Grossly overestimated notice of coding/interest received

canary2211

My 90 year old mother received in January a 24/25 code of negative 14000 - which will reduce her small teachers pension to close to zero for Feb and March.  25/26 coding is sensible.  The 24/25 code is designed to collect tax due on interest income - both an underpayment for 23/24 and also 24/25 liability. 

But the code is based on a nonsense estimate of interest received in 24/25, in turn based on 23/24 - a figure we haven't seen therefore can't validate - but presumably is approx correct based on banks providing accurate info to HMRC.  24/25 interest has been managed downwards by ISA use, switching to other investments etc, and a fall in rates. Of course HMRC don't know about that: indeed they estimate an increase in interest received in 24/25. 

She doesn't do self assessment - so there is no way to amend this online (as far as I can see)  so she must telephone HMRC (with my assistance on the phone).  A letter is a waste of time of course.

Concerns are:

• lack of system to report/validate/amend HMRC guesses and bank reported data
• lack of mechanism online to deal with reductions in expected income due to ISAs etc
• lack of online mechanism to appeal/amend code downwards (you can easily report new extra income)
• absurd short time between issuing code and tax year end, and the attempt by HMRC to collect every penny in two months via coding, with the consequence of reducing her pension income to close to zero.  She has adequate saving to dip into of course but she will be terrified she sees the pension payments. 

My mother of course is extremely confused - and worried. 

I'm assuming she is not alone? 

eskbanker

canary2211 said:

She doesn't do self assessment - so there is no way to amend this online (as far as I can see)  so she must telephone HMRC (with my assistance on the phone).  A letter is a waste of time of course.

Concerns are:

• lack of system to report/validate/amend HMRC guesses and bank reported data
• lack of mechanism online to deal with reductions in expected income due to ISAs etc
• lack of online mechanism to appeal/amend code downwards (you can easily report new extra income)

She should be able to amend via her online tax account, even though the option is confusingly described as 'add investment income'.

Nomunnofun1

canary2211 said:

My 90 year old mother received in January a 24/25 code of negative 14000 - which will reduce her small teachers pension to close to zero for Feb and March.  25/26 coding is sensible.  The 24/25 code is designed to collect tax due on interest income - both an underpayment for 23/24 and also 24/25 liability. 

But the code is based on a nonsense estimate of interest received in 24/25, in turn based on 23/24 - a figure we haven't seen therefore can't validate - but presumably is approx correct based on banks providing accurate info to HMRC.  24/25 interest has been managed downwards by ISA use, switching to other investments etc, and a fall in rates. Of course HMRC don't know about that: indeed they estimate an increase in interest received in 24/25. 

She doesn't do self assessment - so there is no way to amend this online (as far as I can see)  so she must telephone HMRC (with my assistance on the phone).  A letter is a waste of time of course.

Concerns are:

• lack of system to report/validate/amend HMRC guesses and bank reported data
• lack of mechanism online to deal with reductions in expected income due to ISAs etc
• lack of online mechanism to appeal/amend code downwards (you can easily report new extra income)
• absurd short time between issuing code and tax year end, and the attempt by HMRC to collect every penny in two months via coding, with the consequence of reducing her pension income to close to zero.  She has adequate saving to dip into of course but she will be terrified she sees the pension payments. 

My mother of course is extremely confused - and worried. 

I'm assuming she is not alone? 

It’s an estimated amount. If it’s wrong, change it as above. Additionally no more than 50% of any payment can be deducted under PAYE regardless of the code. 

canary2211

eskbanker said:

canary2211 said:

She doesn't do self assessment - so there is no way to amend this online (as far as I can see)  so she must telephone HMRC (with my assistance on the phone).  A letter is a waste of time of course.

Concerns are:

• lack of system to report/validate/amend HMRC guesses and bank reported data
• lack of mechanism online to deal with reductions in expected income due to ISAs etc
• lack of online mechanism to appeal/amend code downwards (you can easily report new extra income)

She should be able to amend via her online tax account, even though the option is confusingly described as 'add investment income'.

I'll try again! Thanks - I couldnt get it to do that previously.