Where Taxpayers and Advisers Meet

Taxman wants my money back

chelseafan
Posts: 2
Joined: Tue Nov 14, 2017 8:48 pm

Taxman wants my money back

Postby chelseafan » Tue Nov 14, 2017 9:03 pm

Hi
New to the forum.

I have just completed my first self-assessment for 2016-2017 whereby my annual income was £104k. This was made up of a base salary of circa £44k, bonus of £10k and £50k share options (all gross)
I realised that I might have to pay some money back back as I breached the £100k limit and this was confirmed when the GOV website stated that I owed just over £1200k. This isn't an issue.

In the process, I updated my projected income for 2017-2018 to £125k and received a notice that I had to pay back just over £3k and would lose my tax-free allowance. Fair enough as my current tax code is 105l (or something similar).

The issue I have is that they are going to take the £3k over the next 10 pay packets (I get paid fortnightly) which if I am reading this correctly means I am going to lose around £300 per pay packet.
This is a huge hit to my base salary (currently £1200 net per fortnight). After speaking to the tax office, I asked them if I could just pay the £1200 + £3000 up front and they tell me I can't and that the money needs to be taken via the tax code. Is this right ?
They have said that I can spread the £4k over the rest of this year and next year to make it a little easier but as I have some savings I would really like to have this off my back. Any suggestions would be greatly appreciated.

SteLacca
Posts: 278
Joined: Fri Aug 07, 2015 2:17 pm

Re: Taxman wants my money back

Postby SteLacca » Wed Nov 15, 2017 12:33 pm

Do you complete a Tax Return annually, or was it a one off?

If you do, ring them back, tell them it's your tax code, you are aware of problems with dynamic coding, and especially the integration with SA, and that you will pay any tax arising as a part of you self-assessment.

They should remove it.

chelseafan
Posts: 2
Joined: Tue Nov 14, 2017 8:48 pm

Re: Taxman wants my money back

Postby chelseafan » Wed Nov 15, 2017 1:49 pm

Thanks for the reply.

This was my first SA (for 2016-2017) and I suspect I will have to now complete one every year going forward.

As I see it, I owe £1200 for the SA of 2016/2107 which I think the Tax Office will take from me via a reduced code for 2017/2018. Ideally I would like to pay this outright but they are saying I can't as the system says my outstanding debt is £0

This years salary (including bonus & shares) will top £125k, surely as I will not complete a return for this year until Jan 2019, I can ask them to keep my current tax code and pay back the difference of (I'm assuming) £10k+ then? Either way I know I will have to pay eventually but I don't really want to give the government money until I absolutely have to.

Incidentally they are assuming that I get paid £125k / 12 months = £10,416 per month. That's not the case as the shares & bonus are an end of calender year lump sum which I have already paid 40%+ tax on. In reality my pay is circa £1700 per month gross.

This is so confusing!! :(

SteLacca
Posts: 278
Joined: Fri Aug 07, 2015 2:17 pm

Re: Taxman wants my money back

Postby SteLacca » Thu Nov 16, 2017 11:02 am

HMRC have given you incorrect information. If you have a tax liability, and elect to pay it in a single lump sum rather than via a coding adjustment, then they can most definitely accommodate this.

I suggest calling again and hope to speak to someone who has a clue (or if you get the same response, ask to speak to someone more senior).

Deskilling in HMRC will be the downfall of tax in this country.


Return to “Income Tax”