to put it in a savings account until they make their next move, which I guess will be my tax code for 10-11 and then might just pay it all back through the online facility.