Change in tax code - confusing explanation

allygate

Hi,

My PAYE tax code has been changed to one that reduces net income. When I logged into my personal tax account, the reason for the change in tax code given is -

"your Underpayment from previous year has been increased from £3,934 to £5,801"

I have some property income and so I submit a self assessment every year. My previous year (2019-20) self assessment tax calc shows an overpayment of about £800 for which I've received a refund from HMRC.

I am a bit confused by what they mean by "Underpayment from previous year". Given that we're talking about a historical figure, how can that increase or decrease?

Any thoughts would be appreciated!

Thanks

Ally

Dazed_and_C0nfused

Do you mean the underpayment (tax owed) or the tax code restriction to collect the underpayment?

MalMonroe

You might have to logon to your HMRC account, or phone them. Sometimes that's the only way to sort problems of this kind. Sometimes HMRC do get things wrong, they have in my experience anyway. I've always found it's worth hanging on (the telephone that is) so you can speak to a proper person.

CherryB70

Hi
I work part time and have been taxed because my old work place didn't give me my P45. At the end of the tax year I applied for a tax refund.  

1. They have only given me half of it.
2. Because I am on UC they have deducted that off as income.
I had to struggle through months of being taxed only for it to be taken away by UC. Is this right and is there any way of getting the money back.

Thanks

Dazed_and_C0nfused

CherryB70 said:

Hi
I work part time and have been taxed because my old work place didn't give me my P45. At the end of the tax year I applied for a tax refund.  

1. They have only given me half of it.
2. Because I am on UC they have deducted that off as income.
I had to struggle through months of being taxed only for it to be taken away by UC. Is this right and is there any way of getting the money back.

Thanks

You should start your own thread for a new unrelated question.  But in the meantime,

1.  Do you mean you think the tax refund is wrong?  If so why do you think it is wrong?

2.  Unlikely, tax refunds and the impacts on UC are regularly discussed on the Benefits and Tax Credits board and rightly or wrongly it is just how the system works.

allygate

After about an hour on hold, was able to talk to someone at HMRC. They said a lot that I couldn't understand but basically -

- told me to ignore the sentence I was worried about, said that it's just worded in a confusing way and doesn't mean what it looks like

- confirmed that my past SA returns are unchanged so to not worry about that.
- also confirmed that there is no new prior underpayment or anything, the tax code change was triggerred by a form that I had sent in 5 months ago!

Dazed_and_C0nfused

So basically neither the £3,934 or £5,801 was actually an underpayment?

allygate

Dazed_and_C0nfused said:

So basically neither the £3,934 or £5,801 was actually an underpayment?

Good question!

Sorry I didn't really understand all that she was trying to explain unfortunately. But from what I understood that is correct, those numbers did not refer to tax underpayments.