Time to calculate 22/23 taxes.

ASB1960

Is there any limit on HMRC time to this ?

Background:-

In my case no tax return is required, but I do have untaxed taxable income (from the DWP). As a result there is a debt built up. This is (should be) collected from the following year by adjusting my tax code.

In 23/34 some 3rd party pension contributions were made and I claimed relief.

It transpired that my 22/23 calculation had not been done, further my tax code had not been adjusted to account for the 21/22 underpayment. As a result the amount due was twice what I expected. All information had been provided on time.

Curiously my 23/24 code was adjusted, which seems to suggest the 22/23 calculation had been done and simply wasn't recorded.

Are HMRC in time to be recalculating 22/23, if not I would seek to get it amended.

[Deleted User]

It could well be that 2022.23 has been closed by HMRC because the tax, on the basis of information received from you and your income provider, was correct or within a ‘tolerance’.

The bigger issue is whether you have informed HMRC of this untaxed DWP income and whether they have acted upon it. 

ASB1960

The DWP payment (contribution based ESA) is notified to HMRC by DWP (as an aside quite why DWP apply a BR tax code and don't actually deduct anything escapes me, makes the P60 they send look odd).

This has been correctly accounted for in every year since it started in 2017 by adjusting  my tax code for the following year to collect the underpayment, except for 2022/23.

This seems odd.

Dazed_and_C0nfused

The normal time limit, for 2022-23, would be 5 April 2027.  

Are you receiving sufficient taxable ESA to just be liable to tax on this alone or is it taxable ESA and some other income which results in tax being due?

In 23/34 some 3rd party pension contributions were made and I claimed relief.

Do you mean higher rate relief?

ASB1960

Thank you, so they are well in time. (I imagined they would be).

I have other taxable income in excess of my allowance, so all the contribution based ESA is taxed.

The pension contribution is merely what brought it to light (for info it was a compensation payment paid by a previous provider into a drawdown pot where relief was not claimed by the receiving scheme. HMRC accept it meets the criteria for a 3rd party contribution and my eligibility for relief).

Dazed_and_C0nfused

A change to your 2023-24 tax code doesn't mean that 2022-23 has been reviewed or finalised yet.

You might be able to check the current position for 2022-23 by checking your Personal Tax Account.

There might be a tile for different tax years saying something along the lines of,

6 April 2022 to 5 April 2023
You paid the right amount of tax.

There is nothing more to pay for this year.

However that doesn't mean things couldn't change later for that tax year.  But not later than 5 April 2027 😉

ASB1960

I was perhaps unclear, sorry.

My 23/24 tax code was changed June 23 (as expected as a result of underpaid tax for 22/23).

I now have P800 in the correct amounts for 23/24 and 22/23, both produced last week.

My issue was the 22/23 coding was not adjusted during June 22 (or any other time) to collect the underpayment due to ESA paid in 21/22.

sheramber

It transpired that my 22/23 calculation had not been done, further my tax code had not been adjusted to account for the 21/22 underpayment. As a result the amount due was twice what I expected. All information had been provided on time

Do you mean the amount has now been assessed-As a result the amount due was twice what I expected.

Do you want to complain that the amount was not coded out in 22/23?

ASB1960

Only if it is likely to lead to a favourable result, it seems most likely - given it is "in time" to lead, at best, to an acknowledgement of admin error.

In terms of financial impact it is merely to be paying it over 24/25 tax year rather than 22/23.

I can't see a result of "we will write it off".