Repaying underpaid tax with bankers draft timelines

Stormseer

I am PAYE.

Underpaid 1k in tax last year due to moving jobs in March and some overlapping payslips in that month.

It was coded into this year's tax allowance in August.

Unfortunately I need to pay this back asap so that my code can be re-adjusted as I'm trying to get a mortgage and this is having a big impact on affordability. We are on a tight deadline too as its a new build and exchange is end of this month.

Been told by HMRC twice that I cannot pay it online as its already coded in.

Only options are cheque, bankers draft & postal order.

Sent a bankers draft off today for the full amount. Next day before 1pm delivery.

Been told that once they've processed it on their side HMRC will update my tax code.

Anyone had any experience with processing times for this sort of thing?

We have a tight deadline on getting our mortgage sorted out, trying to get an idea of the average time it takes for HMRC to sort this sort of thing.

Bank said it takes 2 days to clear the bankers draft.

I'm curious what HMRC processing times are like once they receive mail.

Dazed_and_C0nfused

Underpaid 1k in tax last year due to moving jobs in March and some overlapping payslips in that month.

It was coded into this year's tax allowance in August

That is very very unusual.

Are you certain the tax code change in August isn't simply trying to collect the correct tax for the current tax year?

Irrespective of that I would guess maybe 6-12 months for normal correspondence but maybe it will be quicker when it's involves a payment?

Stormseer

Yes it’s definitely for last year 

It’s odd how they’ve done it and if I’m honest I’m annoyed as this has likely jeopardised my efforts to buy a property.

 If I at least had the option to pay it back online it wouldn’t be half as bad but whatever way they’ve done this I have been told by two folks on the phone they can’t move the unpaid tax out of this years tax code and back to last year. Which is what I wanted them to do so I could pay it in a lump sum online.

This is how my personal tax account shows it when I view how my tax free allowance for this year has been calculated : 

How your tax-free amount is calculated

Personal Allowance

£12,570

Additions

You do not have any additions

£0

Deductions

Underpayment from previous year You underpaid £1,047 tax in a previous tax year 

£3,947

Medical insurance from XXXXXX

£46

Total deductions

£3,993

Your total tax-free amount

£8,577

—-

Hopefully they can sort this quicker than 6-12 months anyway. I’m going to call on Friday and see if anything can be done to speed things along. Ideally I’d need them to process it early next week if anything.

Can’t believe there isn’t a faster way to pay this sort of thing back. No ability to pay online, and for PAYE I can’t even do a bank transfer. What year are we living in? Daft.

Dazed_and_C0nfused

Stormseer said:

Yes it’s definitely for last year 

It’s odd how they’ve done it and if I’m honest I’m annoyed as this has likely jeopardised my efforts to buy a property.

 If I at least had the option to pay it back online it wouldn’t be half as bad but whatever way they’ve done this I have been told by two folks on the phone they can’t move the unpaid tax out of this years tax code and back to last year. Which is what I wanted them to do so I could pay it in a lump sum online.

This is how my personal tax account shows it when I view how my tax free allowance for this year has been calculated : 

How your tax-free amount is calculated

Personal Allowance

£12,570

Additions

You do not have any additions

£0

Deductions

Underpayment from previous year You underpaid £1,047 tax in a previous tax year 

£3,947

Medical insurance from XXXXXX

£46

Total deductions

£3,993

Your total tax-free amount

£8,577

—-

Hopefully they can sort this quicker than 6-12 months anyway. I’m going to call on Friday and see if anything can be done to speed things along. Ideally I’d need them to process it early next week if anything.

Can’t believe there isn’t a faster way to pay this sort of thing back. No ability to pay online, and for PAYE I can’t even do a bank transfer. What year are we living in? Daft.

So what tax code has your employer been using when they paid you in April through to September 🤔

Stormseer

Dazed_and_C0nfused said:

Stormseer said:

Yes it’s definitely for last year 

It’s odd how they’ve done it and if I’m honest I’m annoyed as this has likely jeopardised my efforts to buy a property.

 If I at least had the option to pay it back online it wouldn’t be half as bad but whatever way they’ve done this I have been told by two folks on the phone they can’t move the unpaid tax out of this years tax code and back to last year. Which is what I wanted them to do so I could pay it in a lump sum online.

This is how my personal tax account shows it when I view how my tax free allowance for this year has been calculated : 

How your tax-free amount is calculated

Personal Allowance

£12,570

Additions

You do not have any additions

£0

Deductions

Underpayment from previous year You underpaid £1,047 tax in a previous tax year 

£3,947

Medical insurance from XXXXXX

£46

Total deductions

£3,993

Your total tax-free amount

£8,577

—-

Hopefully they can sort this quicker than 6-12 months anyway. I’m going to call on Friday and see if anything can be done to speed things along. Ideally I’d need them to process it early next week if anything.

Can’t believe there isn’t a faster way to pay this sort of thing back. No ability to pay online, and for PAYE I can’t even do a bank transfer. What year are we living in? Daft.

So what tax code has your employer been using when they paid you in April through to September 🤔

995L previously until August 

I understand it’s confusing. I have no idea why I was on that code actually. 

But it was adjusted to 725 LX in august due to the underpayment above as well as an underpayment in this year of £177 

On Monday when trying to move my tax around the lady put me on a cumulative code which means I’ll pay the £177 back in next pay pack and this resulted in my code changing to the 857L that it is Noel’s

But to raise it to 1252L or whatever it would be without the other underpayment is apparently not possible, they can’t undo the coding until they receive a bank transfer/cheque payment from me. 

sheramber

Dazed_and_C0nfused said:

Underpaid 1k in tax last year due to moving jobs in March and some overlapping payslips in that month.

It was coded into this year's tax allowance in August

That is very very unusual.

Are you certain the tax code change in August isn't simply trying to collect the correct tax for the current tax year?

Irrespective of that I would guess maybe 6-12 months for normal correspondence but maybe it will be quicker when it's involves a payment?

HMRC do now  collect tax by amending the code in the year they discover the underpayment. They call it dynamic coding practices.

sheramber

The payment has to be credited to your account by the Collector of Taxes who then notifies the the  processing staff,  which is a separate department,  of the payment. 

Dazed_and_C0nfused

sheramber said:

Dazed_and_C0nfused said:

Underpaid 1k in tax last year due to moving jobs in March and some overlapping payslips in that month.

It was coded into this year's tax allowance in August

That is very very unusual.

Are you certain the tax code change in August isn't simply trying to collect the correct tax for the current tax year?

Irrespective of that I would guess maybe 6-12 months for normal correspondence but maybe it will be quicker when it's involves a payment?

HMRC do now  collect tax by amending the code in the year they discover the underpayment. They call it dynamic coding practices.

Totally agree.  But that doesn't include introducing an underpayment from a prior year into the tax code of the current year part way through the current tax year.

However, now that the op has told us this I'm certain that isn't what has actually happened.

995L previously until August