Can you please help check a few things for my self assessment?

janeskips

My 15-16 tax coding was changed in October and there was no such line. I don't owe tax relating to years before 15-16. This line only appears with my 16-17 tax code, starting with my first tax code received in January and a second more recent one in July (the underpayment amount is the same, the change was due to another benefit line).

The change in October to my 15-16 tax code was a reduction of 2000. I believe because this change was applied halfway through the tax year, PAYE only deduct half of the annual total due by April this year hence 1000 still remains. In other words, rather than taking 2000/6 for the remaining 6 months of the tax year, HMRC only took 2000/12 as if the tax code had been changed at the beginning of the year. Is that correct?

I am now doing my SA for 15-16. HMRC owes me around 3000 without this underpayment and I don't mind how and when it is settled, as long as I don't pay twice unnecessarily or incorrectly under wrong year or section. As I am already doing an SA, I would prefer to clear this amount due rather than have it linger in my 16-17 tax code if that is a correct thing to do. In this case, I believe the amount (400 net tax, not the 1000 gross) should be in box 8 ("Underpaid tax for 2015–16 included in your tax code for 2016–17"). My 16-17 does not mention the year, it is just a general comment saying "owed in a previous year".

[Deleted User]

janeskips wrote: »

My 15-16 tax coding was changed in October and there was no such line. I don't owe tax relating to years before 15-16. This line only appears with my 16-17 tax code, starting with my first tax code received in January and a second more recent one in July (the underpayment amount is the same, the change was due to another benefit line).

The change in October to my 15-16 tax code was a reduction of 2000. I believe because this change was applied halfway through the tax year, PAYE only deduct half of the annual total due by April this year hence 1000 still remains. In other words, rather than taking 2000/6 for the remaining 6 months of the tax year, HMRC only took 2000/12 as if the tax code had been changed at the beginning of the year. Is that correct?

I am now doing my SA for 15-16. HMRC owes me around 3000 without this underpayment and I don't mind how and when it is settled, as long as I don't pay twice unnecessarily or incorrectly under wrong year or section. As I am already doing an SA, I would prefer to clear this amount due rather than have it linger in my 16-17 tax code if that is a correct thing to do. In this case, I believe the amount (400 net tax, not the 1000 gross) should be in box 8 ("Underpaid tax for 2015–16 included in your tax code for 2016–17"). My 16-17 does not mention the year, it is just a general comment saying "owed in a previous year".

I completely agree with your approach in the last paragraph. I also think that I may have confused you by stating my own example with reference to a previous year. Ignore!

Dazed_and_confused

My 15-16 tax coding was changed in October and there was no such line. I don't owe tax relating to years before 15-16. This line only appears with my 16-17 tax code, starting with my first tax code received in January and a second more recent one in July (the underpayment amount is the same, the change was due to another benefit line).

The change in October to my 15-16 tax code was a reduction of 2000. I believe because this change was applied halfway through the tax year, PAYE only deduct half of the annual total due by April this year hence 1000 still remains. In other words, rather than taking 2000/6 for the remaining 6 months of the tax year, HMRC only took 2000/12 as if the tax code had been changed at the beginning of the year. Is that correct?

It looks as though your code was put on an emergency basis last October which means the new code is used going forward but your tax isn't re-calculated going back over the previous months from April to October. If the code was reduced by 2000 and you are a higher rate payer then this would equate to an underpayment of £800 (2000 x 40%). As the new code was used for 6 months from October - April then that would leave around £400.

It seems this must be what has been included in your 2016:17 tax code and therefore needs to be included on your self assessment return as this matches the description from your original post,

The description for #8 (Underpaid tax for 2015–16 included in your tax code for 2016–17 – enter the amount shown as estimated underpayment for 2015–16 from your P2 PAYE Coding Notice) fits the description. The online help was not saying this, it was always referencing 15-16 tax code. Should I put the gross amount e.g. 1000 on the front of my latest 2016-17 P2 or the tax owed detailed on the back in the notes section e.g. 400.?