Tax Code changes and HMRC no knowledge of SA returns

eskbanker

lr1277 said:

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

[...]

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.

Does the tax code notice really make reference to income being 'undercounted'?

I'd have thought it more likely that they'd have seen the thousands of pounds of savings interest paid in 2023/24, and assumed (as usual) that there will be the same amount in 2024/25, and therefore are seeking to recover the corresponding amount of tax sooner than the next SA submission?

lr1277

eskbanker said:

lr1277 said:

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

[...]

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.

Does the tax code notice really make reference to income being 'undercounted'?

I'd have thought it more likely that they'd have seen the thousands of pounds of savings interest paid in 2023/24, and assumed (as usual) that there will be the same amount in 2024/25, and therefore are seeking to recover the corresponding amount of tax sooner than the next SA submission?

Undercounted was the word I used. I can't remember the exact working on the HMRC letter.

I am seeing mum tomorrow so might get more details then.

Perhaps you are right. The current Chancellor needs as much tax revenue as soon as possible so the Treasury is taking measures to attain that goal?

lr1277

Saw my mum today. Here is recent timeline of events:

First tax code change letter of the year dated 7/01. Not sure when it was received.

She submitted her 23/24 tax return on 9/01.

Tax paid on 26/01.

Another tax code letter generated dated January 2025. Received in the past week.

The phrases on the tax code letter were:

Personal Alllowance

Total

Less State Pension

Less Untaxed Interest

Less Adjustment for tax you owe (earlier year)

As stated above, I probably need to accept one part of HMRC doesn't know what another part of HMRC is doing. Also that it should all be sorted out in the tax return. Sigh.

Thanks for your comments.

eskbanker

lr1277 said:

eskbanker said:

lr1277 said:

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

[...]

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.

Does the tax code notice really make reference to income being 'undercounted'?

I'd have thought it more likely that they'd have seen the thousands of pounds of savings interest paid in 2023/24, and assumed (as usual) that there will be the same amount in 2024/25, and therefore are seeking to recover the corresponding amount of tax sooner than the next SA submission?

Undercounted was the word I used. I can't remember the exact working on the HMRC letter.

I am seeing mum tomorrow so might get more details then.

Perhaps you are right. The current Chancellor needs as much tax revenue as soon as possible so the Treasury is taking measures to attain that goal?

It's standard practice to adjust tax codes when savings interest is expected, based on that earned in previous years, so that's nothing new.

Does the latest letter identify which tax year the untaxed interest relates to?

sheramber

lr1277 said:

Saw my mum today. Here is recent timeline of events:

First tax code change letter of the year dated 7/01. Not sure when it was received.

She submitted her 23/24 tax return on 9/01.

Tax paid on 26/01.

Another tax code letter generated dated January 2025. Received in the past week.

The phrases on the tax code letter were:

Personal Alllowance

Total

Less State Pension

Less Untaxed Interest

Less Adjustment for tax you owe (earlier year)

As stated above, I probably need to accept one part of HMRC doesn't know what another part of HMRC is doing. Also that it should all be sorted out in the tax return. Sigh.

Thanks for your comments.

Code numbers for 25/26 were issued 31 January 2025.

HMRC knew the  increase  in state pension from 5 April 2025 so were able to update the code numbers which would be done by a computer  based on the information held , not by a person.

If issued 31 January 2025 the information would be reviewed before that date. Coding notices are printed and passesd to Royl Mail for delivery. When they are delivered  depends on Royal Mail.

Have you checked her personal tax account online to see what information is shown there?

lr1277

eskbanker said:

lr1277 said:

eskbanker said:

lr1277 said:

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

[...]

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.

Does the tax code notice really make reference to income being 'undercounted'?

I'd have thought it more likely that they'd have seen the thousands of pounds of savings interest paid in 2023/24, and assumed (as usual) that there will be the same amount in 2024/25, and therefore are seeking to recover the corresponding amount of tax sooner than the next SA submission?

Undercounted was the word I used. I can't remember the exact working on the HMRC letter.

I am seeing mum tomorrow so might get more details then.

Perhaps you are right. The current Chancellor needs as much tax revenue as soon as possible so the Treasury is taking measures to attain that goal?

It's standard practice to adjust tax codes when savings interest is expected, based on that earned in previous years, so that's nothing new.

Does the latest letter identify which tax year the untaxed interest relates to

The latest tax code change notice does not say which year the interest was incurred.

One prior tax code notice mentioned interest from tax year 23/24. Let's say it said £650 underpaid.

Another tax code change notice was for the tax year 24/25. That said the tax underpayment was £35. These 2 figures were added together. Then as I said another notice relating to tax year 25/26.

lr1277

sheramber said:

lr1277 said:

Saw my mum today. Here is recent timeline of events:

First tax code change letter of the year dated 7/01. Not sure when it was received.

She submitted her 23/24 tax return on 9/01.

Tax paid on 26/01.

Another tax code letter generated dated January 2025. Received in the past week.

The phrases on the tax code letter were:

Personal Alllowance

Total

Less State Pension

Less Untaxed Interest

Less Adjustment for tax you owe (earlier year)

As stated above, I probably need to accept one part of HMRC doesn't know what another part of HMRC is doing. Also that it should all be sorted out in the tax return. Sigh.

Thanks for your comments.

Code numbers for 25/26 were issued 31 January 2025.

HMRC knew the  increase  in state pension from 5 April 2025 so were able to update the code numbers which would be done by a computer  based on the information held , not by a person.

If issued 31 January 2025 the information would be reviewed before that date. Coding notices are printed and passesd to Royl Mail for delivery. When they are delivered  depends on Royal Mail.

Have you checked her personal tax account online to see what information is shown there?

Thanks.

We tried to check her personal tax account. Mum has a goverment gateway ID and password, which is used by Taxcalc to submit her returns.

On trying to access the personal tax account, mum was required to prove herself. We chose not to use the facility to take her photograph, but instead supply details from her documents.

So supplied details from her passport and driver's licence, and the only message the system came back with was that the details did not match the details held on file. Which obviously meant access was denied. When we contact HMRC about the tax codes, and then ask about access to the personal tax account, none of the people we spoke to could provide any useful information about gaining access. Bah humbug!

sheramber

Do the do the details on the documents agree exactly with the name/ address held by HMRC. e.g. name includes middle  name/ initials etc. 

Have you tried online helpline

Contact HMRC:

If you are having trouble proving your identity, you can contact HMRC for assistance. 

• Online Helpdesk: Contact the HMRC Online Helpdesk. 
• Phone: Call HMRC for an update on 0300 200 3300. 

lr1277

Thanks @sheramber I did not know there was a separate number for online support.

Matching names is tricky. As we are from abroad, my mum's name is different  with different organisations. With her passport it was a 2 word surname. However with HMRC it used to be a one word surname but in December when we tried logging into the personal tax account and failed, we contacted HMRC and told them to change it to the 2 word surname, the same as in her passport. Her driving licence is a one word surname. One recent thread on here suggest that it might be difficult to change but I have never looked into the matter.

Now the details we enter for verification do match the documents provided by each organisation. Yet it still fails.

When I next get a chance to visit my mum during the week, we will try the online helpdesk. Thanks.