This Business and Moment...

Just received a letter from HMRC that for tax year 2020-2021 I apparently owe £2600 or so... I changed roles in that time, so I guess there was some **** up with my PAYE tax code? This is quite a shock although I have until 19th June to pay but still - that was somewhat unwelcomed.
 
Freefaller said:
Just received a letter from HMRC that for tax year 2020-2021 I apparently owe £2600 or so... I changed roles in that time, so I guess there was some **** up with my PAYE tax code? This is quite a shock although I have until 19th June to pay but still - that was somewhat unwelcomed.
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Are you earning over £100k? or over £50k? It is easily done if they predict your income incorrectly.

You can claim hardship and pay back monthly tho. Everyone does, it is basically an interest free loan.
 
dLockers said:
Are you earning over £100k? or over £50k? It is easily done if they predict your income incorrectly.

You can claim hardship and pay back monthly tho. Everyone does, it is basically an interest free loan.
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I earn over 100k now but at the time I was just under 100k (this is for 2020-2021). It's weird that it has just landed now rather than at the time though - surely it would have been easier to have taken that out at source (changing my tax code).
 
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Freefaller said:
I earn over 100k now but at the time I was just under 100k (this is for 2020-2021). It's weird that it has just landed now rather than at the time though - surely it would have been easier to have taken that out at source (changing my tax code).
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Ah interesting. Does your P60 show any anomalies?

I mean unless you earn over £100k or have some other weird scenario, your tax code would have just been the standard (and irrelevant if you moved role). Perhaps you got paid out accrued holiday that pushed you over £100k? But even then to owe £2.6k you'd have to have been like £110k/salary or something lol.

Edit: if you haven't make sure you claim the WFH allowance for COVID as that'll cover £300/year for two years no questions asked. Could take the sting out a bit lol.
 
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dLockers said:
Ah interesting. Does your P60 show any anomalies?

I mean unless you earn over £100k or have some other weird scenario, your tax code would have just been the standard (and irrelevant if you moved role). Perhaps you got paid out accrued holiday that pushed you over £100k? But even then to owe £2.6k you'd have to have been like £110k/salary or something lol.
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Had it been this tax year I could have understood it but at the time I was according to HMRC under 100k. I did change roles in 2020 however, and my previous company had medical insurance which may have caused issues. This is what the HMRC website says:


HMRC used the following reasons to work out your tax calculation – those that caused you to pay too little are shown before any that would cause you to pay too much.

Too little tax paid​

We have reviewed your tax position and worked out that you have paid too little tax due to a number of reasons. This may be because you:
  • changed jobs or have more than one job
  • have more than one pension
  • are in receipt of a taxable state benefit such as the State Pension or Carer’s Allowance
  • work for a company that has just been taken over or merged with another

Medical insurance​

You paid tax on £1,879 of medical insurance benefit, but you should have only paid tax on the actual amount of £556.


So I guess changing jobs is the only thing that could have caused this? It's just annoying it's been 2+ years before I was notified of it. It's all PAYE, all other income goes via my wife to avoid these problems. So as far as HMRC is concerned I'm 100% PAYE.
 
A £2600 underpayment is huge so there is definitely something profound amiss. The Medical Insurance statement almost reads like "it could have been a £3k bill but we've reduced it by what you overpaid on medical" too, lol.

I assume you have a HMRC account? You can go back and see what was reported.

In the change of roles you may have picked up 13 months salary that pushed you over £100k inadvertently? (holiday pay out essentially)?
 
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OspreyO said:
I've a dilemma of my own this week. Very long time in current organization, ultra safe secure, dull maybe. Struggling to progress. I'm in the running for a very technical role that gets me past this. But it basically being put in line to eventually replace my line manager, who has vastly greater skillset and experience in this area than I.
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I wouldn't worry tbh. Experience on "the known and in front of you" is quite easy to pick up. He probably appears super knowledgeable but not through anything more profound than observing it for a long time. And once you "get the role", you make it your own anyway.
 
dLockers said:
A £2600 underpayment is huge so there is definitely something profound amiss. The Medical Insurance statement almost reads like "it could have been a £3k bill but we've reduced it by what you overpaid on medical" too, lol.

I assume you have a HMRC account? You can go back and see what was reported.

In the change of roles you may have picked up 13 months salary that pushed you over £100k inadvertently? (holiday pay out essentially)?
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That's exactly what I don't understand... I do have an HMRC account and checked it and just can't work out why this has happened. I'm going to have to call them "joy oh joy".

It just looks like either a tax code was incorrect, or reported incorrectly so that they didn't take the tax they needed from my salary, but it's not hugely obvious.

Looking at my income at the time that they calculated it's comfortably under the buffer. 2021-22/23 is where it gets more complicated as my salary increases and I do some more salary sacrifices.
 
35 mins on hold so far.... Yay

Finally got through... It turns out that it was the medical insurance that caused issues when I change roles because the tax code wasn't reflected properly.

Oh well, they did say that I don't need to pay it all off at once by the 19th of June that as long as I'm paying it off slowly they won't find me or apply any the interest to it. Because it was linked to myself assessment that I had to do at the time. I can't claim it back in my tax code so I just have to pay it off as and when I can.

I hate dealing with this stuff! :cry:
 
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Freefaller said:
35 mins on hold so far.... Yay

Finally got through... It turns out that it was the medical insurance that caused issues when I change roles because the tax code wasn't reflected properly.

Oh well, they did say that I don't need to pay it all off at once by the 19th of June that as long as I'm paying it off slowly they won't find me or apply any the interest to it. Because it was linked to myself assessment that I had to do at the time. I can't claim it back in my tax code so I just have to pay it off as and when I can.

I hate dealing with this stuff! :cry:
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Its reasons like these, Im glad I have an accountant (my sister-in-law :D )
 
I am dreading getting my self assessment done this summer, I changed job in October, my previous companies bonus was paid out in September, I have been on a bonus "draw" for the first quarter at the new place - I honestly have no idea what it's going to come out like! I do have my new tax code for this coming year and it appears accurate... I owe them money from the off, never mind having any personal allowance :( First World problems and all but seeing tax paid makes me feel a little bit ill... time to get serious with pension contributions I think
 
And in a plot twist with my career dilemma, got made redundant on Tuesday :cry:

Company decided to pull out of Europe market for the time being, so we’re all gone bar a couple of people keeping the lights on in some accounts they have here.

Annoying? Yes a little, given I turned a job down 4 weeks ago partly due to what the business had told us at our SKO, and how they are fixing things, give them some time etc.

But all lies it seems for us over here.

Still, good to be out of the place that was toxic outside of the UK team, onwards and upwards.
 
blairw said:
I am dreading getting my self assessment done this summer, I changed job in October, my previous companies bonus was paid out in September, I have been on a bonus "draw" for the first quarter at the new place - I honestly have no idea what it's going to come out like! I do have my new tax code for this coming year and it appears accurate... I owe them money from the off, never mind having any personal allowance :( First World problems and all but seeing tax paid makes me feel a little bit ill... time to get serious with pension contributions I think
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This is what I've done over the last 2 years. Increased my pension contributions then do a SA to claim back the tax relief, and to help keep me under the 60% trap. It's such a ballache to deal with.

Yes I know first world problems and yes I know I earn in line with the top 97-98 percentile, but they don't make it easy, it's almost as though you're penalised for being successful (or lucky)... But also bear in mind I pay for everything basically, including holidays, cars, kid's stuff, mortgage, bills etc.... I'm not seeking sympathy at all, but it's an additional stress.
 
Cadder said:
@Ev0 that's awful. Are you going to try the company you turned down?
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Already asked and it’s too late now, which is fair enough. Hindsight and all that!

Have already had a flurry of calls and interest, without sounding all Liam Neeson, my skills seem to be in demand enough that there are places still hiring at the moment in the tech sector.

One interview process started, another 4 or 5 want to interview, so not too worried yet!
 
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Freefaller said:
This is what I've done over the last 2 years. Increased my pension contributions then do a SA to claim back the tax relief, and to help keep me under the 60% trap. It's such a ballache to deal with.

Yes I know first world problems and yes I know I earn in line with the top 97-98 percentile, but they don't make it easy, it's almost as though you're penalised for being successful (or lucky)... But also bear in mind I pay for everything basically, including holidays, cars, kid's stuff, mortgage, bills etc.... I'm not seeking sympathy at all, but it's an additional stress.
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Agree with everything here - particularly when you account for the fact that everything we do with our money in terms of spending post income tax is also subject to tax.

I would have absolutely no desire to live like they do but it is a bit jarring to see my tax contribution over the year and contrast it with a relative that has 5 children and hasn't worked since the 1st was born (eldest is now 17!) Housing etc all at tax payers expense
 
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