646L Tax Code - Advice urgently needed!

hmczippy

Hi

I am hoping someone can help?

I am on £26,200 annual salary and I've been put on a 646L tax meaning that deductions are nearly £500 per month (inc NI).

I have phoned HMRC and they have said that there is nothing they can do and they cannot alter the 646L tax code until 6 April 2020.

This is going to kill me financially. I rent privately and live alone.

Basically what has happened is that November 2015 I changed jobs and accidentally ticked the wrong box on my P46 (the 'this is my only job since April 2015). I went 4 months pay without paying any tax as follows:

31 December 2015 £0 tax paid
31 January 2016 £0 tax paid
29 February 2016 £0 tax paid
31 March 2016 £0 tax paid

My tax codes since then have been as follows:
6 April 2016 - 5 April 2017 - 1100L
6 April 2017 - 5 April 2018 - 955L
6 April 2018 - 5 April 2019 - 1038L and 1185L
6 April 2019 - 5 April 2020 - 646L

I really don't know what to do! Apparently I owe £1200 from the time back in 2015/2016. The only way they can alter tax code is if I pay back in a lump sum (which I cannot afford to do!). Also, why couldn't they gradually do this over the years??

Will I get a rebate because surely is 646L is excessive? Do I really have to wait until April 2020? Is there seriously "NOTHING WE CAN DO?".

Dazed_and_confused

If you want anyone to help you might like to tell us how the 646L tax code is made up.

NB. It is probably Personal Allowance less £6040 to collect the tax owed but assumptions are never a good starting point when it comes to tax

hmczippy

This is the information I received on my tax code notice letter from HMRC:

This is how we worked out tax code(s)
Personal Allowance £12500
Total £12500
Less Adjustment of tax you owe (earlier year) £6032
Total tax-free amount £6468

Your total tax-free amount is used as follows
(name of where I work) £6468 of this income is tax-free
This totals your tax-free amount £6468

comeandgo

Yup, looks right. They are allowing you to repay at £100 per month. If money is very tight could you get a small part time job?

Dazed_and_confused

Yup, looks right. They are allowing you to repay at £100 per month.

I agree. Looks like you have effectively had a 4 year interest free loan of £1200.

The one thing you could look at is what happened in 2017:18. You would need your tax code breakdown and P60 information but it is unlikely to change what is happening now in all honesty.

hmczippy

Ahhh. Thanks guys. Looks like I have to suck it up buttercup.

agrinnall

Seems like poetic justice to me, you knew that you should have been paying tax for 4 months but decided to treat the extra money as a windfall and spent it rather than saving it up for when it would have to be paid back. HMRC are allowing you to pay over a period 3 times as long as you were underpaying, so that's surely a good thing?

hmczippy

No need for judgement! I just wanted to check it was all correct. I made an honest mistake by ticking the wrong box and as soon as the new tax year came in I spoke to HMRC and they said they could spread it out over a COUPLE of years. Forgive me for being slightly surprised that 4 years later it's still rumbling on. I thought it had been paid back!

chrisbur

hmczippy wrote: »

No need for judgement! I just wanted to check it was all correct. I made an honest mistake by ticking the wrong box and as soon as the new tax year came in I spoke to HMRC and they said they could spread it out over a COUPLE of years. Forgive me for being slightly surprised that 4 years later it's still rumbling on. I thought it had been paid back!

Might be worth giving details of these two years to see if any had been paid back for them.
Taxable gross and tax paid for each year and any details received for why tax codes were different to the usual codes.
Also for the year underpaid taxable gross and tax paid for the year to see the exact difference owing as the figure currently quoted may already have been adjusted.