Tax code notice letter causing confusion

littlemoney

I have received a tax code notice letter but am confused by the entries

Less untaxed interest, is this meant to be tax on interest during 2024/25 tax year as the amount is approximately what I thought it would be.

Is is the next line I find confusing
Les adjustment for estimated tax you owe (this year) is that meant to be interest for 2025/26 tax year.

They have added both figures together and changed my tax code to cover 2 years of savings.

Does that mean I will have to pay tax for both years at the same time. 

Any help would be appreciated please as it's different from previous years as they are making an in year tax adjustment to collect this years estimated tax by 5 April 2026 .  Thank you

littlemoney

molerat said:

They are taking both the tax you owe for last year and the expected tax for this year.  If you don't think the interest estimate for this year is correct then you can adjust it in your personal tax account (or by phoning them). 

Is this something new, as I have not seen this before, especially wanting this year's to be paid before the end of this tax year

dinosaur66

i never knew hmrc could do this

hmrc to take or at least bill you for estimated interest i am guessing 6 months in advance

say you put 50k in premium bonds

20k in an isa

it was savings to pay for a house

you had a 3 year bond mature and now have put it in a 1 year

interest rates go down

all kind of examples where your following years interest will be lower than the current year

Dazed_and_C0nfused

molerat said:

They are taking both the tax you owe for last year and the expected tax for this year.  If you don't think the interest estimate for this year is correct then you can adjust it in your personal tax account (or by phoning them). 

I don't think that is what is happening.

This is what the op said 

Less untaxed interest, is this meant to be tax on interest during 2024/25 tax year as the amount is approximately what I thought it would be.

Is is the next line I find confusing

Les adjustment for estimated tax you owe (this year) is that meant to be interest for 2025/26 tax year.

Any tax owed for 2024/25 would be described differently.  The tax code is only collecting the (estimated) tax due for the 2025/26 tax year.

littlemoney

Dazed_and_C0nfused said:

molerat said:

They are taking both the tax you owe for last year and the expected tax for this year.  If you don't think the interest estimate for this year is correct then you can adjust it in your personal tax account (or by phoning them). 

I don't think that is what is happening.

This is what the op said 

Less untaxed interest, is this meant to be tax on interest during 2024/25 tax year as the amount is approximately what I thought it would be.

Is is the next line I find confusing

Les adjustment for estimated tax you owe (this year) is that meant to be interest for 2025/26 tax year.

Any tax owed for 2024/25 would be described differently.  The tax code is only collecting the (estimated) tax due for the 2025/26 tax year.

Sorry if I  am being thick and have I got this correct 

Next tax year they are collecting the tax on savings interest received in 2024/25.

They have estimated the tax on interest I have or will earn in 2025/26 and have altered my tax code to ensure it is paid by 5 April 2026.

Dazed_and_C0nfused

littlemoney said:

Dazed_and_C0nfused said:

molerat said:

They are taking both the tax you owe for last year and the expected tax for this year.  If you don't think the interest estimate for this year is correct then you can adjust it in your personal tax account (or by phoning them). 

I don't think that is what is happening.

This is what the op said 

Less untaxed interest, is this meant to be tax on interest during 2024/25 tax year as the amount is approximately what I thought it would be.

Is is the next line I find confusing

Les adjustment for estimated tax you owe (this year) is that meant to be interest for 2025/26 tax year.

Any tax owed for 2024/25 would be described differently.  The tax code is only collecting the (estimated) tax due for the 2025/26 tax year.

Sorry if I  am being thick and have I got this correct 

Next tax year they are collecting the tax on savings interest received in 2024/25.

They have estimated the tax on interest I have or will earn in 2025/26 and have altered my tax code to ensure it is paid by 5 April 2026.

The information you have given indicates that your current (2025/26) tax code has been changed to try and collect additional tax for 2025/26 only.  Which is normal.  HMRC will usually base the (estimated) interest deduction needed in this tax years tax code on the interest you received last year.  And then review next summer/autumn to see if any extra tax is owed or you are due a refund.

Nothing you have mentioned suggests the tax due for 2024/25 is being collected in your current (2025/26) tax code.

If you owe extra tax for last year (2024/25) you are normally sent a tax calculation, either a P800 or PA302.

A P800 is where the tax owed will be included in next tax years tax code (2026/27), although you can pay it direct to HMRC if you wish.

A PA302 (Simple Assessment) is where you have to pay the tax direct to HMRC, usually by 31 January after the end of the tax year the PA302 relates to.

sheramber

littlemoney said:

I have received a tax code notice letter but am confused by the entries

Less untaxed interest, is this meant to be tax on interest during 2024/25 tax year as the amount is approximately what I thought it would be.

Is is the next line I find confusing
Les adjustment for estimated tax you owe (this year) is that meant to be interest for 2025/26 tax year.

They have added both figures together and changed my tax code to cover 2 years of savings.

Does that mean I will have to pay tax for both years at the same time. 

Any help would be appreciated please as it's different from previous years as they are making an in year tax adjustment to collect this years estimated tax by 5 April 2026 .  Thank you

Interest for 25/26 has been estimated to be the same as 24/25  and that figure has been used to your amended  code number for 25/26.

As your code number is being changed  9 months after the start of the tax year the increased tax due has not been deducted for these 9 months. To collect this tax due an adjustement is   included  your tax calculation for 25/26 to collect this tax by 5 April 2026.


The tax underpaid for 24/25 will be collected in your code number for 26/27 unl;ess you pay it direct before then.

there will be details in your online personal tax account of how this was calculated and how to pay it, if you wish to do so.

littlemoney

sheramber said:

littlemoney said:

I have received a tax code notice letter but am confused by the entries

Less untaxed interest, is this meant to be tax on interest during 2024/25 tax year as the amount is approximately what I thought it would be.

Is is the next line I find confusing
Les adjustment for estimated tax you owe (this year) is that meant to be interest for 2025/26 tax year.

They have added both figures together and changed my tax code to cover 2 years of savings.

Does that mean I will have to pay tax for both years at the same time. 

Any help would be appreciated please as it's different from previous years as they are making an in year tax adjustment to collect this years estimated tax by 5 April 2026 .  Thank you

Interest for 25/26 has been estimated to be the same as 24/25  and that figure has been used to your amended  code number for 25/26.

As your code number is being changed  9 months after the start of the tax year the increased tax due has not been deducted for these 9 months. To collect this tax due an adjustement is   included  your tax calculation for 25/26 to collect this tax by 5 April 2026.


The tax underpaid for 24/25 will be collected in your code number for 26/27 unl;ess you pay it direct before then.

there will be details in your online personal tax account of how this was calculated and how to pay it, if you wish to do so.

I looked at my online personal tax account and there is nothing there to show how this was calculated. There is no details of the savings accounts and interest paid so I can check their figures as 2024/25 does not agree with my figures.

The HMRC amount shows total interest taxable, yet I thought that if they had already included an estimate in my previous tax code change for 2025/26 I assumed to take account of interest I would have already paid tax on some of the interest. 

sheramber

The only way to get details of what HMRC hold for bank interest for 24/25 is to ask them- by phone or letter.

The information is not online.

What is online is the p800 tax calculation showing how much tax is due on your totl taxable income and how much you have actually paid.  Any under or overpayment is shown on that.

If you alreqady had estimated bank interest included in your 25/26 tax code, is the new figure more? If so, you will not have poaid tax on thae difference for the months since the start of the tax year.

e.g if you had £200 included in your tax code and the new estimate is £500, then you have not paid tax since April 2025 on the £300 difference