Savings tax interest - confused!

annie1276

ivormonee said:

annie1276 said:

You are an absolute superstar - thank you so very much, I’m honestly so grateful. Do let me know if you would like a gig as my tax adviser, obviously only after I’ve repaid my dues to HMRC Thanks heaps. 

Pleasure! Just to make sure - would you just like to check your HMRC records to verify that the total income shown, before any allowances are taken off, is £86,181? If it isn't, we would need to review the situation!

Thanks once again - I have now managed to locate my P60 and the income for the year shows as 83,231 (obviously minus the savings interest of £1066) with tax paid of 20,360 so both figures are lower than the calculations in the P800 - would change of job in the September possibly explain the difference too or should I query this? 

Dazed_and_C0nfused

annie1276 said:

ivormonee said:

annie1276 said:

You are an absolute superstar - thank you so very much, I’m honestly so grateful. Do let me know if you would like a gig as my tax adviser, obviously only after I’ve repaid my dues to HMRC Thanks heaps. 

Pleasure! Just to make sure - would you just like to check your HMRC records to verify that the total income shown, before any allowances are taken off, is £86,181? If it isn't, we would need to review the situation!

Thanks once again - I have now managed to locate my P60 and the income for the year shows as 83,231 (obviously minus the savings interest of £1066) with tax paid of 20,360 so both figures are lower than the calculations in the P800 - would change of job in the September possibly explain the difference too or should I query this? 

You really need to collate all of the relevant information.  If you had two jobs at the same time for tax purposes then it isn't unusual for you to owe tax as a result of that.

For example original employer paid you in tax month 6 (month to 5 October) and your new employer also paid you in tax month 6 and you didn't have a P45 to give you new employer straight away then you could well have received the benefit of two months of tax code allowances in one month.

Which for a higher rate payer could well result in tax owed of getting on for £400, separately to the tax owed on the interest.

ivormonee

annie1276 said:

Thanks once again - I have now managed to locate my P60 and the income for the year shows as 83,231 (obviously minus the savings interest of £1066) with tax paid of 20,360 so both figures are lower than the calculations in the P800 - would change of job in the September possibly explain the difference too or should I query this? 

Dazed_and_C0nfused said:

You really need to collate all of the relevant information. 

Hi Annie1276, as Dazed_and_confused says, we don't now have the full picture. Here's why:

Your P60 shows your empl. inc. as £83,231. What does your tax code show? Is it 1347* (*=a letter)? If yes, then we have £1,884 of unaccounted income (not from these employments or from savings). If the tax code is something else, then the discrepancy will differ again.

Given the figure in the P60, it strongly suggests that you provided a P45 from the first job to the second one. Even if there was a period where the incorrect tax was paid because the second job did not have the P45 in time for the first payroll run, it would have come out in the wash in the following pay period.

Previously, I think you may have said that HMRC stated tax paid on empl. inc. (through PAYE) was £20,378.40. This differs by £378.40 to the figure on your P60. This suggests that you paid tax of £378.40 through some other mechanism on some other income.

To get to the bottom of this we would need to establish what your total income is and what allowances you had. We can then rework the above calculation with the actual numbers. The screenshots you posted earlier show most of the info. but there would be a bit of info. above this that shows all the income and the allowance used.

It's easily solvable, but we just have a couple of pieces currently missing from the puzzle!

annie1276

Thanks for continued support in unpicking this! Screenshot below shows income details (with personally identifying info obviously blacked out - top source of income is first job from April to September, next one down is second job from September). Tax code is indeed 1347L ….

ivormonee

So the original calculation is using the correct figures (the ones that agree to HMRC) and so the resulting £606 tax is correct and as I showed in the calculation. However, read on ...!

But, and this is the key question, what we don't have an answer to is: if HMRC's figures are right, how is it that their figure for employment income of £85,121.03 differs from your P60 employment figure of £83,231.00? That's a difference of £1,890.03, as I pointed out in my earlier post, above!

The employment figure that HMRC has should match your P60. As it doesn't, something is amiss, so we're not quite there yet. If HMRC's employment income figure is wrong, then your tax position is wrong. If the P60 is wrong, then your tax position is correct. (Probably, but we won't know with certainty until we have the full picture!).

Do you want to double check your P60 and also see if you have a copy of your mid-year P45? These will provide clues!

annie1276

Once again, thank you for persevering with this and continuing to help me! Below is the relevant info from the P60 - you can see the discrepancy with the P800 is the pay and tax from the first job. The P60 figures exactly match my P45 from the September and my final payslip from that employment …

Dazed_and_C0nfused

annie1276 said:

Once again, thank you for persevering with this and continuing to help me! Below is the relevant info from the P60 - you can see the discrepancy with the P800 is the pay and tax from the first job. The P60 figures exactly match my P45 from the September and my final payslip from that employment …

It is highly likely to be a payment the first employer made after your P45 was issued (known as a payment after leaving).

That should have had tax code 0T operated against it, which would have been 20% tax in your case but you actually need to pay 40% tax on it.  So you owe an extra £378 for that alone.

ivormonee

That seems to be the only explanation. I say this because:

HMRC must have got the employment income figures from the employers. The first employer must have paid a salary of £36,243.04. The final payment that may not have made it onto the P45 could have been some residual holiday pay or something. To be completely sure, you should have got a payslip (the very last one you received) and that should show the accumulated income figure (which should be £36,243.04 with corresponding tax of £7,652.80) - ie. will match HMRC's figures. It will then also match my original full calculation, subject to a £6 discrepancy because you had said that your additional allowance was £900, whereas it turned out to be £906!
I note you said that "The P60 figures exactly match my P45 from the September and my final payslip from that employment", so could it be that there was one further payslip that you received after receiving your P45? And if you didn't get a final payslip, or perhaps have mislaid it, could you check your bank account after leaving for a payment amount of £1,512. That would also prove our analysis. Otherwise this working hypothesis might start to look a little skeptical! And then we'd have to start again! 

annie1276

Thanks so much again, both. There have been no payments to me since my last payslip in September 2024 which matches the P60 and P45 figures so I’m a bit baffled - but will say I’ve had a previous tax code issue where the same employer reported to HMRC that I was receiving benefits I wasn’t actually receiving so I wonder if they have reported the figures in error. Think it may be worth a call to them tomorrow to ask, before I even think about doing battle with the dreaded HMRC phone line! 

Thanks so much again to everyone who has helped me - I have been baffled that I could owe so much tax just on savings interest and couldn’t make the figures add up so I’m grateful of help in unpicking that something else is going on. It may help if HMRC said on the P800 where ALL of the apparently unpaid tax is coming from rather than just applying a blanket statement that it’s to do with savings interest! 

ivormonee

I added a paragraph by editing my last post which crossed in the post with your message! Perhaps you might want to just do that additional check, just in case it uncovers something!