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Where Taxpayers and Advisers Meet

Advice please on tax refund via re-coding and sipp

Pssst
Posts: 10
Joined: Tue Jan 19, 2016 5:28 pm

Advice please on tax refund via re-coding and sipp

Postby Pssst » Tue Jul 02, 2019 12:28 pm

Last year the HMRC adjusted my tax code and pushed a big refund to me via my PAYE income one month. I didnt understand it at the time but i think it may have been that the previous year, i contributed to a SIPP and put on my SA that it was a one off contribution. I spoke to HMRC and got them to put my tax code back to how it was. This has now left me "owing " the money at the end of the tax year. WHY so they do this? it just creates confusion for amateurs like me. Also,, If you are a higher rate taxpayer is the means by which HMRC refund you the additional HR TR by increasing your basic rate band on the SA form when you input the gross pension contribution..? Thanks all

robbob
Posts: 2780
Joined: Wed Aug 06, 2008 4:01 pm

Re: Advice please on tax refund via re-coding and sipp

Postby robbob » Wed Jul 03, 2019 8:56 am

WHY so they do this? it just creates confusion for amateurs like me. Also,, If you are a higher rate taxpayer is the means by which HMRC refund you the additional HR TR by increasing your basic rate band on the SA form when you input the gross pension contribution..? Thanks all
HMRC really should attach a big red warning flag to all paye coding notices - advising they are reasonable estimates that may not always result in the correct amount of tax being collected.
The onus unfortunately is 100% you to go and do your research in this regard.
Sometimes its simply impossible for hmrc to predict the outcome - eg bod has two jobs and second one may or may not put them in higher rate tax. Or if there are estimates pension or expense claims in your tax code.
They have added to problems recently by moving bods to w1 codings with adjustment for prior year estimate - god knows who thought that was a sensible idea.

Ok back to your questions.

Also,, If you are a higher rate taxpayer is the means by which HMRC refund you the additional HR TR by increasing your basic rate band on the SA form when you input the gross pension contribution..?
Yes your basic rate band is extended when you (not your employer though !!) make pension contributions on which hmrc add 20% into the pot. This basic rate band is extended by the grossed up pension payment made - and will hopefully result in the extra 20% tax "reduction" for most bods with earnings below 100k but in fully in higher rate.

someone
Posts: 371
Joined: Mon Feb 13, 2017 10:09 am

Re: Advice please on tax refund via re-coding and sipp

Postby someone » Wed Jul 03, 2019 2:38 pm

Can't help you with this year but I've found if you put the figures you want them to use in the whitespace of your SA return they do seem to read them and act on them.

I got 'clobbered' due to a redundancy payment causing the pension taper to kick in. In the white space I said what I expected the next years income and pension contributions would be and they did use them for my tax code and didn't assume I'd overpay into my pension again.

Likewise, my new employer offers payroll giving so I switched most of my charitable giving to that. Again, in the whitespace I said I'd done that and next years tax return would have a much lower gift aid - again they adjusted my tax code as expected within a couple of weeks of submitting my return.

When I've tried ringing up to change my tax code they don't seem able to adjust a single figure but want to go through everything - which is a pain when many of the things you don't know but 'just use last years figure because I don't know' doesn't cut it with the telephone script.


(the whitespace itself is hard to use 'invalid character' and then you have to try and spot the colon you've used)


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