Tax code hasn't changed when it should have

GrubbyGirl_2

I have had a 1257L tax code since I retired 4 years ago as my NHS pension has been my only income.  In 2022/23 I earned £830 interest so as a higher rate tax payer my tax code should have gone down to reflect the £330 I need to pay tax on.  I have just signed up for an online HMRC tax page and it says my next years tax code will still be 1257L as usual.

I understood that the banks notify HMRC of interest received so I don't understand why it hasn't been accounted for.  It says on the HMRC account that I can add any other income.  Can I add it there or should I call them?  Or should I wait until I get my 2024/25 statement from NHS pensions to see if it still says 1257L on that before doing anything?

Thanks in advance

Dazed_and_C0nfused

Your tax code wouldn't change for any interest relating to 2022-23 as HMRC don't get the details until after the end of the tax year.

If you owed tax for 2022-23 then that would normally result in a change to your 2024-25 tax code (for tax underpaid).

How much does your tax account show HMRC have estimated your NHS pension as for the current tax year?

GrubbyGirl_2

Dazed_and_C0nfused said:

Your tax code wouldn't change for any interest relating to 2022-23 as HMRC don't get the details until after the end of the tax year.

If you owed tax for 2022-23 then that would normally result in a change to your 2024-25 tax code (for tax underpaid).

How much does your tax account show HMRC have estimated your NHS pension as for the current tax year?

Yes I was expecting my 2024/25 tax code to change to account for the 2022/23 interest.

I've just had a look around as am new to the tax account.  Interestingly for the current year they have estimated my income as the same as the previous year and the next year as the current year (which will be more as uplifted by CPI) yet looking at the income tax history page for this year it's spot on.  So it looks like it lags a year behind in terms of predicting income

Dazed_and_C0nfused

GrubbyGirl_2 said:

Dazed_and_C0nfused said:

Your tax code wouldn't change for any interest relating to 2022-23 as HMRC don't get the details until after the end of the tax year.

If you owed tax for 2022-23 then that would normally result in a change to your 2024-25 tax code (for tax underpaid).

How much does your tax account show HMRC have estimated your NHS pension as for the current tax year?

Yes I was expecting my 2024/25 tax code to change to account for the 2022/23 interest.

I've just had a look around as am new to the tax account.  Interestingly for the current year they have estimated my income as the same as the previous year and the next year as the current year (which will be more as uplifted by CPI) yet looking at the income tax history page for this year it's spot on.  So it looks like it lags a year behind

Are you 100% certain you were a higher rate payer in 2022-23?

On another thread (in this tax year) you refer to becoming a higher rate payer when your State Pension starts.

GrubbyGirl_2

I got that wrong.  Yes I was definitely a higher rate tax payer just

[Deleted User]

GrubbyGirl_2 said:

Dazed_and_C0nfused said:

Your tax code wouldn't change for any interest relating to 2022-23 as HMRC don't get the details until after the end of the tax year.

If you owed tax for 2022-23 then that would normally result in a change to your 2024-25 tax code (for tax underpaid).

How much does your tax account show HMRC have estimated your NHS pension as for the current tax year?

Yes I was expecting my 2024/25 tax code to change to account for the 2022/23 interest.

I've just had a look around as am new to the tax account.  Interestingly for the current year they have estimated my income as the same as the previous year and the next year as the current year (which will be more as uplifted by CPI) yet looking at the income tax history page for this year it's spot on.  So it looks like it lags a year behind in terms of predicting income

As you say the NHS pension will be uplifted by the CPI rate last September but HMRC has no knowledge of this or the rules relating to any other of the many pensions out there. The first actual indicator for them will be the payment made at the end of April. You can amend as you have the details. 

Dazed_and_C0nfused

GrubbyGirl_2 said:

I got that wrong.  Yes I was definitely a higher rate tax payer

I don't know then, you would normally have received a calculation by now (and the tax owed would have been included in your 2024-25 tax code).

And you would usually have had an update to your current tax code, which assumes you would receive £830 interest again this year.

Is there anything which might have offset the tax owed (approx £135) as very small amounts are ignored.

Although your current tax code would usually be kept up to date.

GrubbyGirl_2

I think I will give them a call.  They did give me a refund when I first drew my pension but other than that it's been very straight forward as only income is pension.

GrubbyGirl_2

So I called them this morning.  Only my Lloyds bank savings accounts had reported to HMRC.  Neither my Zopa or Marcus accounts had nor ever had during the 3 years I had the accounts.  Fortunately for the previous 2 years my savings hadn't taken me over the personal savings allowance.