Updating Estimated Income on HMRC online

DoctorStrange

I've checked my personal tax account online, and my estimated income was showing way too low, so I updated that to better reflect my estimate.

My first question is that (I think) I've read on here that, if you update your estimate and get it wrong, HMRC can apply interest to any tax due later - is that actually correct? Assuming so, I presume that'd only be the case if you reduce your estimate? i.e. increasing it so that more tax is collected shouldn't trigger any issues if I end up earning less than I think?


My second question is how to increase the non-coded estimate as well, and whether that's even needed? 

I tried to just enter a new value but it's asking me to reconfirm my name, address, NI number etc which made me pause as I'm not trying to make wholesale changes, just provide a more accurate estimate of the additional income I expect. 

If it helps, my estimated salary will remove the PA so I'm thinking that perhaps I can just ignore the non coded income section, as it won't make any difference to my self assessment next year?

Dazed_and_C0nfused

DoctorStrange said:

I've checked my personal tax account online, and my estimated income was showing way too low, so I updated that to better reflect my estimate.

My first question is that (I think) I've read on here that, if you update your estimate and get it wrong, HMRC can apply interest to any tax due later - is that actually correct? Assuming so, I presume that'd only be the case if you reduce your estimate? i.e. increasing it so that more tax is collected shouldn't trigger any issues if I end up earning less than I think?

My second question is how to increase the non-coded estimate as well, and whether that's even needed? 

I tried to just enter a new value but it's asking me to reconfirm my name, address, NI number etc which made me pause as I'm not trying to make wholesale changes, just provide a more accurate estimate of the additional income I expect. 

If it helps, my estimated salary will remove the PA so I'm thinking that perhaps I can just ignore the non coded income section, as it won't make any difference to my self assessment next year?

What interest are you referring to?  I suspect you are conflating different things there.

Non-coded income is used to establish your (provisional) Personal Allowance but if bour estimated earnings are high enough that it will be reduced to £0 anyway it really won't make any difference.

Ultimately your tax return will finalise everything and that is what determines the actual Personal Allowance due (if any).

DoctorStrange

"What interest are you referring to?  I suspect you are conflating different things there."

For example, if HMRC's estimate of my total coded income was £150k (e.g. no PA and I'd be on a 0 tax code). If I  went into my online tax account and changed that estimate to £99k (to restore the PA, and get a 1250 tax code) then potentially I'd be under taxed via PAYE if my actual income was indeed closer to the £150k mark.

If such a thing were to happen, then at SA time I'd have to pay the difference and I understand that HMRC would also apply interest in this situation as I've "gamed the system" a little by delaying tax. 

Is that understanding correct?

(I think my understanding comes more from examples of people adjusting (i.e. lowering) the non-coded income rather than the coded income section, but I imagine the outcome is the same for both?)


"Non-coded income is used to establish your (provisional) Personal Allowance but if bour estimated earnings are high enough that it will be reduced to £0 anyway it really won't make any difference."

That's what I'm thinking i.e. because I've already updated my estimated coded income to remove the PA, I can just ignore the fact the HMRC estimate of the non coded income is so low?. I.e. they won't charge interest on the tax due for this as I'm already on a 0 code?