I Received A Letter From The Taxman....

[Jeza]

Saying last year I underpaid by £128. Yet there was no indication of how this happened and no instructions on paying it back.

I receive a state pension as I'm 62. I also receive 2 private pensions. Tax is also stopped from my savings account every April.
I feel a bit miffed about this. Large companies are avoiding/evading tax but I get a letter about £128. I'm not moaning about having to pay it but is it any wonder that large companies and the wealthy get away with it.

[Psybbo]

Ring them Jeza and query it, it sounds like a mistake

[jno]

they may just build it into your tax code for next year.

But yes, if you owed them £128 million they'd happily strike a deal so you didn't have to pay it all.

[plowter]

HMRC normally send you a P800 showing why they think you've underpaid tax.
If you think that's wrong then appeal the calculation.

[ubasses]

Add up all three pensions and any interest you have earned during the tax year. Then take away your tax allowance of £8105 2012/2013. What you have left is what you pay tax on so multply by 20%. At least you will know if that amount is correct, you can then query the amount or find out what happened for it not to have been paid

[boxtops]

It's very unusual that a statement doesn't accompany it explaining how the underpayment arose - give them a phone call.

[Jeza]

Going on your reply jno, shall I offer them £50. LOL

[Jeza]

Thanks ubass I will check my pensions.

[hc4361]

If your pensions don't reach your personal allowance limit you should not be paying income tax on your savings (assuming that doesn't push you over the limit).

You should complete Form R85 for every savings account you have and send it to the banks/building societies. This will ensure you receive your interest tax free.

[AlwaysConfused]

Just got back from three weeks holiday, and OH has received a letter saying he has underpaid tax, yet at work we PAYE. Having literally just returned, we haven't had the opportunity to telephone the tax office, but I believe other people at work have had a problem too. Will be directing OH to the phone tomorrow and will post the response

[Jeza]

I think I've already done that HC. Maybe that's why they want more money.
I also have a current account at the bank with far too much in it for my monthly spends. I realise I don't get interest on it but it's a bugger knowing where to put it. Don't say ISA's, not till April.

[hc4361]

Jeza, interest rates are rubbish but Nationwide is paying 5% on £2500 in its FlexDirect current account for 12 months. Works out about £11 a month.

I've dumped a fair bit of my savings in to Premium Bonds over the last few months as the interest on savings is no great loss. Now they announce there will be fewer payouts. GRRRR

[factor-fiction]

Hi Jeza,

It's up to you to tell your bank /building society not to deduct tax if you are a non-tax payer.

But it is possible you are a taxpayer- as others have said if your total income from all sources, including state pension, exceeds the personal allowance (which was around £8105 last tax year and is now just over £9000 I think) then you will need to pay tax at 20% on any income over the tax free allowance. Unless the private pensions are large the tax due will be small.

If tax is already deducted from your private pensions (which I thought happened automatically now unless you stop it by declaring you are a non-tax payer) then it seems odd that you still owe tax.

They normally include a calculation. Sometimes they say this will follow. They also normally say whether you need to pay it off in one go or whether your tax code for next year will be adjusted.

Have you had a letter setting out your tax-code for 2013/14? If so that letter should include details of any underpaid tax.

The bit about large companies is irrelevant really. HMRC will expect tax bills to be paid whether they are £5 or £5 million, just as we'd expect a refund if they owed us £5. You can avoid tax too if you pay an adviser and /or put savings in ISAs or premium bonds, and it could be argued you avoided tax yourself by paying into a pension scheme.

If you ring them (or write to avoid the cost of an expensive call while you wait in a queue for an hour) they will help you I'm sure

[dzug2]

The calculation is normally followed a day or two later by a change in tax code to collect to collect the tax due

Alternatively they will keep a note of it and adjust next year's code to collect it

It has arisen because some aspect of your income is greater than assumed when setting your tax code (if any) for last year

[emmie]

likely to be a mistake, i received 6 different letters from the tax office, with six different tax codes, when i rang to query it, the bloke said ignore them all, as they are all wrong, millions of these tax code letters went out in error... nice to know..

[Kathyan]

When my husband left the army last year he started working for a driving agency. He received a letter from the tax office with his new tax code. I said to ring them because there was no explanation given as to why it had gone down. He rang them an they were taxing him on his pension, the wages from the agency AND his Army pay!. They sorted it out straight away. Then a couple of months ago he started working for one of the companies that he had worked for with the agency. He got a new tax code and it was wrong again. He rang them and that he was told that they were taxing him on his pension, his wages from the new company AND his wages from the driving agency! It's all sorted now but he would check on anything in the future. If you don't think it's correct, ring them. They do make mistakes as above!

[factor-fiction]

HMRC have made some big mistakes in recent years but to be fair to them on this one it is difficult for them to get tax codes right in cases where someone has several sources of income from maybe two part time jobs, a state pension and some private pensions, especially where people change part-time jobs during the year or get things like JSA for a period which are paid gross but count as taxable income. I know my tax affairs were much simpler when i just had one employer and was part of PAYE)

[jno]

that's the way, tell them you're the chief financial officer of Jezabank International and you're planning to move all your operations to Monaco because of the uncompetitive tax regime in the UK...

[factor-fiction]

This is Business & Finance though not Chatterbank, jno

[Jeza]

HC. I have tried to open an account with nationwide on the internet (no branch near me) I keep coming up against a brick wall. Register so I tried, what account do you have with us, none I wish to register for an account. Then back to first page so I gave up.

[jno]

well, I was replying to the OP's own earlier post, factor (and indeed to the original query)