Help with 25/26 tax code assessment

mistryjayesh

Hi

I have just been notified that my 25-26 tax code is available and has changed drastically. 

See photo attached 

so for 25-26 tax year it says I owe £4271 from previous year but in current tax year is says I only owe £16 so my question is where has that figure come from?  

Any help is appreciated 

Dazed_and_C0nfused

That isn't £4,271 that you owe.

It is a (badly worded) tax code deduction of £4,271 which is needed so you will pay £854 extra tax.  Or maybe more than £854 if you aren't a straightforward basic rate payer.

If you use the web version you might be able to see more information, particularly relating to your current tax code or a calculation for 2023-24, either of which will probably help understand the tax owed.

Details of your expected pay for 2025-26 will help understand what the £4,271 is trying to collect.

mistryjayesh

I have just had a look and for 2023/2024 it shows this -

and for 2024-2025 it says I have around £2409 of untaxed interest

does that sound right?

 Also if I call them up do I have the option to settle any outstanding tax and my tax code can be adjusted?

Dazed_and_C0nfused

So I think what is likely to have happened is,

1.  You owe £493.60 for 2023-24.
2.  You owe £360+ for 2024-25 (this is just an estimate)

A small part of what you owe for 2024-25 is being collected via your tax code for 2024-25 (that is what the £16 relates to).

Everything else is being collected via your 2025-26 tax code, hence the £4,271 deduction.

You can definitely pay the £493.60 and get that out of the way and have an improved tax code for 2025-26.

Personally I wouldn't pay anything for 2024-25 until knowing the final position.  It could be you have paid too much (likely if your untaxed interest in 2024-25 is less than it was in 2023-24).

mistryjayesh

Dazed_and_C0nfused said:

So I think what is likely to have happened is,

1.  You owe £493.60 for 2023-24.
2.  You owe £360+ for 2024-25 (this is just an estimate)

A small part of what you owe for 2024-25 is being collected via your tax code for 2024-25 (that is what the £16 relates to).

Everything else is being collected via your 2025-26 tax code, hence the £4,271 deduction.

You can definitely pay the £493.60 and get that out of the way and have an improved tax code for 2025-26.

Personally I wouldn't pay anything for 2024-25 until knowing the final position.  It could be you have paid too much (likely if your untaxed interest in 2024-25 is less than it was in 2023-24).

Thank you appreciate the advise, if I pay the £493 online which it appears I can will my tax code change quite soon to reflect this?

Dazed_and_C0nfused

mistryjayesh said:

Dazed_and_C0nfused said:

So I think what is likely to have happened is,

1.  You owe £493.60 for 2023-24.
2.  You owe £360+ for 2024-25 (this is just an estimate)

A small part of what you owe for 2024-25 is being collected via your tax code for 2024-25 (that is what the £16 relates to).

Everything else is being collected via your 2025-26 tax code, hence the £4,271 deduction.

You can definitely pay the £493.60 and get that out of the way and have an improved tax code for 2025-26.

Personally I wouldn't pay anything for 2024-25 until knowing the final position.  It could be you have paid too much (likely if your untaxed interest in 2024-25 is less than it was in 2023-24).

Thank you appreciate the advise, if I pay the £493 online which it appears I can will my tax code change quite soon to reflect this?

I haven't done that myself so not 100% sure but I would expect a new code within a week or two.

Certainly in plenty of time for the first payday in the new tax year starting on 6 April 

mistryjayesh

Thank you appreciate the help