benefit of tax free allowance more than once

duryard

Hi.

I have a lovely letter from the HM Revenue and customs.

asking me for nearly £600 (which I dont have)

the reason they are asking for this money is "BENEFIT OF TAX FREE ALLOWANCE MORE THAN ONCE"

I am 58, working on a income of about £400 a week Gross
I have a MOD pension of about £600 a month
I have a war disability benefit of about £200 a month.

I have been employed as opposed to self employed since sept 2005.

I have googled BENEFIT OF TAX FREE ALLOWANCE MORE THAN ONCE with no results. Not even on the HM Revenue site is it even mentioned???

I would of thought that this type of error would of been down to whoever was employing me at the time in question which seems to be 2007-08.

p00hsticks

First check that the letter is legitimate and not a scam...(how are they asking you to pay the money ?)

Assuming it is legitimate, then it sounds as if both your employer and pension provider have been taking your personal tax allowance into account when paying you, so that you've ended up paying too little tax.

Check what tax code is shown on your payslips and pensions statements from the period in question. I'd expect one to be something like 647L (the basic personal allowance for this year - for previous years it will be slightly lower), meaning that everything above £6,475 will be taxed, and the other to be BR, indicating that the whole amount will be taxed at the basic rate.

If both are 647L (or the equivalent for the years in question), then you've erroneously had two tax allowances.
Your emplyer won't know you get a pension, and your pension provider won't know if you work - they simply apply the tax codes that HMRC tells them to when paying you. HMRC should have sent you coding notices telling you what tax codings they have allocated to you and how they have worked them out. I'm afraid that it's up to you to check a) that the calculations are correct and cover all your income and b) that your employer / pension provider is applying the code that HMRC has allocated.

If the letter doesn't detail exactly why this error has arisen, contact HMRC and ask them to explain. If you do owe tax, they may let you pay in installments if you ask them.

See here for details of tax codes;
http://www.hmrc.gov.uk/incometax/codes-basics.htm

duryard

It certainly looks legite Says my tax code is 948/93p and it has my ni number no payment method is suggested except to say that they will contact me after dec 2010???

kazzah60

as P00hsticks says - quite likely your employer and pension departments have all been applying your tax allowance to everything
hubby received a letter on Feb 5th asking for £2816.83 before February 24th for the same reason!!

luckilly they are happy to accept re-payments of £100 per month - hubby says he thinks they were just happy to have a person NOT querying the amount owed ( we had checked it before hand of course and it was correct)

on the correspondence hubby received it did say that underpayments of less than £2000 could be repaid by having a new tax code to take into account the re-payments - I would phone them and ask if I were you
karen

telboyo

Call HMRC and ask them to explain, they will help. Forget anything you have ever heard about call (contact) centres. If you talk to them in a civil manner and "smile" down the phone they will be so happy that they will do their utmost to help you and not fob you off.

duryard

Written to tax office today asking for a explantion please.

I have been recieving my MOD pension at BR since 1999 but have not checked the coding of late, could be their error?

I have been recieving war disability since before that, as it comes from DSS I have assumed it was correctly coded. (will check)

I have been with my current employer for 3 years so will phone personal in the week to check up on them.

Thanks for all your replies

telboyo

if your tax code is 948 you can earn £9400 p.a. before paying tax.
Your mod pension is paid to you after 20% taken of already with out taking your allowance in to account.

Look at all your p60s for the years concerned and add up all the "Gross/before tax amounts" subtract 9400 from that.
Multiply the remaining balance by 0.20 and that will be all the tax you should have paid.

soylent_pink

948/93P will not be the tax code, it will be the PAYE ref for your pension provider. Do not subtract 9400, it will be more like 6475 if you are under 65.