Tax Code changes and HMRC no knowledge of SA returns

lr1277

My mum has had about 5 tax code notices in the last 5 months. The latest one is for the tax year 25/26.

On discussing with HMRC they explained about the untaxed interest.

The problem I have is that mum has been submitting self-assessment returns for over 20 years. Admittedly in the submission for 23/24, we undercounted the interest by less than £50 because of a savings account that we had forgotten about.

But this tax code notice says we undercounted by £3.4k and therefore owe about £650 in tax.

So as I said we spoke to HMRC who explained all this. When I then said mum has been submitting tax returns for many years, he could see nothing on his system saying that mum submitted self-assessment returns. This seems to be wrong.

So yes she did a few 1000 of interest from one particular savings account but like I said we accounted for this in the tax return.

Any advice on how to get this fixed? I.e. getting HMRC to see the tax returns. For full disclosure, we use taxcalc to submit the returns. This may solve the muliple tax code notices problem.

Many thanks.

Edited to add: Once we got the 1st or 2nd tax code notice we spoke to HMRC. As part of that they sent us their records of the interest received in 23/24. We received this in December. So when we submitted the 23/24 tax return in January 2025, the interest was the same as that shown on the report from HMRC. When I said she was shy by about £50, but that was our records compared to HMRC records. Once the tax return was submitted, the 2 interest figures matched.

Also mum has submitted a tax return for many years because she also has rental income.

Dazed_and_C0nfused

Has your mum received any P800 or PA302 (Simple Assessment) calculations?

It should be one of those or Self Assessment, not both.  That where the issue could be?

lr1277

I don’t think so but don’t know for certain. I will check with her.
What is the significance of those forms?

sheramber

Did your mother submit returns online? 

How has she previously paid tax on her rental income? 

DRS1

There are two separate bits of HMRC (well probably many more) one deals with PAYE and Tax Codes and Simple Assessment while another deals with Self Assessment.  The two bits don't seem to interact very well.  For years I have been getting Simple Assessments despite doing Self Assessment and it takes a call to the Self Assessment people to "switch off" the Simple Assessment.  The Simple Assessment people don't seem to be able to do it - perhaps because they can't see I do Self Assessment.

In principle if she does Self Assessment she should not get a Simple Assessment (the fact that I get one is some sort of glitch)

I don't know about the £3.4k in her tax code but do not assume the Revenue have the correct figures for interest.  They could have missed some accounts or they could have kept in estimates from previous years which should have been dropped because the account was closed

TheGreenFrog

DRS1 said:

There are two separate bits of HMRC (well probably many more) one deals with PAYE and Tax Codes and Simple Assessment while another deals with Self Assessment.  The two bits don't seem to interact very well.  For years I have been getting Simple Assessments despite doing Self Assessment and it takes a call to the Self Assessment people to "switch off" the Simple Assessment.  The Simple Assessment people don't seem to be able to do it - perhaps because they can't see I do Self Assessment.

In principle if she does Self Assessment she should not get a Simple Assessment (the fact that I get one is some sort of glitch)

I don't know about the £3.4k in her tax code but do not assume the Revenue have the correct figures for interest.  They could have missed some accounts or they could have kept in estimates from previous years which should have been dropped because the account was closed

I have similar issue.  I have done SA for many years and when I started was self-employed so it fell under business tax account.   For the last seven years I have been on PAYE but still doing SA.  Every year I get a tax calculation based on my coding etc and it is always wrong as I don’t pay much attention to my tax coding (although one year they sent me a tax refund cheque which I sent back to them).  As I know my SA is accurate I just ensure I pay the tax on that and ignore any other tax assessments they send me.  So far that approach seems to work! I have contacted HMRC a couple of times in the past about the contradiction but nothing happens so I have given up.  

lr1277

sheramber said:

Did your mother submit returns online? 

How has she previously paid tax on her rental income? 

Yes she submitted online in that we used Taxcalc.

I only got involved in submitting her tax returns about 10 years ago when my dad got too sick to do it himself. Until he died she did not pay tax as her income was below the personal allowance. After that as she got all his income, then she started paying tax.

lr1277

DRS1 said:

There are two separate bits of HMRC (well probably many more) one deals with PAYE and Tax Codes and Simple Assessment while another deals with Self Assessment.  The two bits don't seem to interact very well.  For years I have been getting Simple Assessments despite doing Self Assessment and it takes a call to the Self Assessment people to "switch off" the Simple Assessment.  The Simple Assessment people don't seem to be able to do it - perhaps because they can't see I do Self Assessment.

In principle if she does Self Assessment she should not get a Simple Assessment (the fact that I get one is some sort of glitch)

I don't know about the £3.4k in her tax code but do not assume the Revenue have the correct figures for interest.  They could have missed some accounts or they could have kept in estimates from previous years which should have been dropped because the account was closed

That makes sense, thanks. Do you know how to stop the Simple Assessment so we can continue with self-assessment?

Dazed_and_C0nfused

lr1277 said:

My mum has had about 5 tax code notices in the last 5 months. The latest one is for the tax year 25/26.

On discussing with HMRC they explained about the untaxed interest.

The problem I have is that mum has been submitting self-assessment returns for over 20 years. Admittedly in the submission for 23/24, we undercounted the interest by less than £50 because of a savings account that we had forgotten about.

But this tax code notice says we undercounted by £3.4k and therefore owe about £650 in tax.

So as I said we spoke to HMRC who explained all this. When I then said mum has been submitting tax returns for many years, he could see nothing on his system saying that mum submitted self-assessment returns. This seems to be wrong.

So yes she did a few 1000 of interest from one particular savings account but like I said we accounted for this in the tax return.

Any advice on how to get this fixed? I.e. getting HMRC to see the tax returns. For full disclosure, we use taxcalc to submit the returns. This may solve the muliple tax code notices problem.

Many thanks.

Edited to add: Once we got the 1st or 2nd tax code notice we spoke to HMRC. As part of that they sent us their records of the interest received in 23/24. We received this in December. So when we submitted the 23/24 tax return in January 2025, the interest was the same as that shown on the report from HMRC. When I said she was shy by about £50, but that was our records compared to HMRC records. Once the tax return was submitted, the 2 interest figures matched.

Also mum has submitted a tax return for many years because she also has rental income.

On reflection I think you may have simply misunderstood what is happening.

A tax code cannot tell you that.  It's simply using the latest information HMRC have to try and collect the correct tax each year.

If you want to understand this you will need to provide details of the latest tax code for both 2024-25 and 2025-26.

But ultimately that really doesn't matter as her tax return will always finalise things irrespective of what happens via her tax code(s).

DRS1

lr1277 said:

DRS1 said:

There are two separate bits of HMRC (well probably many more) one deals with PAYE and Tax Codes and Simple Assessment while another deals with Self Assessment.  The two bits don't seem to interact very well.  For years I have been getting Simple Assessments despite doing Self Assessment and it takes a call to the Self Assessment people to "switch off" the Simple Assessment.  The Simple Assessment people don't seem to be able to do it - perhaps because they can't see I do Self Assessment.

In principle if she does Self Assessment she should not get a Simple Assessment (the fact that I get one is some sort of glitch)

I don't know about the £3.4k in her tax code but do not assume the Revenue have the correct figures for interest.  They could have missed some accounts or they could have kept in estimates from previous years which should have been dropped because the account was closed

That makes sense, thanks. Do you know how to stop the Simple Assessment so we can continue with self-assessment?

Is she getting a Simple Assessment?  Someone asked but I did not see the answer.  If the issue is the tax codes then you can't switch them off.

She can do a self assessment even if she gets the simple assessment (unless HMRC tell her she doesn't need to do one any more).

As to switching off Simple Assessment I keep calling HMRC and after each call I think I have done it and then the next year I get another one so call again and the cycle repeats.  Maybe my last call last year did the trick.  I will find out in October or so this year.

I think my real message was that you should not be worried that one bit of HMRC can't see that she does Self Assessment.  

lr1277

DRS1 said:

lr1277 said:

DRS1 said:

There are two separate bits of HMRC (well probably many more) one deals with PAYE and Tax Codes and Simple Assessment while another deals with Self Assessment.  The two bits don't seem to interact very well.  For years I have been getting Simple Assessments despite doing Self Assessment and it takes a call to the Self Assessment people to "switch off" the Simple Assessment.  The Simple Assessment people don't seem to be able to do it - perhaps because they can't see I do Self Assessment.

In principle if she does Self Assessment she should not get a Simple Assessment (the fact that I get one is some sort of glitch)

I don't know about the £3.4k in her tax code but do not assume the Revenue have the correct figures for interest.  They could have missed some accounts or they could have kept in estimates from previous years which should have been dropped because the account was closed

That makes sense, thanks. Do you know how to stop the Simple Assessment so we can continue with self-assessment?

Is she getting a Simple Assessment?  Someone asked but I did not see the answer.  If the issue is the tax codes then you can't switch them off.

She can do a self assessment even if she gets the simple assessment (unless HMRC tell her she doesn't need to do one any more).

As to switching off Simple Assessment I keep calling HMRC and after each call I think I have done it and then the next year I get another one so call again and the cycle repeats.  Maybe my last call last year did the trick.  I will find out in October or so this year.

I think my real message was that you should not be worried that one bit of HMRC can't see that she does Self Assessment.  

If you mean has she received the P800 or PA302 I am finding out tomorrow when I see her next. But as I said I don't think so.

When this first happened and I worked out what I thought was going on, I then thought it will be sorted out in the tax return. But to receive I think 5 change code notices in as many months is worrying. Having said that, some were for 24/25 and at least one was for 25/26. Also the most recent notice for 25/26 is dated January 2025. I suspect my mum received it in the past week as she showed it to me in the past week even though it was dated January. But as the letter has no specific date, I don't know if it was written before or after mum submitted her 23/24 tax return.