2023-24 savings tax bill slightly more than own estimate

saajan_12

To put it another way, PAYE can't differentiate the last digit of the allowance so they err on the side of less tax and UNDER charge you up to ~£2. 

HMRC calculate it correctly when assessing the total tax, so don't undercharge the £2 when calculating the tax on normal income and savings. 

If you didn't have savings, you would be underpaid by £2 which they just don't bother to collect. 

chrisbur

RG2015 said:

chrisbur said:

RG2015 said:

IceCreamCone10 said:

2023-24 outstanding tax owed is on savings interest from that year. The taxable employment income and tax already paid on that employment income, were from the P60.

However the savings interest tax is exactly £2 more than my estimate which is to the exact penny. I did a 20% tax deduction from the gross savings interest (after PSA) but the actual tax bill is exactly £2 more.

Will just pay it but would this increase be to do with the quirks of their calculations? E.g. the £1.8 extra you can end up paying, although in this case it is exactly £2.

I doubt that it is down to any quirks. If you pay tax at 20% then £10 of interest would be £2 of tax.

When HMRC calculate the tax they do so for all taxable income added together so wages will be added to interest.  Tax on wages is  calculated by PAYE and that has lots of quirks.

Is it possible that a quirk could result in the OP being charged an extra £2 in tax on savings interest?

The OP has not been charged an extra £2 on savings interest.  The combined taxable income of wages and savings interest using the actual tax allowance rather than the very slightly over generous PAYE allowance has resulted in the extra £2 being due which has been in affect added to the total extra tax due on the savings.
It looks like this PAYE "under-tax" is also dragging some weekly paid employees into having to pay tax for the extra tax allowance they were given for week 53 in 23/24....
https://forums.moneysavingexpert.com/discussion/comment/81329723#Comment_81329723

Dazed_and_C0nfused

chrisbur said:

RG2015 said:

chrisbur said:

RG2015 said:

IceCreamCone10 said:

2023-24 outstanding tax owed is on savings interest from that year. The taxable employment income and tax already paid on that employment income, were from the P60.

However the savings interest tax is exactly £2 more than my estimate which is to the exact penny. I did a 20% tax deduction from the gross savings interest (after PSA) but the actual tax bill is exactly £2 more.

Will just pay it but would this increase be to do with the quirks of their calculations? E.g. the £1.8 extra you can end up paying, although in this case it is exactly £2.

I doubt that it is down to any quirks. If you pay tax at 20% then £10 of interest would be £2 of tax.

When HMRC calculate the tax they do so for all taxable income added together so wages will be added to interest.  Tax on wages is  calculated by PAYE and that has lots of quirks.

Is it possible that a quirk could result in the OP being charged an extra £2 in tax on savings interest?

The OP has not been charged an extra £2 on savings interest.  The combined taxable income of wages and savings interest using the actual tax allowance rather than the very slightly over generous PAYE allowance has resulted in the extra £2 being due which has been in affect added to the total extra tax due on the savings.
It looks like this PAYE "under-tax" is also dragging some weekly paid employees into having to pay tax for the extra tax allowance they were given for week 53 in 23/24....
https://forums.moneysavingexpert.com/discussion/comment/81329723#Comment_81329723

Which is quite nice to see given most people don't benefit from an extra weeks tax code allowances.