INCORRECT TAX CODE - UNDERPAYMENT HELP

SHamilton99

Hi folks,

I rang HMRC today to query my tax code being changed from 1282L to 846L. Apparently, I owe them £800 from the tax year 2019-2020. So they are taking monthly payments from my wages and that won't stop until April 2022.

However, because of the tax code, it's leaving for £200 short each month. Will I get this back in the next tax year? Seems really unfair!!

Dazed_and_C0nfused

When did it change?

£800 owed is only £66.66/month

SHamilton99

@Dazed_and_C0nfused - it changed April 2021. They said they are taking out £66.66 a month until April 2022. But because of this my personal allowance has gone down, meaning i'm paying more tax because I'm on the 846L tax code

TheMilkmansDad

I'm no tax expert - but that doesn't look right.

Tax change from 1282L to 846L implies a £4,360 adjustment - what does it say on your Tax page on HMRC? Usually gives a full breakdown.

SHamilton99

You're right @TheMilkmansDad - it says my estimated income tax for the year is £4360. So my tax free amount is £8470. Does this sound right? Feels very steep for an £800 underpayment.... which I have no idea where it came from!

TheMilkmansDad

you need to check your tax free amount on the HMRC website which tells you how it's made up. - as I say I'm no expert so I'll leave it for others to advise.

Albermarle

I'm no tax expert - but that doesn't look right.

Tax change from 1282L to 846L implies a £4,360 adjustment - what does it say on your Tax page on HMRC? Usually gives a full breakdown.

A tax code reduction of £4,360 means that a 20% taxpayer will pay an extra £870 a year in tax , which is close to the £800 underpaid tax owed.
The monthly net pay would be  reduced by around £73 a month , so not sure where the OP's £200 a month reduction comes from .

Dazed_and_C0nfused

A tax code adjustment of £4,360 will usually collect an extra £872 in tax over the course of the year (£4,360 x 20%).

Where do yo get your £200/month figure from?  Can you post details of your last two payslips?

chrisbur

TheMilkmansDad said:

I'm no tax expert - but that doesn't look right.

Tax change from 1282L to 846L implies a £4,360 adjustment - what does it say on your Tax page on HMRC? Usually gives a full breakdown.

The difference in the code amounts to a difference of £4360 in the tax allowance not in the tax.  Assuming the OP is paying tax in the 20% band then an adjustment of £ 4360 in the allowance will result in extra tax of £872 for a full year ( ie 20% of £4360)
My guess is that they applied this to month 2 so would collect an extra £799 aprox  so clearing the under-payment.

chrisbur

SHamilton99 said:

However, because of the tax code, it's leaving for £200 short each month. Will I get this back in the next tax year? Seems really unfair!!

How are you getting the figure of £200?  Are you paying tax at over the 20% band? Even on 40% it is not going to be £200 and if you are paying at 40% you should be able to get HMRC to recalculate this.
Can you advise details of the payslip where you feel you have paid £200 extra and what you are comparing it to?

EDIT  You say "Apparently, I owe them £800 from the tax year 2019-2020" If you are not sure where this came from you can post details here of their calculation for a check.

SHamilton99

@chrisbur - my tax deductions have gone from around £535 a month, to £761 a month. Not sure why this is happening? My only guess was it was to do with the tax code changing?