New tax code confusion

johnwash

I recently received a message through the HMRC online tax account stating that my tax code has changed for the year. Part of this tax code change includes reducing my tax free amount for this year by £1,081, as apparently they estimate that I have not paid enough income tax so far this year - the income tax I apparently owe is £158.80.

I will give them a ring on Monday morning, but would anyone have any ideas how this calculation could work (as £158.80 is 14.7% of £1,081 - not at the 20 or 40% tax rates)?

I am aware that I owe £36 interest from 2022-23 from going over my PSA, but I'm confused by the rest of the above numbers. I am in full-time employment, paying tax through PAYE, if that helps.

Many thanks

Dazed_and_C0nfused

As the new tax code will only be used for the remaining ~19 weeks of the tax year it means a tax code deduction of £1,081 will collect £158 (or very close to it) for a higher rate payer.

£1,081 x 40% = £432.40

£432.40 x 19/52 = £157.99

Tax owed for 2022-23 would normally be collected by an adjustment to your 2024-25 tax code, not the 2023-24 code.