Underpaid tax on self assessment

Jonah01

Hi,

I fully understand this question (i hope)
"Underpaid tax for earlier years included in your tax code for 2014-15"

example - tax i owed in the 2012/2013 which i let HMRC take from my wages via my tax code in 2014/2015.

What scenario would the next question apply to?

"Underpaid tax for 2014-15 included in your tax code for 2015-16"

You don't know what your underpaid tax is until you've done your tax return so was curious about this question although it doesn't apply to me at the moment.

Thanks

PlutoinCapricorn

Some of their questions could be better phrased: I think it means that IF you need to pay some tax, do you want it to be done via PAYE or not?

Skint_yet_Again

"Underpaid tax for 2014-15 included in your tax code for 2015-16"

If your tax code for 2014-15 was reduced during the 2014-15 tax year there could be an estimated underpayment and this would be detailed on the notes on the tax code form P2 for 2014-15. Do you have a P2 for 2014-15 ?

Have you received a tax code form P2 for 2015-16 ? If so what is the tax code and does it show any reduction for tax unpaid ?

Jonah01

Hi,

No this question doesn't apply to me at the moment I was just curious. So are you saying HMRC send out code changes for estimated underpaid tax within the current year? I thought they just wait until your tax return is in, isn't that the point?

I am struggling to work out a scenario of when this question would apply?

Cheers

PlutoinCapricorn

Why do you need to complete a tax return? Are you self-employed in addition to being on PAYE? Have you perhaps still got unpaid tax from previous years to carry forward?

Jonah01

I am just simply curious to this question when completing the 2014/15 tax return. It doesn't apply to me but I'm confused how you can have underpaid tax for the year you are submitting.

"Underpaid tax for 2014-15 included in your tax code for 2015-16"

Skint_yet_Again

Jonah01 wrote: »

Hi,

So are you saying HMRC send out code changes for estimated underpaid tax within the current year?

Yes

Jonah01 wrote: »

I thought they just wait until your tax return is in, isn't that the point?

I am struggling to work out a scenario of when this question would apply?

Cheers

If a 2014-15 tax code was reduced for any reason part way through the tax year - for example an increase in deductions such as company benefits or a reduction of expenses claimed - the tax code has to be changed to collect the right PAYE tax for the remaining months but the tax code would not be backdated to 6 April to collect the extra tax for the earlier period

The estimated amount for the earlier period may be collected in the 2015-16 tax code

I hope this makes sense

PlutoinCapricorn

Box A272: If, because of a change in your circumstances, your 2014–15 tax code was reduced during the year to 5 April 2015,
you may have paid too little tax for the time before your code was reduced. Look at your 2014–15 PAYE Coding Notice for
the message: ‘Our estimate of the underpayment for the earlier part of the year is £xxxxxx. We will normally collect any
underpayment through your Self Assessment balancing payment. This will be calculated when your tax return for the year is
processed’. But if you asked for this tax to be collected through your tax code for 2015–16, enter the amount in box A272.

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/401769/sa110_notes_2015.pdf

Jonah01

All makes perfect sense thanks to you both.

The only changes to my benefits is the value of my Bupa bik. I normally just let HMRC take what they think the amount was for the previous year and then I enter the new amount from my plld on my return.

If I told HMRC part way through the year and they adjusted my code I see how this scenario would then come in.

Cheers again.