What is the best way to contact HMRC for explanation of tax statement

Wsb5tails

Mom is 93 and just had her 26-27 tax code notice. She did not have a high enough income to pay tax before Dad passed.

We understand most but not all of it, her income is reported correctly. She wants me to make contact with HMRC for answers. I have LPA for her but this has not been registered with HMRC yet.

We lost Dad, her husband in April 25. She has begun receiving small payments from his Annuities plus State Pension in her own name has been increased. Savings previously held in Dads name are now in hers attracting interest and therefore taxed.

She had 4 tax code adjustment letters for 25-26 which were anticipated and understandable as annuity payments were sorted out. She is worried sick about the line saying she has an adjustment for 26-27 for tax she owes from earlier years.

Is there any point in writing a letter to HMRC and getting her to sign it requesting the breakdown for the calculation? Any idea how long that takes and is there a better / quicker way of getting answers to stop her freaking out.

Keep_pedalling

Could you give us some actual numbers with regard to her income?

Wsb5tails

State Pension £10525 in 25-26 HMRC say she will receive £13081 in 26-27

Annuities were £4800 in 25-26. I don't know if they get an uplift while in payment to a beneficiary.

She had £800 in Saving Interest on 25-26.

Tax of £454 has been taken from her annuity payments.

HMRC say she owes £2271 in tax from previous years.

sheramber

You can phone with her beside you and she can authorise them to speak to you.

Have you checked her personal tax account?

Previous years’ calculations should be available on it.

Albermarle

She had £800 in Saving Interest on 25-26.

All basic rate taxpayers can earn up to £1000 in interest without paying tax, so no tax to pay.

In 25/26, she had taxable income of £15,325. Normally the personal allowance is £12,570, so £2,755 to be taxed at 20% = £551. So a little bit more than she was actually taxed, but not significant.

So the only obvious issue is where does £2,271 from previous years come from . Are you sure it says she owes that amount, or is her tax code adjusted by that amount, which would relate to only £454 in unpaid tax, which is coincidentally the amount paid in this tax year. Maybe they think the annuity payments started before 25/26 ?

Wsb5tails

Thanks for the reminder about the Savings Tax free allowance although I suspect she earned more than the £800 I'm aware of as I think there are some Savings Bonds rolling over.

Correct, it is the £2271 that we would like an explanation of.

Her tax code has been changed to K600

Dazed_and_C0nfused

https://forums.moneysavingexpert.com/discussion/comment/81915836#Comment_81915836

Don't forget State Pension is often paid 4 weekly. It is never paid monthly.

Albermarle

https://forums.moneysavingexpert.com/discussion/comment/81915836#Comment_81915836

Due to her low income she can earn more than £1000 in interest tax free due to the 'Starter Savings Rate' so this is one issue you can ignore.

If you can call them it can be a long wait to get through and sometimes you do not get through. However if you phone at 08.00 when the lines open, you normally get through it 10 to 20 minutes.

DRS1

When you say Savings Bonds rolling over do you mean NS&I Growth Bonds which ran over say 5 years? Those can dump a load of interest into one tax year and NS&I will report it that way to HMRC.

Dazed_and_C0nfused

https://forums.moneysavingexpert.com/discussion/comment/81915740#Comment_81915740

Do they really say she owes £2,271 or have they just reduced her tax code allowances by £2,271 to collect some underpaid tax?

Which might typically be ~£454.

You need to read all of the coding letter to understand that aspect of her code.

LITRG

Hi there, we set out all the different ways you can help someone with their taxes, including by talking to HMRC on their behalf here: https://www.litrg.org.uk/tax-nic/getting-help-tax/help-tax-friends-family-professionals-or-other-organisations#1.