Under paid income tax 2024 - 2025

peteuk

Had a letter from HMRC, who have advised me that I have underpaid income tax by £637.60

Income - £49582.91
Deductions £312.00 - (unknown - edit now known as Job Expenses ?WFH allowance)

Tax allowance - £12570

Taxable income - £36700.91

Tax Paid £7340 (correct at 20%)

Adjustments - £1168.20 (unknown - edit under payment from 2022-23 and 2023-24 disputed as unaware of such)

I know that a couple of years ago, my tax codes changed because I had four jobs in a tax year, and I should have paid 40% on a small amount of wages.  That was in 2022, and the action was held from 2023 to 2024.  So why has 2024-2025 now done the same, when I am under the 40% tax bracket? 

Is there a way of breaking this seemingly yearly underpayment? I get the feeling even the £49582.91 figure is incorrect.

sheramber

What  was your code number  for  24/25?
 

peteuk

sheramber said:

What was your code number for  24/25?
 

I have two incomes so the 1257L was on my pension (£12352.02) and so I paid mainly 20% on my wage

Dazed_and_C0nfused

The £312 looks like you have made a claim for expenses relating to working form home.

The £1168.20 could be tax underpaid from a previous tax year?

Which is now reduced to £637.60?

peteuk

Dazed_and_C0nfused said:

The £312 looks like you have made a claim for expenses relating to working form home.

The £1168.20 could be tax underpaid from a previous tax year?

Which is now reduced to £637.60?

Finally got somewhere with HMRC - @Daz@Dazed_and_C0nfused I think your right. 

HMRC cant tell me what the £312 is so we have to assume work from home allowance.

The £637.60 is split from 2022-23 (£846.20) and 2023-24 (£531.60) of which - just over half has been paid back. 

I have now challenged this as according to my HMRC app I have only once earnt of the tax threshold, so therefore I have to assume that the underpayment is due to HMRC changing tax codes or applying the wrong one. 

This years tax payments look right, so lets see what magical figure they decide to sting me for next year. 

It would also seem that they are holding back action for a year. But here is what I do understand. 

1. I understand that they reevaluate the tax paid - hence writting to me in July about last years tax period. 
2. So therefore any action is delaid eg end of tax period 05 Apr 25, indicated X Jul 25, action taken tax year 2026. 

Now heres what I dont understand. 

• 2022-23 underpayment  - the majority has been paid back this would have been in 2024-25 but my tax is perfect on 20% 
• So if the £704 was paid back in 2023-24 how did I then get a further £531.60 underpayment when I didnt exceed the income tax threashold. 

The issue here is I have a basic wage and then earn £3000 on an extra shift allowance, and then my pension. Eg Wage £34K on paper, actual wage £37K and pension £12K means my taxable wage is £49K.  My taxable year ends are 

2021-22 - £55K (four employeers, two of which was at the same time - I note that this lead to a £844.20 underpayment*) 
2022-23 - £46K (£846.20 underpayment noted by given info above is £2.00) 
2023-24 - £47K (£531.60 Underpayment)
2024-25 - £49K  (£0 underpayment) 

*In review of the letter sent 2024 is suggests £844 of the outstanding is from 2021-22. 

peteuk

Update -

Advised complaint raised and call back within 48 hr, but may be longer...

Called today, as no call back, adviser recalculated everything and low and behold the amount is now £4.52

peteuk

Well they final came back to me....

We agree that there was an underpayment in 21/22 which was highlighted in the end of year tax round up in summer of 22.  This was due to be paid back during the 23/24 tax year.   

The end of year round up also noted an estimated £2.00 underpament for the year 22/23.  To resolve this the person on the phone pushed the 21/22 underpayment back to 24/25.

23/24 I working from home used £320 to reduce the underpayment however 24/25 noted that although I had paid back the full amount I had previously underpaid in 23/24 this giving a second underpayment. 

Although this is not infact an underpayment of income tax, it is an underpayment of the previous underpayment.  However due to the phone call in 2023 re £2.00 estimated underpayment.  The fix for that triggered the system to believe I had a second underpayment occur rather than a failure to underpay the previous in full. 

THey have apologised for this, they cant work out what they did in 2023, but know it was the issue, however im unsure why it has taken now to surface.  But they have confirmed that all underpayment has been either repaid or wiped (I was advised that an underpayment of under a certain amount they dont chase)