can anyone explain this underpayment please?

note3

Hi, I earn approx £16,000 pre tax. I receive medical benefit from employer (benenden membership) for which I am required to pay a £15 tax benefit on.

I received a notice at the end of last year saying I had underpaid tax by approx £357 due to my medical benefit being less than the original figure declared by my employer.

I tried asking the man who answered at the tax office and to be honest he hadn't a clue and said it was probably underpaid tax from a second job I had at the time. Well if that was the case why would they have listed the reason in the letter as being due to the benenden coverage?

Could someone please enlighten me as to what's happened as I'm worried I'm going to have to find money I don't have to pay something which might not be right anyway??? Very confused and annoyed to be honest if it means this underpayment was because my employer messed up??

Darksparkle

What tax year is it for?

What was your total taxable income for that year?

What tax did you pay in that year?

note3

Darksparkle wrote: »

What tax year is it for?

What was your total taxable income for that year?

What tax did you pay in that year?

2014/2015
PAYE income £17,528. Tax paid £1167.80
Medical insurance payments £98
Income after taking away deductions £17626
Personal allowance £10000
Tax chargeable on £7626 = £1525.20 (20% rate)
Tax underpaid = £357.40
Reason 'the amount of medical expenses benefit included in your PAYE code was lower than the amount taxable'

Gizmo247

... and did you get P800 calculation?

Darksparkle

note3 wrote: »

2014/2015
PAYE income £17,528. Tax paid £1167.80
Medical insurance payments £98
Income after taking away deductions £17626
Personal allowance £10000
Tax chargeable on £7626 = £1525.20 (20% rate)
Tax underpaid = £357.40
Reason 'the amount of medical expenses benefit included in your PAYE code was lower than the amount taxable'

Not sure what your issue is with that explanation?

Why do you believe it is incorrect? Does the pay or benefit not match your P60 and P11D for the year?

What tax code was used?

Gizmo247

Yes, by the looks of the calculation you have been paying too little tax even for your base salary. Plain and simple. Nothing to do with the medical benefit although that reason may have been prompted by the change in your tax code when the P11D was filed. Your company may have been using the wrong tax code in the first part of the year and when the new tax code was generated then probably switch to a non-cumulative tax collection which would yield an under payment.

You should be able to go back through your payslips and see what the tax code was used for each month.

chrisbur

You mention a second job but I can only see figures for total income. Can you advise tax code used, pay and tax for each job separately.

ThePants999

£98/yr is some bloody cheap medical insurance...

notbritishgas

ThePants999 wrote: »

£98/yr is some bloody cheap medical insurance...

Benenden healthcare is £8.45 a month.

However it is not the same sort of cover as the likes of bupa

note3

Gizmo247 wrote: »

... and did you get P800 calculation?

Hi, the figures I gave in my second post were the ones from the p800 calculation.

I'm off work at the mo and just moved so will have to hunt through for tax code I was on. I suspect I need to contact work now and ask what figure they gave to the taxman for the medical benefit as I've received this benefit for nearly a decade so I can't understand why it would suddenly be wrong one yr.

My second job was sporadic pay and through an agency who I've checked definately sorted out tax on my behalf as I was concerned that maybe this had caused the underpayment.

It's frustrating as I naively thought being PAYE made things like this straightforward without surprise tax bills

Gizmo247

Usually your taxable benefits in one year will be reflected in the tax code for the following year i.e. your 2015/2016 tax code. If you are quick, you should be able to access you online HMRC Personal Tax Account to view your 2015/2016 tax code and so you medical benefits taxable value.