Confusion over when I have to pay tax

Spidernick

Sorry, but I'm going to give up after this post (and someone else can try if you still don't get it). I have explained what happens above, but you are not taking it in. Perhaps it is me, but I don't know how else to explain it.


You are confusing your actual tax liability for 13/14 (which you haven't paid, hence it is being collected in 15/16) with amounts based on this for estimated purposes for your tax code for 15/16, estimating your income from these sources for 15/16, i.e these are two entirely separate things.


You are not paying tax twice and, had you paid your 13/14 liability in full in January then your 15/16 tax code would follow the format of that quoted in your OP for 14/15. Of course you are going to pay more tax if some is collected for an earlier year in your tax code!


As I say, I really don't know how else to get you to see this, but believe me you are wrong when you say you are being taxed twice on the same income.

sheramber

So I presumed, at that point, that my deductions from my salary were current earnings + 13/14 p11d + tax owed from my SA 13/14


You assumed wrong so forget that assumption as it is confusing you.


This is my 14/15 Coding notice (Issued in May, effective from June). It includes my 13/14 actual figures - ie those from my SA.

This is how we worked out your tax code:
Your Personal Allowance £10000 (see Note 1 )
employer benefits -£1434 (see Note 2 )
property income -£3353 -£4787 (see Note 3 )although this is the actual figure for 13/14 it is that figure used as an estimate for 14/15. So only collecting any tax due on that amount for 14/15. This figure may be correct or too low or too high. As it is an estimate the final figure will calculated from your 14/15 SA return.
a tax-free amount of £5213 (see Note 4 )
We turn £5213 into a tax code of 521L


Any tax due for 13/14 would not be shown as 'property income' but as 'tax underpaid for a previous year'. There is no such deduction in your 14/15 code number so no tax due for 13/14 has been collected through your code number for 14/15.

turtlemoose

sherambler has hit the nail on why I wasn't getting it - addressing the 14/15 amounts.

What I still don't get (but don't worry I'm not expecting an answer or anybody to waste any of their time!) is why previously HMRC have always expected me to pay last year's tax in the current year, and now they've swapped to wanting a previous year and a current year simultaneously (which is what 2015/2016 will end up being if I don't pay as a lump sum at the point of SA calculation).

sheramber

You didn't have a previous year in 13/14 because you paid it direct.

If your proprty income had been the same as or less than what was included in your code there would be no underpayment at the end of the year. That is the ideal situation that HMRC aim for by icluding the property income in your code number.

Any tax underpaid can only be calculated when you submit your tax return for that year - too late to include in the code number for the next year as the next tax year is already underway before the return is issued after 6 April.

14/15 tax year starts 6 April 2014 but your 13/14 return is only issued after 6 April 2014.

So, the tax due can be collected in your code number for the following year ( if you wish and you submit your return by the appropriate date.)
( 31 December , I think).

In the meantime a restriction for property income for the current year is included in your code in the hope of collecting the tax due.

So estimated property income is included in the code number for 15/16 as well as any underpaid tax due.

If you do not want to have underpaid tax included in your code number for a following year then pay the amount due direct to HMRC.