Did I pay the correct amount of PAYE tax last year?

zygurat789

jamesbogiant wrote: »

Yeah i got something similar telling me they had estimated my "other income" as £30. Not sure what my "other income" could be when I only have one source of income, but I couldn't be bothered to argue for the sake of £6.

That would be £12, tax at 40%.
If you don't challenge this HMRC will assune they have underestimated and increase it next and subsequent years.

pinkteapot

twig1 - I have to pay the underpayment as a lump sum by 24th October.

The bonus obviously wasn't in my salary but HMRC were aware of it in that it was included in the total earnings given on my P60 for that year. As I said though, someone else (not on here) mentioned that people being asked to repay underpaid tax had got out of it so I googled, found the A19 stuff, and rapidly realised it didn't apply to me. Didn't hurt to look if there was any chance of saving myself that amount of money!

PlutoinCapricorn

PinkTP, I think it is best to investigate all the avenues before admitting defeat. You now know that you have done all that you can, not to mention having learned a lot about PAYE.

There are some tax and PAYE experts on MSE, and it is good to get a variety of opinions and experiences. I think there was a recent thread about getting a council tax debt written off: the majority said it never was, but one poster said that their CT debt had been!

What a pity that you had no in-house expertise to draw on.

suso

As usual its all in the detail.

If HMRC have issued out a tax return, and you are referring to a bonus.

Did the bonus take you earnings over 100,000. If so then the reason for the underpayment would have been due to the reduced personal allowance. (If it was a one off, then HMRC would not have known about it until the P60 was sent through.)

If it is the case, then what code are you on at the moment, and what do you expect to earn this year, it might be that you are on a code that is expecting you to receive a similar amount of income again.

twig1_2

I would check your new coding as they may make an adjustment on your coding thinking for 2012/2013 you will get a similar size bonus this year and that would result in a overpayment of tax

suso wrote: »

As usual its all in the detail.

If HMRC have issued out a tax return, and you are referring to a bonus.

Did the bonus take you earnings over 100,000. If so then the reason for the underpayment would have been due to the reduced personal allowance. (If it was a one off, then HMRC would not have known about it until the P60 was sent through.)

If it is the case, then what code are you on at the moment, and what do you expect to earn this year, it might be that you are on a code that is expecting you to receive a similar amount of income again.

sleepless_saver

pinkteapot wrote: »

Thanks all. So long as I haven't underpaid by £2,600 again (not getting over it anytime soon ). So it's literally just a case of splitting my gross income down into the tax-free, 20% and 40% bands, calculating the tax in each band and adding them up? Somehow thought it would be more complicated than that.

I always find this site http://listentotaxman.com/index.php very good for checking my income tax. Saves doing the arithmetic.;)

pinkteapot

twig1 wrote: »

I would check your new coding as they may make an adjustment on your coding thinking for 2012/2013 you will get a similar size bonus this year and that would result in a overpayment of tax

They did initially - got a 0T code. Had a panic, phoned them up, and they explained that they expected me to earn over £100k and therefore weren't giving me a personal allowance.

I said that my earnings for 2012-13 would be around £45k gross and was there anything they could do or would I have to reclaim the tax after the end of the tax year. They issued a 'normal' tax code. *phew*

I do hate the way letters from HMRC turn up with bad news with very little explanation. Starting to develop a phobia about their envelopes.