Tax coding / underpayment help

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dakotadveils
dakotadveils Posts: 21 Forumite
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in Cutting tax
Good day,

Could anyone possibly help as I am having no joy getting a sensible answer out of HMRC and I am very confused myself.I have received notification of an underpayment of £2.8k in income tax and my tax coding has been adjusted to 164L for 2017-2018. I am at a complete loss as to why there is this underpayment.

I have used various online calculators (HMRC and salary calculator) and the amounts do not add up. The only underpayment was a Tax letter stating £15.83 Underpayment during 2014-2015 tax year.


Below is my salary info and shows when my BIK changed due to receiving a company car.


Any help much appreciated

Month______Gross____Tax________Ni_________Tax coding______BIK
Apr/15____3405.24___504.2_____327.99_____ Tax code 1026L__BIK (annual £736)** Tax letter stating £15.83 Underpayment during 2014-2015 tax year
May/15_____3570_____537.2______343.96_____Tax code 1026L
Jun/15_____3570_____555.85_____343.96_____Tax code 1026L
Jul/15_____3570_____521.4______343.96_____Tax code 1026L
Aug/15_____3570_____541.45_____343.96_____Tax code 1026L
Sep/15_____3570_____541.45_____343.96_____Tax code 1026L
Oct/15_____3570_____541.45_____343.96_____Tax code 1026L
Nov/15_____3570_____541.45_____343.96_____Tax code 1026L
Dec/15_____3570_____541.45_____343.96_____Tax code 1026L
Jan/16_____3570_____541.45_____343.96_____Tax code 1026L
Feb/16_____3570_____541.45_____343.96_____Tax code 1026L
Mar/16_____3570_____541.45_____343.96_____Tax code 1026L
BIK change - company car received 28/03/16(annual £6913)

Apr/16_____3,534.30_____542.26_____347.76_____Tax code 1026LM__BIK (annual £736 + £6913)
May/16_____3,534.30_____542.27_____347.76_____Tax code 1026LM1
Jun/16_____3,892.30_____892.66_____356.22_____Tax code 391LM
Jul/16_____3,534.30_____749.46_____347.76_____Tax code 391LM
Aug/16_____3,534.30_____749.46_____347.76_____Tax code 391LM
Sep/16_____3,892.30_____892.66_____356.22_____Tax code 391LM
Oct/16_____3,534.30_____749.46_____347.76_____Tax code 391LM
Nov/16_____3,534.30_____749.46_____347.76_____Tax code 391LM
Dec/16_____3,534.30_____749.46_____347.76_____Tax code 391LM
Jan/17_____3,534.30_____749.46_____347.76_____Tax code 391LM
Feb/17_____3,534.30_____749.46_____347.76_____Tax code 391LM
Mar/17_____3,534.30_____749.46_____347.76_____Tax code 391LM

APR 17 on wards tax code 164L - just no idea why!!
BIK (annual £6913 (no medical insurance was £736)


Kind regards and thank you for any help
MC
«1

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  • uknick
    uknick Posts: 1,629 Forumite
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    Have you tried looking at your online tax code calculation using the Personal Tax Account system?


    https://www.gov.uk/personal-tax-account
  • MichelleUK
    MichelleUK Posts: 428 Forumite
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    Could you post the benefit in kind figures that actually show on your P11D?

    You are showing that both your car and medical insurance have stayed the same over two tax years, but HMRC usually increase the car benefit each year and the medical companies usually do too! HMRC will be using the P11D figures, so it is important that you use the same.

    Also, as a safety check, please supply the total taxable pay, total tax and final tax code as shown on your P60 for both years?
  • dakotadveils
    dakotadveils Posts: 21 Forumite
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    2015-2016 Gross salary £42675.04 + BIK £717 (Medical insurance) tax code 1026L
    2016-2017 Gross Salary £43127.60 + BIK Car £5816 and £736 on medical tax code 391LM
    2017-2018 Gross Salary £45k + BIK Car £6913 Tax code 164L
  • dakotadveils
    dakotadveils Posts: 21 Forumite
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    I've used that and my tax is spot on with what I've paid over the year - this is where Ive got confused where this so called £2.8k underpayment has come from. I have no tax coding info for this year from HMRC, I only noticed on my payslip after getting a pay rise and taking home less than before the rise!
  • MichelleUK
    MichelleUK Posts: 428 Forumite
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    dakotadveils wrote: »
    2015-2016 Gross salary £42675.04 + BIK £717 (Medical insurance) tax code 1026L
    2016-2017 Gross Salary £43127.60 + BIK Car £5816 and £736 on medical tax code 391LM
    2017-2018 Gross Salary £45k + BIK Car £6913 Tax code 164L
    Looking at these and your previous figures, it looks like you have underpaid approx. £310 in 2015/16 and £206 in 2016/17.

    I would suggest you do the following:

    1. As per the post by uknick, check your personal tax account and it will tell you how your current tax code of 164L has been calculated.
    2. Phone HMRC and ask them to send you a P800 for each of the tax years 2015/16 and 2016/17. I presume you already have one for 2014/15 as you mention that HMRC did inform you of the original £15.83 underpayment.
    3. Once you have the P800's, you should be able to check off the details against your P60's and P11D's and see where the difference arises. They may have extra income that you have not included - interest, dividends, taxable benefits etc.

    Hopefully, you will then find out the detail behind the £2.8k underpayment and then you can decide on your next steps.
  • MichelleUK
    MichelleUK Posts: 428 Forumite
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    edited 14 June 2017 at 3:17PM
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    One last thought....

    Is the £2.8k that you mention, definitely the amount of tax that they say is underpaid....or is it the amount that they have taken from your tax code?
  • [Deleted User]
    [Deleted User] Posts: 0 Newbie
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    MichelleUK wrote: »
    One last thought....

    Is the £2.8k that you mention, definitely the amount of tax that they say is underpaid....or is it the amount that they have taken from your tax code?

    I reckon that you are spot on with your assumption.
    Code has reduced by 227 when it should have increased by 50 - a difference of 277 which translates into a loss of personal allowances of 2770 - not far off the mark!

    Also - from the op - BIK 2017/18 is 6913. Full personal allowance of 11500 less BIK 6913 less underpayment restriction 2800 is 1787 - again not far off the mark in translating into a code of 164L.
  • MichelleUK
    MichelleUK Posts: 428 Forumite
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    edited 22 January at 3:51PM
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    [quote=[Deleted User];72697787]I reckon that you are spot on with your assumption.
    Code has reduced by 227 when it should have increased by 50 - a difference of 277 which translates into a loss of personal allowances of 2770 - not far off the mark!

    Also - from the op - BIK 2017/18 is 6913. Full personal allowance of 11500 less BIK 6913 less underpayment restriction 2800 is 1787 - again not far off the mark in translating into a code of 164L.[/QUOTE]

    I could kick myself that it only occurred to me after I had typed up my long post.....mind you, it was a useful distraction from the gardening that I promised myself I would get done today!
  • dakotadveils
    dakotadveils Posts: 21 Forumite
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    definitely underpayment that they have advised.
  • dakotadveils
    dakotadveils Posts: 21 Forumite
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    Thank you very much for all your help, its much appreciated.
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