2025/26 Self assessment Underpaid tax

littlemoney

Apologies for the long post but I have questions regarding the underpaid tax section please and advice would be appreciated please to ensure my understanding is correct

For 2025/26 I received 3 tax code notices (P2).

Jan 25 tax code notice for 2025/26 stated I owed £927 tax from earlier year

2 February 2025 tax code notice for 2025/26 no reference to under paid tax

4 December 2025 tax code notice stated due to in year tax code adjustment I owed £944 and they were adjusting my tax code to collect this amount by 5 April 2026. This amount was in addition to the tax I owed from an earlier year

For the section:

Enter the amount of underpaid tax for earlier years included in your tax
code for 6 April 2025 to 5 April 2026 (from your PAYE Notice of Coding)

I assume I enter only £927 as this was for an earlier year?

The in year claculation in the Tax code notification can be ignored. Is this correct?

:For the section

Enter the amount of estimated underpaid tax for 6 April 2025 to 5 April
2026 to be included in your PAYE tax code for 6 April 2026 to 5 April
2027 (from your PAYE Notice of Coding)

My tax code notice for 2026/27 had no reference to underpaid tax so this value is zero as they made an in year adjustment in January 2026.

Again my apologies for the long post but I am a bit confused and trying to sort it out in my own mind. Thank you for reading and for helping with all my questions in my first year of self assessment.

UKTaxHelper

Your reading is right on both. That first box exists to take the earlier year tax back out of the figure on your P60, otherwise you'd get credit for it twice. The in year adjustment was 25/26 tax collected in 25/26, so it stays out of both boxes, it's already in the tax that was taken off you.

cunsimon007

UKTaxHelper's got it right. Just to put it another way in case it helps:

That first box is asking "how much old debt was HMRC collecting from you through your 25/26 tax code?" Your Jan 25 P2 shows £927 from an earlier year, so that's the number. The point of the box is to stop HMRC double-counting it, because your P60 will show a higher tax-deducted figure than you actually owe for 25/26 (since part of it was paying off that old debt).

The £944 from December is different. That's a 25/26 in-year adjustment, not an earlier year underpayment. HMRC spotted you were on track to underpay in the current year and tweaked your code mid-year to fix it before April. So that tax got collected in 25/26, it'll be in your P60 total, and SA doesn't need to know about it separately. It sorts itself out.

And yes, if your 26/27 coding notice doesn't mention any underpayment being collected, the second box should be/is zero.

One thing worth checking: make sure your P60 tax figure matches what you'd expect ( your normal 25/26 tax + the £927 + however much of the £944 adjustment actually got collected between Dec/ April). If those add up, you're sorted :-)

Shylock_249

"4 December 2025 tax code notice stated due to in year tax code adjustment I owed £944 and they were adjusting my tax code to collect this amount by 5 April 2026. This amount was in addition to the tax I owed from an earlier year"

I had something similar happen to me and received a P2 changing my code. It looked as though HMRC were collecting the money but then realised that they couldn't collect it all by the end of the tax year and gave me, without explanation, a massive tax return through one of my pensions. They sent out a 302 showing the full tax I owed, which I paid. I agreed with their figure.

I've had umpteen problems migrating to SA from Simple assessment especially when SA says I owe the same amount of money I'd paid to Simple Assessment. It took lots of phone calls to sort it out. I thought I'd got it sorted, submitted both my 24/25 and 25/26 Self Assessment returns and paid everything owed. My SA account says I don't owe any money. This Monday I received a letter from Simple Assessment Debt Department saying I owe £2045.20 the same figure Simple Assessment transferred to SA.

UKTaxHelper

HMRC can't hold a simple assessment for a year you've filed a return for, so that charge shouldn't exist any more. A nil SA statement won't clear it though, it's a separate record. Ask them to withdraw the simple assessment, in those words.