HMRC Previous Year Tax Checker Tool - Incorrect Results

dcs34

Hi all, hopefully this is in the right place on this forum.

Like many people I have yet to receive my 2023/24 Tax Assessment from HMRC into my online tax account. I am expecting I will need to ring them to sort it. To inform that conversation, I used their official online calculator to work out an estimate of what I might expect to pay: https://www.tax.service.gov.uk/guidance/previous-year-tax-checker/start/about-this-guidance

Based on the below figures:

• Income salary (post-pension salary sacrifice, pre-tax): £53,735.82
• Value of benefits according to HMRC: £795.46
• Total taxable savings interest (i.e. interest from non-ISA accounts): £2,619.51 | Less the £500 personal allowance: £2,119.51
• Total income tax paid to date: £9,249.97

The tool says to round everything down to the nearest pound figure, so I did. This produced the below output:

 

Unhelpfully the calculation steps don't show an extra row for calculating the savings interest, i.e. £2,119 * 40% = £848, but this has been added to the two employment lines to equal the total amount of Income Tax: £10,092 due. Misleading / unhelpful, but not 'incorrect'.

However my real concern is with the final section: income tax due of £10,092 less the £9,249 already paid should equal £843 of tax I still owe - not a figure of more than double this at £1,690 - and I cannot see how the tool is calculating this figure?

I would be grateful if anyone else who has used this official HMRC tool can confirm if they've had similar errors / issues? I appreciate it's not an official calculation as such but as taxpayers we should expect HMRC to get it right rather than mislead or cause confusion (or worst, scare people into thinking they will need to pay far more tax than they actually owe).

I have reported this to their online support team but have yet to receive a response. Just having a wobble that I'm missing something obvious or doing something stupid!

Dazed_and_C0nfused

dcs34 said:

Hi all, hopefully this is in the right place on this forum.

Like many people I have yet to receive my 2023/24 Tax Assessment from HMRC into my online tax account. I am expecting I will need to ring them to sort it. To inform that conversation, I used their official online calculator to work out an estimate of what I might expect to pay: https://www.tax.service.gov.uk/guidance/previous-year-tax-checker/start/about-this-guidance

Based on the below figures:

• Income salary (post-pension salary sacrifice, pre-tax): £53,735.82
• Value of benefits according to HMRC: £795.46
• Total taxable savings interest (i.e. interest from non-ISA accounts): £2,619.51 | Less the £500 personal allowance: £2,119.51
• Total income tax paid to date: £9,249.97

The tool says to round everything down to the nearest pound figure, so I did. This produced the below output:

 

Unhelpfully the calculation steps don't show an extra row for calculating the savings interest, i.e. £2,119 * 40% = £848, but this has been added to the two employment lines to equal the total amount of Income Tax: £10,092 due. Misleading / unhelpful, but not 'incorrect'.

However my real concern is with the final section: income tax due of £10,092 less the £9,249 already paid should equal £843 of tax I still owe - not a figure of more than double this at £1,690 - and I cannot see how the tool is calculating this figure?

I would be grateful if anyone else who has used this official HMRC tool can confirm if they've had similar errors / issues? I appreciate it's not an official calculation as such but as taxpayers we should expect HMRC to get it right rather than mislead or cause confusion (or worst, scare people into thinking they will need to pay far more tax than they actually owe).

I have reported this to their online support team but have yet to receive a response. Just having a wobble that I'm missing something obvious or doing something stupid!

Having read the explanation on the opening page you have to wonder why they have bothered.

Provide a calculator yes.  But one with so many caveats and exclusions seems stupid.

I essentially get the same outcome as you, makes no sense whatsoever.  The untaxed interest seems to be being taxed at 80% 😳

dcs34

Thanks for checking it @Dazed_and_C0nfused - I'm feeling a bit less like your username now!

Yes it's pretty poor beside the potential errors that they've had to put so many limitations to it - and in doing so exclude all the people on those edge cases are the very sort of people who might benefit from using the checker! Doesn't take a lot to tax one number, minus another, and multiply by 20%... In this day and age it should be entirely possible for them to publish a tool with all the possible variables, rules and exemptions; if it's too difficult for them to code it then how on earth can they expect people to figure it out without their help?

I've put an email into the MSE News team as any errors from HMRC should really be checked, fixed and called out publically. 

Dazed_and_C0nfused

dcs34 said:

Thanks for checking it @Dazed_and_C0nfused - I'm feeling a bit less like your username now!

Yes it's pretty poor beside the potential errors that they've had to put so many limitations to it - and in doing so exclude all the people on those edge cases are the very sort of people who might benefit from using the checker! Doesn't take a lot to tax one number, minus another, and multiply by 20%... In this day and age it should be entirely possible for them to publish a tool with all the possible variables, rules and exemptions; if it's too difficult for them to code it then how on earth can they expect people to figure it out without their help?

I've put an email into the MSE News team as any errors from HMRC should really be checked, fixed and called out publically. 

It is quite odd.

It asks for Gift Aid, but there is no option for RAS pension contributions.

Likewise Blind Person's Allowance can be included but none of the common tax reducer "allowances" like Marriage Allowance or Married Couple's Allowance.  

dales1

The HMC tool has added the interest tax (847.60) to the Income Tax Due figure, to make it 10,092.00 (correctly).

But then the HMRC tool has performed the final subtraction ... and added the interest tax (847.60) back in again.

847.60 + 843.00 = 1,690.60.

What a tool !

dcs34

dales1 said:

The HMC tool has added the interest tax (847.60) to the Income Tax Due figure, to make it 10,092.00 (correctly).

But then the HMRC tool has performed the final subtraction ... and added the interest tax (847.60) back in again.

847.60 + 843.00 = 1,690.60.

What a tool !

Thanks I had worked out an error but not the specific issue that it is counting the interest tax twice - in the total sum (to work out the net) but then adding it again into the net figure.

I fear this is true in multiple circumstances and not just with my figures!

dcs34

Little update - having contacted HMRC they've agreed the tool was wrong and have updated it (https://www.tax.service.gov.uk/guidance/previous-year-tax-checker/start/about-this-guidance). I tried again today and it works for my numbers. I've also asked them whether they'll publicise this more widely as there may be vulnerable people who've used the tool who are now planning to pay a tax bill twice as big as they actually owe, and are making bad financial decisions as a result of that.

Thanks for raising this with us.
After reviewing your comments yes I agree, the calculation was incorrect. 
The tool was duplicating the amount of tax due on the untaxed interest and was knocking the calculation out.
Based on your feedback I have now updated the tool and it is working as it should.
This tool itself is only there to provide a basic estimate of tax for pervious tax years due to its limitations, one being it does not have the facility to amend the tax code.
For the current tax year there is however, a PAYE tax calculator that can be tailored to provide a more specific result.
https://www.tax.service.gov.uk/guidance/paye-tax-calculator/start/type-of-tax-code
If you have specific tax queries for previous tax years and want more than an estimation the link below advises on the 
various ways you can contact HMRC to have this reviewed for you.
https://www.gov.uk/government/organisations/hm-revenue-customs/contact/income-tax-enquiries-for-individuals-pensioners-and-employees
Thanks again for highlighting this issue.

Dazed_and_C0nfused

dcs34 said:

Little update - having contacted HMRC they've agreed the tool was wrong and have updated it (https://www.tax.service.gov.uk/guidance/previous-year-tax-checker/start/about-this-guidance). I tried again today and it works for my numbers. I've also asked them whether they'll publicise this more widely as there may be vulnerable people who've used the tool who are now planning to pay a tax bill twice as big as they actually owe, and are making bad financial decisions as a result of that.

Thanks for raising this with us.
After reviewing your comments yes I agree, the calculation was incorrect. 
The tool was duplicating the amount of tax due on the untaxed interest and was knocking the calculation out.
Based on your feedback I have now updated the tool and it is working as it should.
This tool itself is only there to provide a basic estimate of tax for pervious tax years due to its limitations, one being it does not have the facility to amend the tax code.
For the current tax year there is however, a PAYE tax calculator that can be tailored to provide a more specific result.
https://www.tax.service.gov.uk/guidance/paye-tax-calculator/start/type-of-tax-code
If you have specific tax queries for previous tax years and want more than an estimation the link below advises on the 
various ways you can contact HMRC to have this reviewed for you.
https://www.gov.uk/government/organisations/hm-revenue-customs/contact/income-tax-enquiries-for-individuals-pensioners-and-employees
Thanks again for highlighting this issue.

Referring you to the tax code related checker is an bit odd as a tax code is by it's very nature only ever provisional and the code number itself doesn't account for what's included.  

For example an underpayment being collected via a code doesn't actually impact your Personal Allowance or rate bands, it's simply an extra added to the tax you need to pay in the year the tax code relates to.