SOS! HMRC discounting me a really high tax income next tax year!

[Deleted User]

Hi!
I changed jobs two times last year and as a result my employers calculated my income tax wrongly so I ended with a tax underpayment of about £300.
Now HMRC sent me a "Your tax code notice" letter saying they will lower my tax free amount to recover this money.
The issue is this new tax free amount/tax code is too low and I don't want to end up overpaying tax as I desperately need every pound of my salary this new tax year!
I am able to pay this £300 via cheque or transfer or card payment, etc, to avoid them to do this.
BUT! There is not option in my online personal tax account to do this and I cannot contact them by phone as the lines are always collapsed nor have I received a replay to a letter I sent them manifesting this a month ago to - Pay As You Earn and Self Assessment, HM Revenue and Customs, BX9 1AS.

I have not received a tax calculation letter nor a P800 from them, and cannot wait until October-November for them to solve this!

Any help on this will be greatly appreciated!

Dazed_and_C0nfused

If you (HMRC?) know it is £300 what is wrong with your tax code?

Can you provide the tax code details?

dales1

Dazed - probably the tax code is correct, but the OP wants a higher net income next year (eg to show ability to afford a mortgage).

OP wants advice on paying off the underpayment now. But I don't know the answer either !

(PS your familiar username has changed, I see).

Dales

Dazed_and_C0nfused

Sometimes posters have misunderstood how tax codes and tax underpayments work.

They see a tax code deduction if say £1,500 and think they are going to pay £1,500 more in tax when it will be £300 more (£1,500 x 20%).

But more info needed really to know for certain what the real issue is.

nick74

dales1 said:

Dazed - probably the tax code is correct, but the OP wants a higher net income next year (eg to show ability to afford a mortgage).

Mortgage lenders tend to look at gross income income rather than net, to avoid issues like the OP's affecting affordability calculations. 

[Deleted User]

Dazed_and_C0nfused said:

Sometimes posters have misunderstood how tax codes and tax underpayments work.

They see a tax code deduction if say £1,500 and think they are going to pay £1,500 more in tax when it will be £300 more (£1,500 x 20%).

But more info needed really to know for certain what the real issue is.

Hi, 
Thanks for your replay.
My tax code should be 1250L but they want to reduce it to 1093L.
I'll be earning a higher salary this new tax year, so to me this means they're gonna take more tax income than due and I'll end up overpaying it! And I desperately need that money!

General_Grant

aaia_1234 said:

Dazed_and_C0nfused said:

Sometimes posters have misunderstood how tax codes and tax underpayments work.

They see a tax code deduction if say £1,500 and think they are going to pay £1,500 more in tax when it will be £300 more (£1,500 x 20%).

But more info needed really to know for certain what the real issue is.

Hi, 
Thanks for your replay.
My tax code should be 1250L but they want to reduce it to 1093L.
I'll be earning a higher salary this new tax year, so to me this means they're gonna take more tax income than due and I'll end up overpaying it! And I desperately need that money!

The tax code is only about the tax-free allowance and means you will pay the "refunding to HMRC" amount because of it.  It doesn't affect what you pay on the rest of your income, does it?

Dazed_and_C0nfused

aaia_1234 said:

Dazed_and_C0nfused said:

Sometimes posters have misunderstood how tax codes and tax underpayments work.

They see a tax code deduction if say £1,500 and think they are going to pay £1,500 more in tax when it will be £300 more (£1,500 x 20%).

But more info needed really to know for certain what the real issue is.

Hi, 
Thanks for your replay.
My tax code should be 1250L but they want to reduce it to 1093L.
I'll be earning a higher salary this new tax year, so to me this means they're gonna take more tax income than due and I'll end up overpaying it! And I desperately need that money!

Without the breakdown of how the tax code has been calculated it's impossible to be sure but 1093L will usually result in you paying anywhere between £314 and £628 more than normal.

Can you say what the tax code deduction for the underpayment is?  Not the amount of tax due but the deduction in your tax code.

And how much is this higher salary in the new tax year?  

If there is an issue it may be simple to resolve just by updating your expected (taxable) salary details for 2020:21 on  your Personal Tax Account.

[Deleted User]

Dazed_and_C0nfused said:

aaia_1234 said:

Dazed_and_C0nfused said:

Sometimes posters have misunderstood how tax codes and tax underpayments work.

They see a tax code deduction if say £1,500 and think they are going to pay £1,500 more in tax when it will be £300 more (£1,500 x 20%).

But more info needed really to know for certain what the real issue is.

Hi, 
Thanks for your replay.
My tax code should be 1250L but they want to reduce it to 1093L.
I'll be earning a higher salary this new tax year, so to me this means they're gonna take more tax income than due and I'll end up overpaying it! And I desperately need that money!

Without the breakdown of how the tax code has been calculated it's impossible to be sure but 1093L will usually result in you paying anywhere between £314 and £628 more than normal.

Can you say what the tax code deduction for the underpayment is?  Not the amount of tax due but the deduction in your tax code.

And how much is this higher salary in the new tax year?  

If there is an issue it may be simple to resolve just by updating your expected (taxable) salary details for 2020:21 on  your Personal Tax Account.

Personal Allowance £12500
Less adjustment for tax you owe £1564
Total tax free amount £10936
Which leaves me with a 1093L tax code for 2020/2021

nick74

How much is your salary likely to be in the 2020-21 tax year? 

Dazed_and_C0nfused

nick74 said:

How much is your salary likely to be in the 2020-21 tax year? 

This is the crucial thing now.

The deduction of £1,564 is going to collect tax of anywhere from £312 to £625.

For most people it will collect £312 (£1,564 x 20%).

How much do you (aaia_1234) think it is going to collect?