I updated my Estimated Taxable Income

adriandilly

Hi,

I logged into my HMRC tax account yesterday for some other matter and I noticed my estimated taxable income was around £9000 higher than my salary.
I ran through the steps to update it, and it now shows the correct amount (my salary minus my pension contribution = gross for tax).

I've logged in again this morning and there is a note saying I've paid too little tax (I owe HMRC around £85). This was not there yesterday.

My questions are:
- why do I now owe money if my Estimated Taxable Income has reduced?
- did this note appear as a direct result of adjusting my ETI?
- why was my ETI high in the first place? I changed job in Nov 2018 but my salary when UP as a result.
- I claim monthly expenses from work and they pay them. Would this affect ETI?
- I have a company van (not car) with a fuel card. Would this affect ETI?
- who or what calculated my ETI before I adjusted it? Should I have left it?

TIA

yorkiechick

With employers having to declare income monthly through RTI, the tax office (supposedly) has a better grasp of earnings and try to best estimate what you'll earn and how to tax you. If for a couple of months you had a bonus or slightly increased earnings, this could be why the tax office had a higher than expected salary for you.
Any mid-year adjustments to income seems to generate an estimated under or overpayment which then changes your tax code accordingly. Although in my experience this just causes more issues!
If you also receive a P11D each year detailing taxable benefits in relation to your company van, this is added to your taxable income, which could also account for a higher than expected ETI.

unholyangel

adriandilly wrote: »

My questions are:
- why do I now owe money if my Estimated Taxable Income has reduced?
- did this note appear as a direct result of adjusting my ETI?
- why was my ETI high in the first place? I changed job in Nov 2018 but my salary when UP as a result.
- I claim monthly expenses from work and they pay them. Would this affect ETI?
- I have a company van (not car) with a fuel card. Would this affect ETI?
- who or what calculated my ETI before I adjusted it? Should I have left it?

TIA

Are you sure its for this year? Pretty sure the personal tax account displays that message for previous years.

Unless your income is over 100k or you have multiple PAYE sources, your estimated income is not going to cause an underpayment.

Was it the only employer listed for you? If so, it will just be taking what you've already earned and using that to forecast what you're going to earn.

Company van & fuel are benefits in kind and are part of your adjusted net income but not estimated income. Unless its payrolled, then it will.