Paid tax bill for savings interest but still shows as owing

Fatferds12

I paid my tax bill for savings interest on 29 Nov 2024 but it's still showing as not paid so I contacted HMRC via chat. I was told they would need to send a transferral for it to be

sent to my PAYE record and should be done by 21 March which is nearly 4 months after I made the payment. They have also sent me a revised tax code letter showing the amount they intend taking each month to pay this.

I have 3 questions which are:-

1. If they haven't processed my payment by April then could I start paying tax on the amount I've already paid?

2. If this does happen will it be down to me to claim the tax back or will they pay it back as they are at fault?

3. For future payments, if I don't pay it in a lump sum and let them take it monthly, do they adjust my tax code each year as the amount would vary?

Any help and advice would be appreciated as I am quite worried.

Many thanks.

Dazed_and_C0nfused

1.  Yes.

2.  Neither, it will be your employer or pension who "pays it back", once HMRC issue a new tax code removing the underpayment you have paid direct to HMRC.  And remember you are highly unlikely to get a refund, it would be much more likely to just be a reduction in the tax you pay one month.

3.  Tax codes often vary year by year, they should include a deduction to collect the specific amount owed.  So it might be a deduction to collect say £200 one year but £400 the next year.  Then nothing the year after.  All down to your personal tax position.

Nothing to worry about really.  Bit annoying maybe but do you know what has happened to your payment 🤔.

I am assuming you are referring to an underpayment from a P800 calculation for 2023-24?

Fatferds12

I'm retired so from what you say it will be my company pension that pays it back. That's good to know I won't have to chase HMRC and in future I'll just let them take it each month and save all the hassle.

Yes, this was an underpayment from a P800 calculation for 23/24 and I thought I'd be 'helpful' and pay it, and now wish I hadn't!
 
I did ask them what had happened to my payment and had it just been 'sitting there', but she didn't know and said 'a different department dealt with payments'.  All she could see was that it had been paid so at least I know it s in the system.

Thanks for your help.

Dazed_and_C0nfused

Fatferds12 said:

I'm retired so from what you say it will be my company pension that pays it back. That's good to know I won't have to chase HMRC and in future I'll just let them take it each month and save all the hassle.

Yes, this was an underpayment from a P800 calculation for 23/24 and I thought I'd be 'helpful' and pay it, and now wish I hadn't!
 
I did ask them what had happened to my payment and had it just been 'sitting there', but she didn't know and said 'a different department dealt with payments'.  All she could see was that it had been paid so at least I know it s in the system.

Thanks for your help.

Sounds a bit odd but once the payment is moved to the correct place it should mean you get a new tax code for 2025-26 removing the deduction relating to that underpayment from 2023-24.

In the unlikely event that doesn't happen before you are paid for the first time after 5 April 2025 then your pension company will adjust your tax the first time they pay you after receiving the new tax code from HMRC.

Fatferds12

Dazed_and_C0nfused said:

Fatferds12 said:

I'm retired so from what you say it will be my company pension that pays it back. That's good to know I won't have to chase HMRC and in future I'll just let them take it each month and save all the hassle.

Yes, this was an underpayment from a P800 calculation for 23/24 and I thought I'd be 'helpful' and pay it, and now wish I hadn't!
 
I did ask them what had happened to my payment and had it just been 'sitting there', but she didn't know and said 'a different department dealt with payments'.  All she could see was that it had been paid so at least I know it s in the system.

Thanks for your help.

Sounds a bit odd but once the payment is moved to the correct place it should mean you get a new tax code for 2025-26 removing the deduction relating to that underpayment from 2023-24.

In the unlikely event that doesn't happen before you are paid for the first time after 5 April 2025 then your pension company will adjust your tax the first time they pay you after receiving the new tax code from HMRC.

Thanks for your help with this and much to my amazement after nearly 3 months of waiting the payment has gone through and it says I owe nothing!  My tax code is still incorrect so do you know how soon this gets updated or should I just be happy the payment has cleared and wait for them to update it?

Dazed_and_C0nfused

Fatferds12 said:

Dazed_and_C0nfused said:

Fatferds12 said:

I'm retired so from what you say it will be my company pension that pays it back. That's good to know I won't have to chase HMRC and in future I'll just let them take it each month and save all the hassle.

Yes, this was an underpayment from a P800 calculation for 23/24 and I thought I'd be 'helpful' and pay it, and now wish I hadn't!
 
I did ask them what had happened to my payment and had it just been 'sitting there', but she didn't know and said 'a different department dealt with payments'.  All she could see was that it had been paid so at least I know it s in the system.

Thanks for your help.

Sounds a bit odd but once the payment is moved to the correct place it should mean you get a new tax code for 2025-26 removing the deduction relating to that underpayment from 2023-24.

In the unlikely event that doesn't happen before you are paid for the first time after 5 April 2025 then your pension company will adjust your tax the first time they pay you after receiving the new tax code from HMRC.

Thanks for your help with this and much to my amazement after nearly 3 months of waiting the payment has gone through and it says I owe nothing!  My tax code is still incorrect so do you know how soon this gets updated or should I just be happy the payment has cleared and wait for them to update it?

One easy option would be for you to update the estimate of company pension income you expect to receive for 2025-26.

There are two reasons for doing that, firstly no one knows as well as you what you can expect to get from your company pension.  Each scheme will have its own rules around annual inflation increases so that keeps your tax records as up to date as possible.

Secondly it usually prompts a review of your tax code for that year. So if the tax owed from 2023-24 has now been paid direct it could get you the new tax code with the tax owed removed.

But, given there are still ~8 weeks before the 2025-26 tax code could be used, you could just wait a few days and see what happens next.

Fatferds12

Dazed_and_C0nfused said:

Fatferds12 said:

Dazed_and_C0nfused said:

Fatferds12 said:

I'm retired so from what you say it will be my company pension that pays it back. That's good to know I won't have to chase HMRC and in future I'll just let them take it each month and save all the hassle.

Yes, this was an underpayment from a P800 calculation for 23/24 and I thought I'd be 'helpful' and pay it, and now wish I hadn't!
 
I did ask them what had happened to my payment and had it just been 'sitting there', but she didn't know and said 'a different department dealt with payments'.  All she could see was that it had been paid so at least I know it s in the system.

Thanks for your help.

Sounds a bit odd but once the payment is moved to the correct place it should mean you get a new tax code for 2025-26 removing the deduction relating to that underpayment from 2023-24.

In the unlikely event that doesn't happen before you are paid for the first time after 5 April 2025 then your pension company will adjust your tax the first time they pay you after receiving the new tax code from HMRC.

Thanks for your help with this and much to my amazement after nearly 3 months of waiting the payment has gone through and it says I owe nothing!  My tax code is still incorrect so do you know how soon this gets updated or should I just be happy the payment has cleared and wait for them to update it?

One easy option would be for you to update the estimate of company pension income you expect to receive for 2025-26.

There are two reasons for doing that, firstly no one knows as well as you what you can expect to get from your company pension.  Each scheme will have its own rules around annual inflation increases so that keeps your tax records as up to date as possible.

Secondly it usually prompts a review of your tax code for that year. So if the tax owed from 2023-24 has now been paid direct it could get you the new tax code with the tax owed removed.

But, given there are still ~8 weeks before the 2025-26 tax code could be used, you could just wait a few days and see what happens next.

Thanks again for your help and advice.  I might wait a few days and see what happens.  It's great that there are people like you to help :-)