Tax code recalculation

aroominyork

I'm trying to work out how HMRC have changed my tax code and wonder if someone can help - I'd like to understand the calculations. I claimed higher rate relief for 2017-18 (for charity and SIPP contributions) and they increased my basic rate level from £34,524 to £44,292. The numbers are:
- I was originally given tax relief on £819 charity donations but donated £1,133
- I made a gross SIPP payment of £9,375
- I had untaxed interest of £1,244 (of which £500 should have attracted personal savings allowance).

Given that, how do they get from £34,524 to £44,292 please?

SeniorSam

Usually the tax claim has the calculations clearly show on the assessment. You can easily get an answer by calling the phone number on the form, but it may be that the figures they were given differ in some way.

Sam.

BoGoF

We're not getting the full picture here.....the basic rate band was £33,500 so why is yiur calculation saying it was increased from £34,524? Is it an amended calculation.

Is the charitable donations figure quoted by you the net amount paid by you.

Income details per calculation?

aroominyork

BoGoF wrote: »

We're not getting the full picture here.....the basic rate band was £33,500 so why is yiur calculation saying it was increased from £34,524? Is it an amended calculation.

Is the charitable donations figure quoted by you the net amount paid by you.

Income details per calculation?

I understand part of it now. I had £819 net charity donations included in my tax code which made it £33,500 + (819/0.8) = £34,524. The additional donations added (1133-819)/0.8 = £393. Then add my gross SIPP to reach the revised basic rate tax allowance of £44,292.

It’s the refund amount that confuses me and I’d rather ask here than have telecons with HMRC; they have better things to do with their time and this post might help someone else.

My gross taxable income was £55,361 and I paid £10,636 through PAYE. How do I get from there to £1576 refund? I assume part of it to do with paying tax on the £744 (after PSA) savings. There is no calculation on the assessment.

If no-one is interested in this I will understand!

BoGoF

Was there any underpayment brought forward from an earlier year. What was your tax code for 17/18?

Dazed_and_confused

I think the op is getting things mixed up.

The thread is called "Tax code recalculation".

A new tax code would be for 2018:19, the current tax year, and would never include tax relief for gift aid or pension relief from 2017:18. Any entries in the current years tax code are just to allow provisional tax relief for the current year.

The op should get a P800 calculation for 2017:18 which explains how the £1576 refund was calculated.

aroominyork

Dazed_and_confused wrote: »

I think the op is getting things mixed up.

The thread is called "Tax code recalculation".

A new tax code would be for 2018:19, the current tax year, and would never include tax relief for gift aid or pension relief from 2017:18. Any entries in the current years tax code are just to allow provisional tax relief for the current year.

The op should get a P800 calculation for 2017:18 which explains how the £1576 refund was calculated.

You may be right. The notice just says "HMRC have increased the amount of tax you pay at a basic rate from £34,524 to £44,292. This gives you higher rate relief for charitable donations or personal pension contributions (or both)." I'll not be happy if it is for 2018/19 as I don't want an extra bit in my salary each month - which could get spent - which is why I always claim after the FY end. If they have changed my code for the current year, can I ask them to reverse it?

Dazed_and_confused

By "notice" do you a notice of coding?

If yes then it is definitely provisional tax relief for 2018:19. You cannot receive tax relief for gift aid or personal pension payments relating to 2017:18 in your 2018:19 tax code.

Yes you should be able to tell them to amend your code. I guess they want to try and get you to pay the correct tax during the year but if you only expect to pay much smaller gift aid/pension contributions they would presumably need to amend your tax code.

If there is a change of plan later in the year you could of course conveniently forget to tell them until the tax year is over and you can get any refund due via a similar lump sum.

sheramber

Have they changed your code number for 2018/19 and you have had a refund through your salalry or have you had a repayment cheque?

Dazed_and_confused

Pretty sure it's cheque or BACS refund for £1576 for 2017:18 and a new tax code for 2018:19

aroominyork

I wrote (a letter) to ask for an FY18 refund and was notified of the refund and new tax code through my online Personal Tax Account. So assuming my salary this month shows the new tax code I will ask them to revert it, and the P800 will show me how the refund was calculated. Thank you all - I think that takes it as far as I need.