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Tax Code Change Query
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RG2015
Posts: 6,054 Forumite

in Cutting tax
My tax code for this year has just been changed and the HMRC information is not very helpful. I have shown a screenshot of the details below.
I understand the change from £60 to £305 for untaxed interest although I disagree with it. I told them last year my 24/25 interest would be £1,060 and they used £60 as the excess that would be taxed.
I understand the change from £60 to £305 for untaxed interest although I disagree with it. I told them last year my 24/25 interest would be £1,060 and they used £60 as the excess that would be taxed.
However, my actual 23/24 interest was £1,301 and I imagine they have received a figure of £1,305 for 23/24, and applied this to 24/25.
The figure I don’t understand is the £34 estimated underpayment. Any thoughts as to where this may have come from would be very welcome.

The figure I don’t understand is the £34 estimated underpayment. Any thoughts as to where this may have come from would be very welcome.

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Comments
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Are those clickable links or did you change the colour and underline?0
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eskbanker said:Are those clickable links or did you change the colour and underline?0
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I have checked my taxable income to date using a monthly allowance of £189 (£2,269 / 12), and I have paid exactly the right amount of tax from April to December.
Hence the £34 underpayment is a complete mystery to me.0 -
At a guess:
£60 previously included as interest over £1000
£305 is revised figure
£245 is difference
Tax due on £245 is £48.90
This was not collected over previous nine months of tax year - £48.90 x 9/12 is £36.681 -
Nomunnofun1 said:At a guess:
£60 previously included as interest over £1000
£305 is revised figure
£245 is difference
Tax due on £245 is £48.90
This was not collected over previous nine months of tax year - £48.90 x 9/12 is £36.68
I like your thinking, but assumed that the £60 to £305 was already included on its own line.
You may be right but these are my initial thoughts.
£714 was there when the figure was £36 and I surmised the following.
A calculated notional annual amount of £714 x 20% tax = £142.80
Divide by 4 to collect this in the 3 months Jan to Mar.
£142.80 / 4 = £35.70
So it still doesn't explain where the £34 or £36 figure came from.
Why does it have to be so anti-intuitive and non-transparent!0 -
Unfortunately the calculation often does not make sense as it is fudged to achieve the correct outcome, fairly transparent at the start of the year but not so 3/4 of the way through. The only real way is to work out how much tax is due in the year and how much all these changes will collect over the year.
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molerat said:Unfortunately the calculation often does not make sense as it is fudged to achieve the correct outcome, fairly transparent at the start of the year but not so 3/4 of the way through. The only real way is to work out how much tax is due in the year and how much all these changes will collect over the year.
At the very least HMRC should give some indication where the £34 comes from.
Even the move from £60 to £305 is not explained. I only surmised this from my high degree of knowledge of my figures and their methods of using previous years to estimate future years (whilst overriding the correct figure I had already given them with full details of every bank and BS).0 -
RG2015 said:Nomunnofun1 said:At a guess:
£60 previously included as interest over £1000
£305 is revised figure
£245 is difference
Tax due on £245 is £48.90
This was not collected over previous nine months of tax year - £48.90 x 9/12 is £36.68
I like your thinking, but assumed that the £60 to £305 was already included on its own line.
You may be right but these are my initial thoughts.
£714 was there when the figure was £36 and I surmised the following.
A calculated notional annual amount of £714 x 20% tax = £142.80
Divide by 4 to collect this in the 3 months Jan to Mar.
£142.80 / 4 = £35.70
So it still doesn't explain where the £34 or £36 figure came from.
Why does it have to be so anti-intuitive and non-transparent!As at 31st December you were £36 odd underpaid as per my original post. The new code should have been applied since April. It wasn’t and you are underpaid.Your code has been adjusted by 714 to collect this over three months in order to balance out the year.
£714 @ 20% /4 is, as you say, £35.70.1 -
Nomunnofun1 said:RG2015 said:Nomunnofun1 said:At a guess:
£60 previously included as interest over £1000
£305 is revised figure
£245 is difference
Tax due on £245 is £48.90
This was not collected over previous nine months of tax year - £48.90 x 9/12 is £36.68
I like your thinking, but assumed that the £60 to £305 was already included on its own line.
You may be right but these are my initial thoughts.
£714 was there when the figure was £36 and I surmised the following.
A calculated notional annual amount of £714 x 20% tax = £142.80
Divide by 4 to collect this in the 3 months Jan to Mar.
£142.80 / 4 = £35.70
So it still doesn't explain where the £34 or £36 figure came from.
Why does it have to be so anti-intuitive and non-transparent!As at 31st December you were £36 odd underpaid as per my original post. The new code should have been applied since April. It wasn’t and you are underpaid.Your code has been adjusted by 714 to collect this over three months in order to balance out the year.
£714 @ 20% /4 is, as you say, £35.70.
I do believe I have got it!
The £714 adjustment is the year to date underpayment of £36.
And the £60 to £305 adjustment is for the Q1 2025 shortfall of £12.
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