The right tax code??

zaksmum

Got an update today from HMRC. Confused again now....!

The letter says "thank you for your telephone call (date). I have reviewed your liability based on the call and can confirm the appropriate amount of tax has been deducted for 2009-10.

I do not propose to issue a tax calculation unless you request one. Where one is issued, it is likely to show a small underpayment as deductions of tax are usually rounded down.

Once a calculation is issued the underpayment will have to be recovered usually by inclusion in the coding for the next tax year.

If you contact us, please quote your NI number and provide a daytime phone number."

So we don't understand this at all. They issued O/H with a revised tax code of 367L saying they'd recover the underpayment this way - but today's letter seems to be saying they won't bother now. I'm sure that can't be the case though!

And of course the appropriate amount of tax for 09-10 HASN'T been deducted...how could it have been if he was getting taxable Carers Allowance and not at that time paying the tax on it??

Can someone please advise before I feel obliged to hit the bottle??? Thanks!

Mikeyorks

zaksmum wrote: »

So we don't understand this at all. They issued O/H with a revised tax code of 367L saying they'd recover the underpayment this way - !

See my post #3. That 'underpayment' is for the current year 10-11. And should clear it in the year (provided there isn't a 'Month 1' after the code)

I would tend to agree that on the face of it there should be an underpayment for last year 09-10. But the phrase ' don't look a gift horse .....' springs to mind?

wmum66

Did the tax calculator for last tax year:

Here are the results:o
The number 630T in your tax code...

The tax code you've input says your tax-free allowance was...£6300 - £6309According to my salary and age there is a difference of £175

my new tax code for this year is 647L

am i due a rebate or due them?

zaksmum

Oh, thanks again Mikey, you've been so helpful.

So you think there isn't going to be anything to bother with regarding the underpayment for 09-10? I do totally agree with you about the gift horse...but surely HMRC must know there's tax owing for that period? We told them as much. I'm concerned that there may be some comeback on the matter and we don't want to fall foul of the taxman for sure.

There is definitely tax owing for 09-10 and I can't see the taxman having a sudden burst of generosity...so why are they saying there's no liability?

We are certainly not going to persuade them to claim any tax we owe, but I just have the feeling something is wrong if they are not actively pursuing it! I've never heard of a case where they say you don't owe tax when you do - and have told them so!

Mikeyorks

zaksmum wrote: »

There is definitely tax owing for 09-10 and I can't see the taxman having a sudden burst of generosity...so why are they saying there's no liability?

Can't answer that. Can only conjecture that as they're already in the process of issuing reconciliation statements for 08-09 and 09-10 .... they've decided not to feed that extra income back into 09-10? Simply concentrating on getting OH sorted for 10-11 and subsequent years.

You won't 'fall foul' ..... as you've advised them. Worst that can happen is you do - subsequently - get an underpayment for 09-10 at sometime in the future. I would just let it lie at that?

de1amo

i love the reconciliation accounts the hmrc seem to spew out after a long period of temporary tax numbers-i had 4 years worth of part time work that they suddenly cast upon me. The statements came in 2 envelopes and took some working out-to this day i am just summising they were correct because things stretch back so far--like the op i am on a low number due to a pension/benefits etc--i dread trying to feed it into the tax calculator here!!

zaksmum

Thank you Mikey. I suppose the worst that can happen, as you say, is that we will have to pay the outstanding amount then if at some stage in the future they do decide it's worth chasing up.

I'll make sure I keep the letter we got yesterday just in case...at least it's proof that we have actually informed them and any errors that are made from now on will be theirs.

Thanks very much for your advice.

de1amo, it's a nightmare to work it all out, isn't it? Especially after four years. You just have to assume - or hope! - they know what they are doing at HMRC!

Did you have to pay all the tax they said you owed in one go or did they allow you to make instalments?

Mikeyorks

zaksmum wrote: »

I'll make sure I keep the letter we got yesterday just in case...at least it's proof that we have actually informed them

Fairly essential!

They're not as bad as their press would make them out to be ..... but it is fairly essential to keep P2s / P11Ds and all such associated rubbish handy for a few years!

I can't believe people don't check the Coding Notices. Perhaps if HMRC headed them 'Statement of how much Tax we will take off you next year!!' ......... they might get checked a bit better!

de1amo

They just put me on a tax code of something like 9l for a year to absorb the underpayment-it wasnt a lot off tax because i am only on about 47l when i am given my full allowance-my pension bears all the tax and the other things are paid gross. i have thought about doing the assessment here but i think it is a bit simplistic compared to 'state' of my affairs.--have you ever thought about consulting the cab because they have some pretty knowleagable people about the ins and outs of tax and benefits--they have helped me in the past!

zaksmum

de1amo wrote: »

They just put me on a tax code of something like 9l for a year to absorb the underpayment-it wasnt a lot off tax because i am only on about 47l when i am given my full allowance-my pension bears all the tax and the other things are paid gross. i have thought about doing the assessment here but i think it is a bit simplistic compared to 'state' of my affairs.--have you ever thought about consulting the cab because they have some pretty knowleagable people about the ins and outs of tax and benefits--they have helped me in the past!

I would have consulted the CAB had it not been for the excellent advice I was given on here, especially from mikeyorks who has been very knowledgeable and helpful.

OOh...just realised I've been calling him Mikey when in fact it's mikeyorks...as in Yorkshire??

Sorry Mike!!