Previous years unpaid tax affecting this year

iamconfused_2

Hi, I have completed my SA form and have been sent a bill for £92.30. This seems to relate to unpaid tax of £119.93 for 60/07 as on the statement my income tax due after dividend tax credits is £1837.66 and then they add on the previous underpaid tax in my tax code for 06/07 making total tax payable of £1957.59. As I have already paid £1865.29 through PAYE the outstanding bill is £92.30 but I cant get my head round why the previous years under payment comes into the calculation at all as I have already paid this through my tax code.
Any help would be appreciated, I am probably being particularly dim!

fengirl_2

If the brought forward underpayment was left out of the calculation, then you would end up with an overpayment!

Your tax caluculation for a year has to include all income and tax paid, including unpaid tax brought forward or else the calculation would not be accurate. You might as well say that your personal allowance should not be included in the calculation as it has already been included in your tax code!