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  • FIRST POST
    • spirit
    • By spirit 8th Mar 18, 7:40 PM
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    spirit
    Tax office claim i owe them
    • #1
    • 8th Mar 18, 7:40 PM
    Tax office claim i owe them 8th Mar 18 at 7:40 PM
    Hello all

    HMRC wrote to me before Christmas claiming I would owe them 1867.73 by the end of this tax year. It totally threw me since I am and have aways been employed on paye.

    A phone call to them didn't tell me why or how come. The letter said they had changed tax code to l190x from 1150l, . I rang back to have it investigated as I can't afford for them to take that amount in one hit. Nor can I really afford for them to take it in monthly instalments from the new tax year, over the whole year, which is what they said they'd do instead.

    Today's letter from them, but dated 6th feb? Says they've changed my tax code to 251L. So my personal allowance is 11850 less adjustment for tax owed from previous year. Total tax free amount 2512.

    So my questions are. Is the 2512 the amount I can earn before tax is payable? Also, as I am a single person household with no other income, what can I do if the deductions leave me seriously short for a whole year?
    Mortgage free as of 10/02/2015. Every brick and blade of grass belongs to meeeee.
Page 1
    • molerat
    • By molerat 8th Mar 18, 7:52 PM
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    molerat
    • #2
    • 8th Mar 18, 7:52 PM
    • #2
    • 8th Mar 18, 7:52 PM
    You will be able to earn 1/12th of 2512, 209, each month before you start paying tax. They will collect 155 of the owed tax off of you each month.

    You need to find out why you owe that amount ? Do you have a company car ?
    Last edited by molerat; 08-03-2018 at 7:54 PM.
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    • Dazed and confused
    • By Dazed and confused 8th Mar 18, 8:00 PM
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    Dazed and confused
    • #3
    • 8th Mar 18, 8:00 PM
    • #3
    • 8th Mar 18, 8:00 PM
    If you can post details of the breakdown of this tax year's new tax code (referred to as l190x in your op) you will be more likely to get some help in sorting this out.

    If you haven't got the tax code letter anymore you should be able to see the breakdown tonight by looking at your Personal Tax Account on gov.uk.
    • spirit
    • By spirit 8th Mar 18, 8:01 PM
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    spirit
    • #4
    • 8th Mar 18, 8:01 PM
    • #4
    • 8th Mar 18, 8:01 PM
    Hi. He's they said their prediction was that by the end of this tax year I'd owe 1867.73.

    No. I don't have a company car.

    I asked them if it was to do with a lump sum - from an old pension, that I took in May 2017. I paid emergency tax on that at the time. They said it couldn't have been because of that since it was long enough ago that they'd have noticed before Nov 2017.

    In fact the paperwork at the time of the lump sum payment said to do a claim for tax refund. Can't remember which form reference it is. It's in my file somewhere.
    Mortgage free as of 10/02/2015. Every brick and blade of grass belongs to meeeee.
    • Dazed and confused
    • By Dazed and confused 8th Mar 18, 8:09 PM
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    Dazed and confused
    • #5
    • 8th Mar 18, 8:09 PM
    • #5
    • 8th Mar 18, 8:09 PM
    The tax code notice is called a P2 Notice of Tax Coding.

    From the additional information you have posted it is quite possible you owe extra tax on the pension lump sum you received.

    Emergency tax code will mean you have received extra tax allowances you are probably not entitled to (this is normal for a first pension payment).

    If you can post the pension amount you were paid (gross taxable amount before tax plus the tax deducted along with your February (or March if already available) payslip details - taxable pay for the year to date and tax paid - then it might be possible to gauge how accurate the 1867 is.

    Did you get any professional advice about the tax consequences of taking the pension lump sum in the 2017:18 tax year?
    • spirit
    • By spirit 8th Mar 18, 8:28 PM
    • 2,714 Posts
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    spirit
    • #6
    • 8th Mar 18, 8:28 PM
    • #6
    • 8th Mar 18, 8:28 PM
    If you can post details of the breakdown of this tax year's new tax code (referred to as l190x in your op) you will be more likely to get some help in sorting this out.

    If you haven't got the tax code letter anymore you should be able to see the breakdown tonight by looking at your Personal Tax Account on gov.uk.
    Originally posted by Dazed and confused
    Thanks for your reply. I'll put here all they've said.

    First letter on 29 Nov. Letter to advise of new tax code for 6 April 2017 do 5th April 18. Personal allowance 11500, less adjustment for estimated tax owed 13419.(note relating to this says they think I will owe 1867.73 to be paid by 5 April 2018. Next line says (name of employer) 1919 is added to this income tax code k190x replaces 1150L. Thanks totals your tax free amount -1919. Estimated tax you owe this year 1867.73.

    Next letter dated 7 dec. Tax code notice for 6 Apr 017 to 5 apr 2018. Personal allowance 1150.(employer name) 1150 of this income is tax free tax code 1150L replaces K190x. (This is where they changed it back). This totals your tax free amount 11500. Estimated tax you owe this year 1867.73.

    Today's letter.Tax code letter for 6 apr 2018 to 5 apr 2019.
    Personal allowance 11850. Less adjustment for tax owed previous year 9338 total tax free amount t 2512.
    Total tax free Mount is used as follows
    (Employer name) 2512 of this income is tax free. Tax code 251L. This totals your tax free amount 2512. Note on the back says we. Told you that you owe 1867 from last year. Have included an adjustment to reduce my tax free allowance by 9338 so they can collect the 1867 by 5 apr 2019.

    I hope that was the info you needed?
    Mortgage free as of 10/02/2015. Every brick and blade of grass belongs to meeeee.
    • Dazed and confused
    • By Dazed and confused 8th Mar 18, 8:41 PM
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    Dazed and confused
    • #7
    • 8th Mar 18, 8:41 PM
    • #7
    • 8th Mar 18, 8:41 PM
    Given that the only entry (other than the Personal Allowance) in the original tax code informing you of the tax owed is an adjustment to collect the 1,867 then it is highly likely this is due to extra tax being owed on the pension payment you received.

    The next question is how accurate is the 1,867 and to try and work that out would involve knowing the pension information (taxable payment and tax deducted) and your taxable income and tax paid on your ongoing employment.
    • spirit
    • By spirit 8th Mar 18, 8:48 PM
    • 2,714 Posts
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    spirit
    • #8
    • 8th Mar 18, 8:48 PM
    • #8
    • 8th Mar 18, 8:48 PM
    The tax code notice is called a P2 Notice of Tax Coding.

    From the additional information you have posted it is quite possible you owe extra tax on the pension lump sum you received.

    Emergency tax code will mean you have received extra tax allowances you are probably not entitled to (this is normal for a first pension payment).

    If you can post the pension amount you were paid (gross taxable amount before tax plus the tax deducted along with your February (or March if already available) payslip details - taxable pay for the year to date and tax paid - then it might be possible to gauge how accurate the 1867 is.

    Did you get any professional advice about the tax consequences of taking the pension lump sum in the 2017:18 tax year?
    Originally posted by Dazed and confused
    Ok got the letter from Capita. Amount payable tax free 6140.79. Amount subject to tax 18422.38.

    It says that after 5 apr 2018 hmrc Will Check If Ive Paid The Right Amount Of Tax Or Not. It Says That The Tax deducted Will Be Emergency Code Week One -503L.

    However, If I Think Ive Paid Too Much Tax I Dont Have To Wait Til After 5 April 2018 And To Ask For Form P53a


    I did my own research before opting for the lump sum as was a relatively small amount.

    Thank you for your
    Help so far by the way.
    Mortgage free as of 10/02/2015. Every brick and blade of grass belongs to meeeee.
    • spirit
    • By spirit 8th Mar 18, 8:49 PM
    • 2,714 Posts
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    spirit
    • #9
    • 8th Mar 18, 8:49 PM
    • #9
    • 8th Mar 18, 8:49 PM
    Given that the only entry (other than the Personal Allowance) in the original tax code informing you of the tax owed is an adjustment to collect the 1,867 then it is highly likely this is due to extra tax being owed on the pension payment you received.

    The next question is how accurate is the 1,867 and to try and work that out would involve knowing the pension information (taxable payment and tax deducted) and your taxable income and tax paid on your ongoing employment.
    Originally posted by Dazed and confused
    We have on line payslips. Will check that in the morning.
    Mortgage free as of 10/02/2015. Every brick and blade of grass belongs to meeeee.
    • spirit
    • By spirit 8th Mar 18, 8:54 PM
    • 2,714 Posts
    • 6,205 Thanks
    spirit
    You will be able to earn 1/12th of 2512, 209, each month before you start paying tax. They will collect 155 of the owed tax off of you each month.

    You need to find out why you owe that amount ? Do you have a company car ?
    Originally posted by molerat
    What can I do if the 155 leaves me a bit short each month?
    Mortgage free as of 10/02/2015. Every brick and blade of grass belongs to meeeee.
    • spirit
    • By spirit 8th Mar 18, 9:08 PM
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    spirit
    If I end up owing them that, would I be better off paying it from that pension layout given its sitting in a cash isa at the moment, or leaving as is to come out of salary. Or just wait til my April salary goes in ( on 28th)?

    Sorry for so many questions and thank you.

    HMRC phone agents didn't seem to know what's what. They kept putting me on hold for ages whilst they asked someone else, but still didn't have any answers
    Mortgage free as of 10/02/2015. Every brick and blade of grass belongs to meeeee.
    • purdyoaten2
    • By purdyoaten2 9th Mar 18, 7:46 AM
    • 854 Posts
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    purdyoaten2
    If I end up owing them that, would I be better off paying it from that pension layout given its sitting in a cash isa at the moment, or leaving as is to come out of salary. Or just wait til my April salary goes in ( on 28th)?

    Sorry for so many questions and thank you.

    HMRC phone agents didn't seem to know what's what. They kept putting me on hold for ages whilst they asked someone else, but still didn't have any answers
    Originally posted by spirit
    It is more than possible that the taxable part of your pension payment brought you into higher rate tax. What will your earnings from your employment be in this tax year and what tax was paid on the 18422 - I am guessing 3684.40.
    purdyoaten lost his password
    • Linton
    • By Linton 9th Mar 18, 10:32 AM
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    Linton
    It is more than possible that the taxable part of your pension payment brought you into higher rate tax. What will your earnings from your employment be in this tax year and what tax was paid on the 18422 - I am guessing 3684.40.
    Originally posted by purdyoaten2
    3493 after 1 month of 11500/year tax allowance deducted. If the OP had a salary of about 35K, the unpaid tax on the pension payment would be around 1876 - near enough to match the actual numbers. As the Tax Allowance increases to 11850 for 2018/2019 the proposed reduced tax code is correct.
    • Dazed and confused
    • By Dazed and confused 9th Mar 18, 10:48 AM
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    Dazed and confused
    In a previous post the op states,

    Ok got the letter from Capita. Amount payable tax free 6140.79. Amount subject to tax 18422.38.

    It says that after 5 apr 2018 hmrc Will Check If Ive Paid The Right Amount Of Tax Or Not. It Says That The Tax deducted Will Be Emergency Code Week One -503L.


    So if the code 503L (which seems a bit odd in itself) was used with payment being treated as a monthly payment the tax deducted would be 6,917.56 which, even though it has allowed some Personal Allowance which isn't really available,should be more than sufficient to cover any tax which is going to be due for the year. Even if 100% into the 40% band the tax due would only be 7,368 so a small amount owing but significantly less than 1,867 and the lower the income at the ongoing employment the lower the tax due on the pension will be.

    Hopefully op will be able to confirm the tax deducted from the pension and recent payslip details later today and all will become clearer.
    • spirit
    • By spirit 9th Mar 18, 11:14 AM
    • 2,714 Posts
    • 6,205 Thanks
    spirit
    In a previous post the op states,

    Ok got the letter from Capita. Amount payable tax free 6140.79. Amount subject to tax 18422.38.

    It says that after 5 apr 2018 hmrc Will Check If Ive Paid The Right Amount Of Tax Or Not. It Says That The Tax deducted Will Be Emergency Code Week One -503L.


    So if the code 503L (which seems a bit odd in itself) was used with payment being treated as a monthly payment the tax deducted would be 6,917.56 which, even though it has allowed some Personal Allowance which isn't really available,should be more than sufficient to cover any tax which is going to be due for the year. Even if 100% into the 40% band the tax due would only be 7,368 so a small amount owing but significantly less than 1,867 and the lower the income at the ongoing employment the lower the tax due on the pension will be.

    Hopefully op will be able to confirm the tax deducted from the pension and recent payslip details later today and all will become clearer.
    Originally posted by Dazed and confused


    Hello,


    Ok, so my latest payslip is Feb 28th. it says


    Tax code 1150L period tax year
    2284.16 27994.35




    tax paid (in Feb) 265.00 Balance YTD 3488.80


    I don't know how to find out how much tax I actually ended up paying on the pension lump sum?
    Mortgage free as of 10/02/2015. Every brick and blade of grass belongs to meeeee.
    • Dazed and confused
    • By Dazed and confused 9th Mar 18, 11:21 AM
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    Dazed and confused
    Did you receive a P45 from the pension company?

    If not can you check what was received in your bank account, not perfect but it could be the non taxable element plus taxable element (which we know) less tax (unknown) = amount in bank so we could then have a stab at the tax figure.

    You are going to end up having some 40% tax to pay though as your salary plus taxable pension is going to be approaching 50k.
    • purdyoaten2
    • By purdyoaten2 9th Mar 18, 11:49 AM
    • 854 Posts
    • 406 Thanks
    purdyoaten2
    Hello,


    Ok, so my latest payslip is Feb 28th. it says


    Tax code 1150L period tax year
    2284.16 27994.35




    tax paid (in Feb) 265.00 Balance YTD 3488.80


    I don't know how to find out how much tax I actually ended up paying on the pension lump sum?
    Originally posted by spirit
    What was the net payment from the pension? The tax deducted will be 25463.17 less the amount lodged into your bank.

    (Sorry Dazed - your post was not on my screen when I replied)
    purdyoaten lost his password
    • spirit
    • By spirit 9th Mar 18, 11:59 AM
    • 2,714 Posts
    • 6,205 Thanks
    spirit
    Did you receive a P45 from the pension company?

    If not can you check what was received in your bank account, not perfect but it could be the non taxable element plus taxable element (which we know) less tax (unknown) = amount in bank so we could then have a stab at the tax figure.

    You are going to end up having some 40% tax to pay though as your salary plus taxable pension is going to be approaching 50k.
    Originally posted by Dazed and confused


    thanks Dazed and Confused, reading the letter again from Capita, it says they will send me a payslip confirming the gross payment, tax deducted and net payment in respect of the taxable element. they will also issue me a P45. None of which I've received.


    so I've called them and asked for a copy to be sent. So i'll have that in a week's time apparently.


    So in your view, you think the amount owing could be less that they've estimated?
    Mortgage free as of 10/02/2015. Every brick and blade of grass belongs to meeeee.
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