Underpaid Tax - Newby Questions

[MPF2017]

Hi All

I've had a search through some of the forum topics, but am still not quite sure what is going on, and am still trying to establish whether I am coded correctly or not...

For context, I have a full-time job (currently since Jun 2014) and a part-time job (since 2009), both of which are under the PAYE regime.


In Jan 16, I received a P2 for 2016-2017, with a tax code of 1104L for my full-time job, and D0 for my part-time job.

In Oct 16, I received a P800 stating that I had underpaid income tax in the 2015-2016 tax year, to the tune of £677.60 and that this outstanding amount would be collected via increased taxation in the 2016-2017 tax year. So far, so good - seems straight-forward and reasonable (apart from the fact that HMRC did not provide me with any information as to which employer had failed to calculate my deductions properly).

I then heard nothing from HMRC until Jan 17, when I received a P2 for 2017-2018, this time with a tax code of 815L for my full-time job and BR for my part-time job, with an Underpayment Restriction of £3388 (reasonable, as £677.60 = 20% of £3388, and but which contradicts the HMRC advice in Oct 16 that my underpayment would be recovered in the 2016-2017 tax year.

In Sep 17, I received another P2 for the 2017-2018 tax year, with a tax code of 1086L against my full-time job and BR for my part-time job, and which notes that my allowance has been reduced by $676 (the amount underpaid in 2015-2106, and which should have been recovered during 2016-2017).

A couple of day later, I then received another P800 indicating that I had underpaid during the 2016-2017 tax year, by £135.20, that they will increase the tax on my income, and that I will 'shortly' be provided with a new tax code. I am still waiting for a revised P2.

At this point in time, I am confused about what HMRC are doing, how much of the initial 2015-2016 underpayment - if any - has still not been collected.

I am not overly familiar with HMRC actions but, if there is anything outstanding at this time, this - to me - smacks of poor management on their part. Is it unreasonable of me to have that perspective?

TIA

[SteLacca]

In October 2016 we were already half way through 2016/17, and so they couldn't collect a 2015/16 underpayment via your 2016/17 tax code, and I suspect you may have misunderstood (it would be 2017/18 at the earliest that it could be collected).

This year, HMRC have introduced what they call "Dynamic Coding", which is their attempt to make tax code adjustments closer to real time than previously, and a part of this is to try to collect underpayments more quickly. However, the whole system seems to be a bit hit and miss, and what they will actually do (or whether they will do it correctly) is anybodies guess.

[MPF2017]

Thanks - I shall await the future with interest...