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Where Taxpayers and Advisers Meet

Tax underpayment

Andyg
Posts: 1
Joined: Mon Aug 20, 2018 11:12 am

Tax underpayment

Postby Andyg » Mon Aug 20, 2018 12:20 pm

<t>Hi there<br/>
<br/>
I have received a request from HMRC to pay some tax for the 17/18 tax year as apparently I've underpaid. I don't quite understand how as I have one job and simply accept the tax code that I'm given. They say I've underpaid by £3000 and want it by January - needless to say I am beside myself! <br/>
<br/>
My employer says theu simply follow HMRC instructions and so have nothing to do with it. Is this my fault? Do i have any recourse? Help!</t>

SteLacca
Posts: 446
Joined: Fri Aug 07, 2015 2:17 pm

Re: Tax underpayment

Postby SteLacca » Tue Aug 21, 2018 9:29 am

Have you received a tax calculation (P800) from HMRC. If so, have you checked the figures to ensure that they are accurate?

JRG
Posts: 414
Joined: Wed Feb 03, 2010 4:40 pm

Re: Tax underpayment

Postby JRG » Wed Aug 22, 2018 12:11 am

£3,000 underpaid tax is quite a lot. It's equivalent to an amount of £15,000 at 20% or £7,500 at 40%. If your job is your only income then your tax code should have been 1150L for 2017/18.
Do you have any other income? For example, dividends or bank interest that exceed their specific allowances.

robbob
Posts: 2827
Joined: Wed Aug 06, 2008 4:01 pm

Re: Tax underpayment

Postby robbob » Wed Aug 22, 2018 10:42 am

Basically its up to you to ensure you tax code is correct , most bods incorrectly presume that as it been issue by hmrc and come via the employer then that will be job done. Nope you should always check the issue code and monitor that code and if you have any questions ask away (via hmrc).

The fact that 95% of the time there is no issues doesn't mean that for any one person there won't be an issue.

Note its particularly more important you check tax codes if you are higher rate taxpayer / receive employment benefits (company car) or get tax relief via tax code for anything or change jobs or have a second job in that tax year. There is much more likelyhood for these bods that the paye code may not collect all the tax due at the time.

Note even when a code is issued based on best known info you can still end up owing tax at the end of the year, eg large bonus payment at end of tax year taking you into higher rate (if you are claiming marriage allowance) or over the 100k income limit where you would lose personal allowances.

JRG
Posts: 414
Joined: Wed Feb 03, 2010 4:40 pm

Re: Tax underpayment

Postby JRG » Mon Aug 27, 2018 11:39 am

You are so right robbob. I always estimate what my tax code will be and then compare it with what HMRC shows on their website. For this year HMRC had overestimated my work pension income, so I corrected the amount and then HMRC's tax code agreed with my estimate. When I received my first work pension payment advice it showed a completely different tax code, so I had to contact HMRC and have them send the corrected tax code to my pension provider. You have to stay on top of your tax code to prevent overpaying, or underpaying, your tax.


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