Why do i owe tax???

geministar2008

Hello

A few weeks ago i received a letter from the HMRC stating that my tax code had been lowered to 555L from 647L as i owe tax from a previous year for the sum of £260. The letter did not state how i owe this sum or where they have got the amount from.

Does anyone have any ideas?

I have an ongoing battle with owing working tax credits from a previous year, could it be in connection to this? Although i do not think the amount the inland revenue has quoted is the amount i owe in working tax credits.

I have wrote to the inland revenue about 4 weeks ago but have received no response, i sent the letter via recorded delivery and the letter was delivered. I can never get through to them on the phone.

Any advice would be great.

Thanks :mad:

AuntyCat

It won't be the tax credits.

Do you have any deductions in your code for benefits, company car etc. If that was wrong in last years it may cause an underpayment.

If HMRC have assessed last year & found an underpayment they should have sent you a copy.

Mikeyorks

geministar2008 wrote: »

Does anyone have any ideas?

Regret not - other than the fact the underpayment is around £184 - and it's nothing to do with the tax credits. It's purely PAYE related. They should (on the Coding Notice) tell you which year it is?

If you want to post up all your figures for that year (Gross pay / tax deducted / Code number from your P60. And any P45 figs relating to the year. Any interest paid gross) ..... someone will cross check it for you.

As - at the last count - most HMRC offices had over 2 month's post on hand - you won't be getting a reply too quickly.

suso

Possibly a P11d from the last financial year has just been submitted, and it shows you are receiving a benefit in kind and wasn't taxed correctly on it.

so its adjusting your code to collect the correct amount.

In the coding notice does it mention any benefits in kind, eg medical, car, beneficial loan etc.

geministar2008

i do not receive any company benefits like cars etc and i was not given a notice by the Inland Revenue.

suso how do you mean a benefit in kind?

Also could it be that perhaps and old employer didnt update my tax code accordingly?

I'm very confused.....

AuntyCat

Benefits in kind are things like medical benefit paid by your employer for you.They are reported each year on a P11d, if you had any you should have received a copy.

If you did change jobs during the year it could be to do with that. Someone could work it out for you if you wanted to post full details of your income etc.

geministar2008

last tax year i was working for one employer from May - September i became ill at the end of July and was receiving SSP. This was my only employment during the last tax year. My new job started on 2nd April 2010.

I will have to dig out any letters from the HMRC but my first knowledge of the tax code change was recently.

System

If you did not receive any benefits in kind (medical insurance cover, company car, fuel allowance etc) from your employers then it is possibly down to one of the following scenarios.

1. HMRC changed your code in 09/10 to a lower code and because it was issued during the year it was issued on a non-cumulative basis. This would have meant the correct tax was deducted from the moment it was operated but there would be taxed owed from April 09 to the date of operation. This is called a potential underpayment and would have been mentioned on the coding notice they sent out when they reduced the code. HMRC will only know if that underpayment stands when they reconcile 09/10 and they would adjust your 10/11 code when that is done.

2. You did not pay enough tax in a year earlier than 09/10 and received a calculation telling you so and explaining that it would be deducted via your code in a later year.

HTH

Bernice50

H Gemini Star
My tax code was changed a few months ago identical to yours...and I was approx. £23.00 less on payslip - not a lot I know but it all counts and then I noticed I had been given the new tax code. I rang tax office who said initially I had to query this with my payroll office!! I did this and was referred back to tax office who said "I had received a benefit in kind??? Never heard of these but as a previous thread mentioned company car, fuel etc I don't receive this either and then a colleague said that if you wear any type of uniform/overall for work purposes you are entitled to claim...I have never claimed this benefit and nor wish to as I no longer where a uniform...The Tax office then did change the tax code back to the original one and I did get my money in the next month's salary. Hope this gives you some encouragement that some tax officials do listen and amend codes promptly - Wishing you luck!

geministar2008

oh this is so confusing, i cannot find any paper work with any mention of me owing tax the only thing i have had is the letter stating they have lowered my tax code. I CANNOT GET THROUGH to them on the phone, im just on hold for ever. Does anyone have a number i could call?

Thanks

Gertie_Walker

As others have said, if you could post: which year the underpayment relates to (per the notice of coding) and your total pay and tax for that year, and your code number for that year, someone can work it out for you.