Tax code personal allowance

Mr_Pegs

I am retired with a personal tax allowance of £12,500.00 starting 6th April 2019.I have checked my tax code for the up and coming tax year starting 6th April 2019 and I have been give a tax code of of 1220L. I have been in contact 3 times with the tax office twice I spoke with general operatives once with a manager. I queried why my tax code personal allowance was £12,200.00 as opposed to £12,500,00 the new allowance for next years tax personal allowance. I was informed that due to having a grand total of £298.00 interest per annum (prediction ) from saving accounts disclosed by my bank. I explained to the tax office that it was my understanding that basic tax payers can earn up to £1000,00 tax free over that amount you are taxed on the extra they agreed.

It just doesn't appear correct to me am I not understanding something? anyone ! thanks

xylophone

https://www.litrg.org.uk/latest-news/news/171206-hmrc-are-set-use-bank-and-building-society-information-%E2%80%93-check-it-correct

I explained to the tax office that it was my understanding that basic tax payers can earn up to £1000,00 tax free over that amount you are taxed on the extra they agreed.

What were you told is going to be done about the tax code?

tacpot12

If they are not going to change your tax code, you should complain to HMRC using their formal complaint process. Your complaint is that they are forcing a prepayment when there is no expectation of a future tax liability OR that their staff cannot explain why they have a right to a pre-payment when there is no expectation of a tax liability.

You can appeal any decision, first with HMRC and then with the Independent Adjudicator.

Mr_Pegs

xylophone wrote: »

https://www.litrg.org.uk/latest-news/news/171206-hmrc-are-set-use-bank-and-building-society-information-%E2%80%93-check-it-correct



What were you told is going to be done about the tax code?

They would not except that I had a point there was no discussing they would or will not do anything odd to be honest

Mr_Pegs

tacpot12 wrote: »

If they are not going to change your tax code, you should complain to HMRC using their formal complaint process. Your complaint is that they are forcing a prepayment when there is no expectation of a future tax liability OR that their staff cannot explain why they have a right to a pre-payment when there is no expectation of a tax liability.

You can appeal any decision, first with HMRC and then with the Independent Adjudicator.

I have looked for the area on the Gov website but cant see where the complaints section is can you help and post a link?

sheramber

Mr_Pegs wrote: »

I have looked for the area on the Gov website but cant see where the complaints section is can you help and post a link?

https://www.gov.uk/government/organisations/hm-revenue-customs/contact/complain-about-hmrc

Dazed_and_confused

I fear you have totally misunderstood how savings interest is taxed.

In theory everyone can have £1,000 interest without any tax being payable (it isn't actually "tax free, it's taxed at a 0% rate which makes a subtle difference for some people).

But you could also have £18,500 taxable interest (in the 2019:20 tax year) and no tax would be payable.

In the 2019:20 tax year the £1,000 Personal Savings Allowance (actually a 0% tax rate) only applies to those who have income more than £17,500.

I think your income is probably a lot less than that and as such the Personal Savings Allowance simply doesn't apply to you.

Can you tell us how much other taxable income you expect to receive in 2019:20 and specifically how much you expect to receive from whichever job or pension the tax code of 1220L is going to be used against?

Mr_Pegs

Dazed_and_confused wrote: »

I fear you have totally misunderstood how savings interest is taxed.

In theory everyone can have £1,000 interest without any tax being payable (it isn't actually "tax free, it's taxed at a 0% rate which makes a subtle difference for some people).

But you could also have £18,500 taxable interest (in the 2019:20 tax year) and no tax would be payable.

In the 2019:20 tax year the £1,000 Personal Savings Allowance (actually a 0% tax rate) only applies to those who have income more than £17,500.

I think your income is probably a lot less than that and as such the Personal Savings Allowance simply doesn't apply to you.

Can you tell us how much other taxable income you expect to receive in 2019:20 and specifically how much you expect to receive from whichever job or pension the tax code of 1220L is going to be used against?

Pension under £12,000 not employed at present plus saving this time next year ( non isa's only listed here ) I will have £ 660.00 in interest as of this time next year assuming I don't spend any capital coupled with interest rates that can change any thoughts?

uknick

Mr Pegs, they're doing to your tax code what they did to mine when interest started to be paid gross of tax. There were a number of articles in the press at the time when the change happened highlighting how people in your position would have to pay the tax up front due to their code being changed and then get a refund at year end after making a claim.

When they tried it with me, I went through my on line tax account to ask them to put the personal allowance code back to standard and I'd settle any tax due when I did my self assessment. HMRC had no problem with this and I think it took them a month or so to make the change back to standard. I'm struggling to see why they won't do the same for you.

xylophone

In the OP's place I would be writing a formal letter of complaint.

polymaff

Mr. Pegs. Do you complete a self-assessment return?