Underpaid tax for earlier years included in your tax code for 2015-16

romsie

Hello

I am having trouble with my self assessment on the field "Underpaid tax for earlier years included in your tax code for 2015-16 (from your PAYE Notice of Coding). Please enter '0' if there is nothing shown."
The help section says:

Underpaid tax for earlier years included in your tax code for 2015 to 2016
If your 2015 to 2016 tax code was reduced during the year because of a change in circumstances, you may not have paid enough tax. Look at your 2015 to 2016 PAYE Coding Notice. If it includes the message 'our estimate of the underpayment for the earlier part of the year is £xxxxx' then this amount is automatically shown on your return.

I was told before that the figure for this field was supposed to come from my 2014-15 P800. In the P800 there was a "Tax underpaid" amount of £1052.60.
However the HMRC website suggests to look at my P2 instead. On the latest P2/PAYE notice I got, I had an "Underpayment Restriction" of £1258, based on the below calculation;

We previously told you that you owe £251.74 tax from an earlier tax year. To collect this we have reduced your tax-free amount by £1258.00. We expect you to pay tax at 20% on an extra £1258.00 this year and this should collect the amount due (£1258.00 at 20% is £251.74). For more information on tax rates see note 5 below.

From this I would have filled in £251.74 in the 2015-16 self-assessment. I'm really confused that the figures are different - the P800 is dated 2 weeks after the P2, and I suspect it's the correct figure, but I'm unclear why the HMRC's help centre says to take the figure from the P2 instead. I'm also unclear about the nomenclature used: "Underpaid tax for earlier years". So this should be tax I underpaid in 2013-14, correct?
For the record, my only previous P800 was from 2013-14 and has £191.60 underpaid tax. This is the first year I started working so there shouldn't be leftover underpaid tax from earlier years.

I was also told that the following field; "Estimated underpaid tax for 2015-16 to be included in your PAYE tax code for 2016-17 (from your PAYE Notice of Coding)" should be left empty for 2014-15 as I don't have a P800 for 2015-16 yet. That will come after I send the self-assessment. Is this correct?

sheramber

your P800 shows the actual underpayment they have calculated but not all of it may have been included in your code number.
What has been included in your code number is shown on the P2. The code number shown on the p2 should be the same as the code number shown on your P60 and your payslip.

If before the final figures for 2015/16 were known, HMRC estimated , based on the information held, that you would not pay enough tax for 2015/16 they would amend your 2016/17 code number to include that estimated amount to recover that amount.
This would be checked after the end of year figures for pay and tax deducted were known. Any underpayment that showed then would be an actual underpayment not an estimated one.

So you only need to enter a figure for any estimated underpayment included in your code number for 2016/17 as shown on your P2 for 2016/17.

romsie

@sheramber, thanks for your answer, however I am still confused.

So you only need to enter a figure for any estimated underpayment included in your code number for 2016/17 as shown on your P2 for 2016/17.

I think you are referring to the field "Estimated underpaid tax for 2015-16 to be included in your PAYE tax code for 2016-17". Thank you for your answer. However I am mostly wondering about the previous field in the self-assessment, "Underpaid tax for earlier years included in your tax code for 2015-16".
For this one, the previous P2 from 2015-16 had an estimated number to calculate the tax code. But, I know already the final (not estimated) number from the 2015-16 P800, correct? So what should I use, the P2 estimated number used in the 2015-2016 tax code, or the final number from the 2015-16 P800?

Dazed_and_confused

The clue is in the question, unpaid tax for earlier years included in your code

From your original post it sounds like £251.74 is the figure you're looking for.

If you have received a P800 for a tax year you have also completed a self assessment return for then you need to contact the HMRC about this ASAP as you should only have one or the other not both

romsie

Thanks @Dazed&confused. What about "Estimated underpaid tax for 2015-16 to be included in your PAYE tax code for 2016-17 (from your PAYE Notice of Coding)" then, should that be the estimated figure from the 2016-17 P2?
And no, I don't have a P800 for 2015-16. I have one for 2014-15. That would count for "earlier year(s)" vis-a-vis 2015-16 though, would it not?

Dazed_and_confused

But in your op you said,

I was told before that the figure for this field was supposed to come from my 2014-15 P800. In the P800 there was a "Tax underpaid" amount of £1052.60.

romsie

Yes, I have the 2014-15 P800. The question is for the self-assessment for 2015-16.

I did make a mistake in writing "From this I would have filled in £251.74 in the 2014-15 self-assessment", I meant 2015-16 self-assessment (corrected now).

To clarify I have 3 numbers:
- £251.74 from the 2015-16 P2, dated July 2015 (which was used to calculate my 2015-16 tax code)
- £1052.60 from the 2014-15 P800, dated August 2015
- £865.00 from the 2016-17 P2, dated July 2016 (used to calculate my 2016-17 tax code)

I *think* that I need to fill in £251.74 for the "Underpaid tax for earlier years included in your tax code for 2015-16" field, and £865.00 for the "Estimated underpaid tax for 2015!-16 to be included in your PAYE tax code for 2016!-17", but I am confused by both the different number in the 2014-15 P800 and what I've been told by company's tax advisor (i.e. put in £1052.60 in the first field and £0 in the second one; but we had very little time and I'm not sure they were paying attention)

Dazed_and_confused

I would go with £251.74 and on next year's return it would be £865.00.

The only time you would enter something in the Estimated underpaid tax for 2015!-16 to be included in your PAYE tax code for 2016!-17 box would be if your final tax code for 2015:16 was reduced and the HMRC estimated you had a underpayment for 2015:16 which has then been included in your 2016:17 tax code.

You need to look through your 2015:16 P2 to check for this but that it is much less common than the unpaid tax for earlier years entry being required

Dazed_and_confused

One thing you might want to check with the HMRC is why your P800 shows tax underpaid of £1052.60 but they are trying to collect £1116.74 (251.74 + 865.00) as this is £64.14 more than your P800 says you owe