HMRC tax underpayment

Agusya

Ive received a letter saying that Ive underpaid tax for year 23/24 and I have no idea how is this possible . Nothing in my circumstances has changed really . Ive been in full time employment for 20 years and always have had savings but no more than the free from tax amount (thats 20k a year right? ) The only change is that between August 23 and April 24 Ive been off sick and for most of this time Id received half pay. Im unemployed since April . I phoned HMRC and was told it has something to do with interest received from saving account, apparently HSBC bank I was with for some time last year and got £70 interest at the end…. Person on the phone was not able to tell me nothing more nor has HSBC bank . What do I do? Amount I have to pay is not large - £80 but I dont know why do I have to pay it 

Dazed_and_C0nfused

Agusya said:

Ive received a letter saying that Ive underpaid tax for year 23/24 and I have no idea how is this possible . Nothing in my circumstances has changed really . Ive been in full time employment for 20 years and always have had savings but no more than the free from tax amount (thats 20k a year right? ) The only change is that between August 23 and April 24 Ive been off sick and for most of this time Id received half pay. Im unemployed since April . I phoned HMRC and was told it has something to do with interest received from saving account, apparently HSBC bank I was with for some time last year and got £70 interest at the end…. Person on the phone was not able to tell me nothing more nor has HSBC bank . What do I do? Amount I have to pay is not large - £80 but I dont know why do I have to pay it 

Is what you received a P800 or PA302 (Simple Assessment) letter?

If so they include a calculation detailing how the underpayment has arisen.

The £20k you refer to is presumably the annual ISA limit and that is no relevance from an income tax perspective as interest from ISA's is exempt from income tax and wouldn't be on one of those calculations.

Interest outside of an ISA is all taxable although some of it is usually taxable at 0%.

If you don't understand the calculation you can post the details (but if it's shown change your employers name to "employment") and someone will explain in plain English what's happened.

Also, on another thread from May this year you mentioned receiving ESA for the previous couple of months.  Some ESA payments are taxable and that might be a factor.