Cannot live on 23L tax code - PLEASE HELP!

Gerrymouse

I was accepting child benefit for 8 years and did not realise single parents cannot have this if they earn a certain amount of income as I do.

So I now owe back all the money from 2015, I was advised I could pay it back over time through PAYE so thought okay but now see my tax code been reduced from 1100L to 23L, this is effectively £14000 a year in tax, so something like £600 extra tax on top of the £500 I usually pay.

I sent in an income/outcome expenditure which lists I cannot repay this amount of tax.

When I call I get passed between PAYE who say, debt not their issue, then self assessment say, we have no control over your PAYE code

I am frantically trying to sort, I even delayed being paid one month and got a loan from my dad and asked work to just pay me twice next month when I hope the issue is sorted. to avoid the first tax repayment.

Can anyone who has worked for the tax office advise how I sort this issue PLEASE

Thank you so so much in advance for any advice

Gerrymouse

To clarify, I know the fault is mine, I know I have to pay the interest or something on childcare benefit I was not entitled to, I just want to know how I pay over a longer period and a smaller repayment per month.

Dazed_and_confused

Their is no tax rule around single parents, you've imagined that.

£14,000 extra a year in tax is way more than £600 and £500/month. What are the correct amounts?

Tax code 23L is pretty meaningless. What is the breakdown of how this tax code is made up?

And how much do you expect to earn in the current tax year (your taxable pay that will appear on your P60).

Gerrymouse

I made it clear that I am in the wrong and that I was entitled to no child benefits. I assumed the over £50K rule was for two parents earning. Taxcode 23L is not meaningless at all, it means I can earn £2,300 before I pay tax. Previously I was on code 1100L which meant I could earn £11,000 before paying tax. My total tax estimated for 2019 is £14000. As I currently pay £500 a month, then maths dictates the additional tax I need to pay to make up to £14000 is £666.

Taxable pay is £54000

Meantime I have paying out £50-£100 every other month on penalties as far back as 15/16, to date I have paid out around £1200 just in penalties which I assume are for the late payment of tax I have yet to repay but its an additional cost burden.

The breakdown is here, I have no idea how I owe £11000 as my child is only 8 and he only ever got £80 a month

Personal Allowance
The amount is
£12,500

Additions
You do not have any additions
£0

Deductions
Outstanding debt
£11,494

Medical insurance £774
Update or remove
Update or remove Medical insurance

Total deductions
£12,268

Your total tax-free amount
The amount is
£232

Dazed_and_confused

Maybe the "way more than" comment was a bit ott

Tax code "23L" tells us nothing about what is being taken into account.

That tax code is not collecting a debt of £11k. It is collecting a debt of c£4.5k.

By reducing your tax code allowances by £11,494 you will, on taxable salary of £54k, pay an extra £4.5k tax (£11,494 x 40%).

And if your taxable income is c£55k then you would only need to repay 50% of any Child Benefit received.

Are you still receiving Child Benefit? The tax code is not collecting anything towards any High Income Child Benefit Charge due for the current tax year so if you are getting it then you are building up a new bill, albeit one that is not payable until January 2021.

Gerrymouse

no stopped all child care payments and even company healthcare to save some tax. I have no issues repaying what was not mine but I cannot jump to finding £666 extra a month so want to come to an arrangement like you can with almost anyone you owe debt to but its impossible to find anyone who will take on my case and be in a position to help me at HMRC.

I was told if I sent in an income/outcome sheet they could review it and sort a repayment plan but no one I speak to now says that's possible and Im stuck between self assessment and PAYE departments.

Dazed_and_confused

To be honest I think you have left it too late to try and negotiate.

"Outstanding debt" isn't something often mentioned on here as a tax code deduction and I think you are stuck with that now until 5 April 2020.

But either you don't quite understand how Child Benefit works or have other income you aren't telling us about as you appear to have opted to stop receiving Child Benefit when you are still entitled to it and would only need to pay part of it back. And for the current tax year it wouldn't need to be paid back (via Self Assessment) until January 2021.

xylophone

Have you seen this and tried the calculator?

https://www.gov.uk/child-benefit-tax-charge

Have you thought of increasing your pension contributions to bring yourself back to basic rate only and so eligible for CB?

https://www.pruadviser.co.uk/knowledge-literature/knowledge-library/reduce-high-income-child-benefit-charge/

Alice_Holt

OP How do get to the "£666 extra each month" figure.

Dazed and Confused has explained that the adjustment to your tax code for an outstanding debt of £11,494 results in you making a £4,598 extra tax payment. This is £383 per month.
Effectively the £11,494 will be recovered over 30 months.

How much did your I/E statement show you could afford to pay?

At £54k you may still be due some Child Benefit ( As D & C has noted). "If your income is between £50,000 and £60,000, you will still get however much you're entitled to." It stops entirely at £60k.
https://www.moneyadviceservice.org.uk/en/articles/changes-to-child-benefit-from-2013

You could try writing to your MP and asking them to intervene with HMRC, but you would need to get your figures clear first, and put a convincing case around hardship.

Dazed_and_confused

Nothing the op has posted suggests they owe £11,494.

The tax code adjustment of £11,494 is to collect a debt of c£4.6k.

There may be other amounts owed on the op's Self Assessment account but the £11,494 is not a debt, it is a tax code adjustment needed to collect a debt of c£4.6k (£11,494 x 40%).

and put a convincing case around hardship.

With all due respect to the op this is going to be nigh on impossible. They are earning £54k.

molerat

I make the difference in tax on £54K between a 1250 and 23 code £400 per month. On a 1250 code tax would be £757, £829 on 1185 last year, so I can't see where £500 tax paid comes from. I think OP may be comparing eggs with carrots