P800 Tax Calc. Will HMRC take money owed from benefits?

woodbine66

I have just received a P800 tax calculation from HMRC for tax year 23/24 telling me I owe them over £900. The letter says that £6700 of my income is from contributions based ESA, and £16900 from untaxed interest.

One option for paying the tax owed looks like making a payment to them for the whole amount owed. Alternatively they say - "We'll collect the tax you owe in your tax code, you do not need to do anything - we'll automatically increase the amount of tax you pay from your wages, salary or pension in equal instalments for 12 months from next April."

If I don't pay the amount owed, can they take it in instalments from my benefits over 12 months? Or is this not an option?

Also, how accurate are their calculations normally on these P800s? Many thanks for any help and advice.

Flugelhorn

I don't think they can take it from benefits as there is no tax code applied to them

Dazed_and_C0nfused

woodbine66 said:

I have just received a P800 tax calculation from HMRC for tax year 23/24 telling me I owe them over £900. The letter says that £6700 of my income is from contributions based ESA, and £16900 from untaxed interest.

One option for paying the tax owed looks like making a payment to them for the whole amount owed. Alternatively they say - "We'll collect the tax you owe in your tax code, you do not need to do anything - we'll automatically increase the amount of tax you pay from your wages, salary or pension in equal instalments for 12 months from next April."

If I don't pay the amount owed, can they take it in instalments from my benefits over 12 months? Or is this not an option?

Also, how accurate are their calculations normally on these P800s? Many thanks for any help and advice.

If your only income is ESA and untaxed interest then I think it's highly unlikely you can ultimately avoid having to pay it direct to HMRC.

The calculations are usually correct but they aren't infallible.  Presumably you have your own records to check it against.  I think DWP issue a P60 (or something like a P60) for ESA.

£900 doesn't look to be enough tax owed either, or have you rounded some figures?

QrizB

Just an aside, if the interest is from the inheritance you received a couple of years ago you should probably gradually moving it into an ISA or pension (as might best apply to you) to avoid paying tax on it.