This site uses cookies. By continuing to browse the site you are agreeing to our use of cookies. To find out more about cookies on this website and how to delete cookies, see our Cookie Policy.
Analytics

Tools which collect anonymous data to enable us to see how visitors use our site and how it performs. We use this to improve our products, services and user experience.

Essential

Tools that enable essential services and functionality, including identity verification, service continuity and site security.

Where Taxpayers and Advisers Meet

HMRC confusion on £3000 underpayment

Dave12335
Posts: 23
Joined: Sat Feb 09, 2019 10:09 am

HMRC confusion on £3000 underpayment

Postby Dave12335 » Fri Sep 20, 2019 8:29 pm

Hi tax friends

Could anyone help me with the following situation, please ?

The “exam question” is if an underpayment of less than £3000 tax is due in 19-20 or 20-21 ?

16-17 no underpayments in previous years
17-18 I had a small paye underpayment of approx £220
18-19 I had a large underpayment (as I changed jobs and my P45 never got processed properly, so I think I got a whole tax allowance for my new job income). HMRC calculated it to be approx £3100 via a paye notice. I have submitted a return under ITSA for this year. The actual tax bill is approx £2400
19-20 HMRC is collecting the underpayment in this year

I understood where the underpayment is less than £3000 it should be collected in the next full tax year 20-21, really to spread it over the full year. HOWEVER, when I spoke to HMRC on the phone, the gentlemen checked with their paye specialist who said that it’s 19-20 because their original assessment was for more than £3000.

Which year is it, please ? I had a read of this link but I got confused :

https://www.gov.uk/hmrc-internal-manuals/paye-manual/paye12070

Personally it feels fair enough if it’s 19-20 but I wouldn’t complain if it was 20-21 !

Practically if it’s 20-21, how do I convince HMRC to get it changed ?

Thanks for any comment that can be made.

robbob
Posts: 2824
Joined: Wed Aug 06, 2008 4:01 pm

Re: HMRC confusion on £3000 underpayment

Postby robbob » Sat Sep 21, 2019 11:48 am

I am struggling to help

How and when was the original assessment raised by hmrc? - if its an in tax year adjustment for 18/19 tax year officially coding out a specific amount of 18/19 tax to 19/20 i am guess you are stuck with that under normal circumstances -however it may be more complicated if you don't owe the money that hmrc originally estimated !

Note this adjustment type is independent of your self assessment bill and would therefore have put your tax return into credit when you submitted it as this amount is simply deducted as the last line entry from 18/19 calc and added as last line entry to 19/20 calc.


The other options are that hmrc issued a p800 or simple assessment after the end of the tax year before you actually submitted your tax return - this should not have happened (presuming you are within sa) and if you want to go down the traditional route of paying the £2400 calculated in 20/21 getting the p800/simple assessment cancelled is probably the best route to try a slong as hmrc agree that defaulting to tax being coded from tax return total wil work.

It gets very messy though once the computers have moved amounts of tax due around from one year to the next so nothing is really clear here.

I am also confused by how the amounts are different too - if hmrc issued you with a p800/simple assessment after the end of the tax year - presumably you had some tax return entries (expense claims?) that reduced the actual bill.

Damn unpaid tax and coding adjustments its always way too taxing - give me sa liability paid as balancing payment/payments on account with payments on account the following year any day of the week over this nonsensical confusing scenario:)

Dave12335
Posts: 23
Joined: Sat Feb 09, 2019 10:09 am

Re: HMRC confusion on £3000 underpayment

Postby Dave12335 » Sat Sep 21, 2019 12:56 pm

Hi again robbob, thank you for the reply.

The original assessment for 18-19 was raised by p800 dated 8 September.

I submitted my tax return for 18-19 on 9 September ie one day later.

Yes as you suspected, the amounts are different due to expense claims (mileage and professional fees).

I agree it put my tax return in credit.
. if you want to go down the traditional route of paying the £2400 calculated in 20/21 getting the p800/simple assessment cancelled is probably the best route to try a slong as hmrc agree that defaulting to tax being coded from tax return total wil work.
Yes this sounds like a good idea. I’ll give it a try. Should I just call hmrc and ask them to cancel it ? It’s a bit tricky with the computers !

Thank you !

robbob
Posts: 2824
Joined: Wed Aug 06, 2008 4:01 pm

Re: HMRC confusion on £3000 underpayment

Postby robbob » Mon Sep 23, 2019 9:33 am

Yes this sounds like a good idea. I’ll give it a try. Should I just call hmrc and ask them to cancel it ? It’s a bit tricky with the computers !
Yes phonecall is probably the best way to see if you can get this sorted.


Return to “Income Tax”