Adjustment to Rate Band help please

[Deleted User]

Homebuyer78 said:

Dazed_and_C0nfused said:

Basically yes.

You have saved paying 40% tax on all of the £4k+ you made in pension contributions 

There may be some other minor adjustments depending on why your tax code was slightly different to the big standard 1250L but £1,100 should be in teh correct ball park assuming there isn't any other income you haven't previously mentioned.

Ok, thanks for clearing that up. It was what my gut instinct was last year when I started putting money aside to cover the bill, so I will sit and wait for the demand letter to land on my doortstep in the next few months. Not to worry - I owe what I owe so fair cop and all that. 

Yes - back where we’d started. Just to emphasise that it is your taxable pay (after pension contributions) not gross pay, or basic pay that’s relevant when determining tax liability. Perhaps better to leave this year’s code? Glad it is all sorted and even more glad that you are paying the correct contributions - that could have resulted in a big bill from pensions branch. 

Homebuyer78

Yeah I was thinking that just now. I guess if I overpay tax this year through not adjusting my tax code and earning significantly less overtime than predicted, then the taxman will owe me a refund? If they will start wanting payment as of 2021/22 as previously suggested, then I might end up not needing to dig too deeply into my pocket? As my username suggests, I am about to complete on a house purchase, so although I could give that £1100 to the taxman, I could also put it to use covering the short term cost of that with the idea to pay it back in the 21/22 tax year. 

I've never had a demand for tax repayment - is it the case that they always give you the option to pay it back through your tax code, or will it be a case of you have 14 days to pay it or else? 

Dazed_and_C0nfused

Unless its a large amount (above £3k) or you don't earn enough to pay it off then through your code is the usual method.

If that isn't possible for some reason then you would have until 31 January 2021 to pay it direct to HMRC, no earlier than that.

Homebuyer78

Dazed_and_C0nfused said:

Unless its a large amount (above £3k) or you don't earn enough to pay it off then through your code is the usual method.

If that isn't possible for some reason then you would have until 31 January 2021 to pay it direct to HMRC, no earlier than that.

Ok, cheers guys. Guess I'll see where I'm at with money if / when this house move ever takes place and then decide from there. It's funny given the sums of money that have gone through my bank account recently that £1100 seems like chump change! I've become too accustomed to talk of 100's of thousands...