Tax code wrong

doris540

 Ill keep this short as . Ive just spent nearly 1.5 hours sat on phone to HMRC with just been on hold waiting for advisor. Basically Ive never been informed i owe any tax. 2021/ 2022 hmrc say i paid the correct amount.. Today i got a letter with my tax code going from 1320 (claim some spouses allowance) down to 1034 or something similar because they have supposedly informed me before which they have not that i owe just over £700. so they reduced my tax allowance by basically 3500 how they arrive at this god only knows . Even if i did owe £700 which i dont how they can then reduce my code by that much. In this tax year i withdrew a sum from my private pension paid emergency tax on it and have been reimbursed by the hmrc . I also changed my job in December last year and earn the same as i did in last job. Ive gone onto the website uk personal tax etc where it staes to tell them its wrong and i can see no provision on how to do it on line. Any help greatly appreciated . I have checked my tax accts on the hmrc website and all look as they should apart from the code for 23/24 which says same as letter.

[Deleted User]

In order to collect £700 HMRC reduce your code by 3500. This means that you pay tax on an additional 3500 of income at 20% - £700.

The question remains - why are you underpaid £700? Try telephoning at 8am.

Have you received anything at all from HMRC regarding the underpayment? £700 is a very round number - akin to a fine?

doris540

Thanks those figures make sense doesnt answer why out the blue for no reason i owe them £700.

Dazed_and_C0nfused

doris540 said:

Thanks those figures make sense doesnt answer why out the blue for no reason i owe them £700.

Only HMRC can explain that.

They should be able to tell you which tax year it relates to and supply you with a calculation (assuming it isn't an estimate of tax owed for the current tax year).

Has anything else changed?  State Pension started for example?

sheramber

Best to phone as soon as lines open to be at the front of the queue.

You may get an answer a few minutes before then as some  people might start work early.

Silvertabby

Only HMRC can answer your query.

I'm not saying this has happened in your case - but when I retired and switched my tax code to my RAF pension, HMRC carried out an end of year review and announced that I owed them just over £2K.  This would be recovered over the next tax year by reducing my tax code.

My tax affairs are very simple, and I knew there was no way I could owe over £2K.  I carried out my own check, and calcuated that I did owe them some money - just over £2.

Fortunately, I managed to speak to a very nice, sensible, lady who agreed with my figures.  I did ask her if someone had fat fingered the decimal point into the wrong place, but she declined to answer......

doris540

Nothing else has changed no state pension yet no company car no other income bar my wages

p00hsticks

doris540 said:

Nothing else has changed no state pension yet no company car no other income bar my wages

One possibility, as you mention you changed jobs, is that both jobs used the same months tax allowance, whcih would mean you inderpaid by getting two lots of tax allowance that month

But a) It's unlikely that  that would result in that sort of underpayment and b) assuming you are referring to the December just gone, I'm not sure HMRC would have already picked it up and adjusted your tax code as yet.  

[Deleted User]

p00hsticks said:

doris540 said:

Nothing else has changed no state pension yet no company car no other income bar my wages

One possibility, as you mention you changed jobs, is that both jobs used the same months tax allowance, whcih would mean you inderpaid by getting two lots of tax allowance that month

But a) It's unlikely that  that would result in that sort of underpayment and b) assuming you are referring to the December just gone, I'm not sure HMRC would have already picked it up and adjusted your tax code as yet.  

Still of the opinion that it’s a fine. The scenario that you suggest happens a lot but unlikely to result in more than a £210 underpayment in this case. 

Dazed_and_C0nfused

p00hsticks said:

doris540 said:

Nothing else has changed no state pension yet no company car no other income bar my wages

One possibility, as you mention you changed jobs, is that both jobs used the same months tax allowance, whcih would mean you inderpaid by getting two lots of tax allowance that month

But a) It's unlikely that  that would result in that sort of underpayment and b) assuming you are referring to the December just gone, I'm not sure HMRC would have already picked it up and adjusted your tax code as yet.  

I think it can happen that quickly but it wouldn't usually be anywhere near £700.

Unless the op has misunderstood the tax code and it's tax code deduction of £700 rather than tax owed of £700?

Hopefully the op will enlighten us in due course.

etienneg

In your first post you said: "In this tax year i withdrew a sum from my private pension paid emergency tax on it and have been reimbursed by the hmrc ."
You don't give any figures for this. Was the reimbursement for the whole of the amount of emergency tax paid? Are you sure you were entitled to whatever was reimbursed? If you're not sure, for anyone on here to help, you would need to say how much was withdrawn, how much emergency tax was paid and how much was reimbursed. You would owe tax if too much was reimbursed.