Underpaid Tax from previous year

Tom99

[FONT=Verdana, sans-serif]I am helping a relative check their tax.[/FONT]
[FONT=Verdana, sans-serif]The 2019/20 coding includes underpaid tax from previous year £286 and a deduction from the code of 2019/20 £1,432.[/FONT]
[FONT=Verdana, sans-serif]There does not seem to be any way of seeing how the £286 underpayment is calculated. The record for 2018/19 only show a pension and the tax deducted from that pension.[/FONT]
[FONT=Verdana, sans-serif]The underpaid tax is obviously to do with savings interest and it would be interesting to see what interest for 2018/19 HMRC have a record of so far, which appear incomplete.[/FONT]
[FONT=Verdana, sans-serif]Should their records be up to date by now, or are they still receiving information from the banks and the tax code for 2019/20 will be altered again later in the year.[/FONT]

Dazed_and_confused

Most likely it would be one of three things,

A). From a change (reduction) to the 2018:19 tax code late on in the 2018:19 tax year

. From a P800 calculation for 2017:18 (or earlier tax year)

C). A combination of B and C.

They may have all the details for 2018:19 but I doubt they have started using them just yet. Banks and building societies have until 30 June 2019 to supply the details for 2018:19 so it might be a bit longer before they start to review 2018:19 and update 2019:20 tax codes.

Is there any P800 calculations or tax codes amongst relatives paperwork?

The tax code for 2019:20 will be amended for an updated interest figure but the underpaid tax will only be changed if the tax due is less than has been previously estimated. If more is owed it will normally be included in the 2020:21 tax code.

unholyangel

If its bank interest, then I expect their 19/20 code would have a deduction for the same amount.

Tell your relative to call them - they're open tomorrow, I believe 9-5 (and its one of their quietest days of the week). The underpayment may not even be from the 18/19 year or it may be incorrect.

You could take all their income and calculate what tax should have been paid versus what was paid, but if your figures say the right tax is paid then its really only telling you where it hasn't came from rather than where it has.

ETA: Come to think of it, I'm pretty sure the tax account tells you when you were overpaid or underpaid in a year. So, do any of the years show on there as underpaid or overpaid?

Tom99

Dazed_and_confused wrote: »

Most likely it would be one of three things,

A). From a change (reduction) to the 2018:19 tax code late on in the 2018:19 tax year

. From a P800 calculation for 2017:18 (or earlier tax year)

C). A combination of B and C.

They may have all the details for 2018:19 but I doubt they have started using them just yet. Banks and building societies have until 30 June 2019 to supply the details for 2018:19 so it might be a bit longer before they start to review 2018:19 and update 2019:20 tax codes.

Is there any P800 calculations or tax codes amongst relatives paperwork?

The tax code for 2019:20 will be amended for an updated interest figure but the underpaid tax will only be changed if the tax due is less than has been previously estimated. If more is owed it will normally be included in the 2020:21 tax code.

Thank you for that information.
It is reason A), a late alteration to the 2018/19 tax code to include a deduction equal to the 2017/18 interest declared in a self assessment return that year because CGT was due that year. The final 2018/19 tax code was 1013LX which means extra tax on £1,720 * 20% = £344 but only an extra £55 was deducted from the pension income, difference £289 so near enough to the £286.
I will check later in the year to see what has been updated.
Will interest received eventually show up on the PAYE Online Tax Account?
Nothing is shown for 2016/17 nor 2017/18.

Tom99

unholyangel wrote: »

If its bank interest, then I expect their 19/20 code would have a deduction for the same amount.
ETA: Come to think of it, I'm pretty sure the tax account tells you when you were overpaid or underpaid in a year. So, do any of the years show on there as underpaid or overpaid?

Thank you. Yes the same £1,720 have been deducted from the 2019/20 code. The only mention of overpaid/underpaid is in the 2019/20 record saying 2018/19 was underpaid by £286.

Dazed_and_confused

Will interest received eventually show up on the PAYE Online Tax Account?

I would expect it to but there have been a lot of posts about this on the Savings board and it seems people have had mixed experiences.

If you get a new tax code for 2019:20 that is the time to have a look. Or P800 for 2018:19.