HMRC Tax Refund...errr
Discussion
So two letters arrive for me today from HMRC. Open them up and its a sizeable refund!
Only thing is I can't for the life of me work out how they've come to the figure. They send the calculation form over but its vague to the point of being a waste of paper. I mean I am not one to argue with them giving me money back but I don't want next year to roll around and have another letter saying you owe us a grand please!
As far as the calc goes, it says my PAYE income for 14-15 was about a months pay short of my yearly salary. This makes sense since I didn't start work until may, so I worked 11 months. They've then put next to that what I paid in tax. Then it goes on to show income, less personal allowance and then tax at basic rate on whats left. This is £2 more than the tax I have paid. It then just says "less other adjustments' of over £1k and when it all comes out in the wash, I've paid over £1k more tax than they said I should. So heres a refund.
Thing is.... I have no idea where this adjustment comes from. There is no explanation for it. Confused.
Only thing is I can't for the life of me work out how they've come to the figure. They send the calculation form over but its vague to the point of being a waste of paper. I mean I am not one to argue with them giving me money back but I don't want next year to roll around and have another letter saying you owe us a grand please!
As far as the calc goes, it says my PAYE income for 14-15 was about a months pay short of my yearly salary. This makes sense since I didn't start work until may, so I worked 11 months. They've then put next to that what I paid in tax. Then it goes on to show income, less personal allowance and then tax at basic rate on whats left. This is £2 more than the tax I have paid. It then just says "less other adjustments' of over £1k and when it all comes out in the wash, I've paid over £1k more tax than they said I should. So heres a refund.
Thing is.... I have no idea where this adjustment comes from. There is no explanation for it. Confused.
Few years ago my wife received a 4 figure refund from HMRC which just about equalled her gross pay for the year.
She rang them, they hummed and haahed and said it must be genuine at first but then realised they'd made a huge cock up. Said a sum that large shouldn't have got through their system without checking but it had. Could she send it back please!
Move forward a few years and they chased me for a supposed overpayment of tax credit that I disputed. I ended up paying them £1500 which I dispute to this day. They paid me on the figures they calculated but then said they'd got it wrong.
Should have called myself Starbucks or Amazon, would get me life tax free then!
She rang them, they hummed and haahed and said it must be genuine at first but then realised they'd made a huge cock up. Said a sum that large shouldn't have got through their system without checking but it had. Could she send it back please!
Move forward a few years and they chased me for a supposed overpayment of tax credit that I disputed. I ended up paying them £1500 which I dispute to this day. They paid me on the figures they calculated but then said they'd got it wrong.
Should have called myself Starbucks or Amazon, would get me life tax free then!
Each tax year a person receives an Annual Tax Free Allowance. For tax year 2014/15, this was £10,000. It can be less or more if the person has additional personal tax allowances available to them or HMRC wants to charge the person additional tax on some other form of income, such as a Benefit in Kind or a State Pension.
Therefore, you normally pay PAYE on any salary exceeding £10,000. Under PAYE, the assumption is that a person is going to work continuously for the 12 months from 6 April to the following 5 April i.e. the complete tax year.
They therefore divide up the £10,000 into 12 equal chunks and offset 1/12 of the £10,000 x1/12 against each month's Gross Salary.
This is fine if you work for the whole 12 months.
If you have only worked 11 of those 12 months, it means that you will not have made use of the full £10,000 available to you i.e. you would have received £9,166 allowances instead of £10,000. You have £833 worth of allowances not used.
If you are a 20% tax payer, this means HMRC owe you a refund of £167. If you are a 40% tax payer, they owe you £333.
Therefore, you normally pay PAYE on any salary exceeding £10,000. Under PAYE, the assumption is that a person is going to work continuously for the 12 months from 6 April to the following 5 April i.e. the complete tax year.
They therefore divide up the £10,000 into 12 equal chunks and offset 1/12 of the £10,000 x1/12 against each month's Gross Salary.
This is fine if you work for the whole 12 months.
If you have only worked 11 of those 12 months, it means that you will not have made use of the full £10,000 available to you i.e. you would have received £9,166 allowances instead of £10,000. You have £833 worth of allowances not used.
If you are a 20% tax payer, this means HMRC owe you a refund of £167. If you are a 40% tax payer, they owe you £333.
Bit clearer but still don't see where its come from. Yeah it was a new job having come from a PhD in academia where you are tax exempt. Started in May so missed the first month of the tax year. I don't think I was on emergency codes, though given the numpties that used to work here, its entirely possible!
Then there was the odd bit between February and May where the company went bust, but we were kept on by the administrators and eventually TUPE'd across to new owners in the middle of April.
Then there was the odd bit between February and May where the company went bust, but we were kept on by the administrators and eventually TUPE'd across to new owners in the middle of April.
Surely will be dependent on whether a M1 or cumulative tax code was used at the start of employment or whether this was amended at any time in the tax year.
If this was the first and only job, the tax code should be cumulative which would mean a WHOLE year of personal allowance would have been given and used.
If you want to e-mail me the tax calculation that you have received I will gladly check it for you - you need to remember that accepting a tax rebate when it is knowingly incorrect is a criminal offence (theft Act) so you do need to get to the bottom of this.
David
PS PM me and i will give you my e-mail address.
If this was the first and only job, the tax code should be cumulative which would mean a WHOLE year of personal allowance would have been given and used.
If you want to e-mail me the tax calculation that you have received I will gladly check it for you - you need to remember that accepting a tax rebate when it is knowingly incorrect is a criminal offence (theft Act) so you do need to get to the bottom of this.
David
PS PM me and i will give you my e-mail address.
sumo69 said:
Surely will be dependent on whether a M1 or cumulative tax code was used at the start of employment or whether this was amended at any time in the tax year.
If this was the first and only job, the tax code should be cumulative which would mean a WHOLE year of personal allowance would have been given and used.
If you want to e-mail me the tax calculation that you have received I will gladly check it for you - you need to remember that accepting a tax rebate when it is knowingly incorrect is a criminal offence (theft Act) so you do need to get to the bottom of this.
David
PS PM me and i will give you my e-mail address.
PM'd youIf this was the first and only job, the tax code should be cumulative which would mean a WHOLE year of personal allowance would have been given and used.
If you want to e-mail me the tax calculation that you have received I will gladly check it for you - you need to remember that accepting a tax rebate when it is knowingly incorrect is a criminal offence (theft Act) so you do need to get to the bottom of this.
David
PS PM me and i will give you my e-mail address.
The sheet just says "adjustment", thats it. The other letter that came with said that it includes over payment for an earlier year but neglects to state which.
I know in the past I have over-paid tax because of how things worked out when I worked abroad for 3 months. But I never did anything about it, then went off to uni to do a PhD for 4 years where you disappear from the world of paying tax. I wouldn't think they'd refund you money after such a long time though.
sumo69 (David) has kindly had a look over the letter they sent to me.
He has confirmed that I have paid the correct amount of tax for the tax year (in fact I was £2 short). Going by what the letter says, the adjustments must be over payment from previous years, presumably augmented by interest (as they say on one of the letters which explains your tax return). Given my chopping and changing of address and dipping in and out of PAYE system over the last 4-5 years perhaps things are now sorting themselves out. If I get chance today I shall be on the blower to HMRC to confirm.
He has confirmed that I have paid the correct amount of tax for the tax year (in fact I was £2 short). Going by what the letter says, the adjustments must be over payment from previous years, presumably augmented by interest (as they say on one of the letters which explains your tax return). Given my chopping and changing of address and dipping in and out of PAYE system over the last 4-5 years perhaps things are now sorting themselves out. If I get chance today I shall be on the blower to HMRC to confirm.
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