Tax return 2014-15

[swampdonkeygj]

Hi,

I did my tax return tonight online, and was greeted with a message at the end saying I need to pay £1353.60.


I'm PAYE and started doing self assessment last year because I went over £50k and received child benefit. For 2014-15 I stopped the child benefit with HMRC on 02/02/15, as I knew I'd be going over £50k again.

In 2014-15 I was paid £54,697.93 in total, which consisted of basic salary, shift allowance, annual bonus and overtime. I paid £12,898.20 tax, and £4325.91 NI.

I have used some of the online calculators, and believe I should have paid £13,528 in tax, but only £3810 in NI. So altogether I think I owe them £115 here.

For the child benefit, I have 2 kids so the allowance was £1752 for the year. I only received £1497.85 as I cancelled the payments early. I think I should only have been eligible to receive £929.09 for the year, as you lose 1% of the benefit for every £100 you go over £50k. So I think I owe £568.76 here.

These 2 together represent a total of £683.76.

I guess I am wondering if I have calculated this correctly? I think I need to try and speak to HMRC about this over the coming days, but tried that last year for about 2 weeks, and never once managed to get to speak to anyone, just the hold music for 45 minutes plus, every time.

Thanks if you have read this far!

[Eric Mc]

For employees, NI is not part of the Self Assessment tax calculation. Ignore any NI you have had decucted as part of your net salary if you are trying to reconcile TAX amounts.

(It's different for the Self Employed, who pay Class 4 NI s part of their Self Assssment liability).

[Eric Mc]

Was the PAYE deducted correctly on your salary?

[swampdonkeygj]

I had a tax code of 651L, and I this is shown on all of my pay slips, so I'd hope the tax was deducted correctly. Although the online calculator I used shows I slightly underpaid.

I worked for a huge organisation - approx 90k employees in the UK so I'd have hope they had this sort of thing nailed.

[GT03ROB]

swampdonkeygj said:

I worked for a huge organisation - approx 90k employees in the UK so I'd have hope they had this sort of thing nailed.

If the code was wrong in the first place, they wouldn't be any the wiser. I've also found the bigger they are the crazier things happen to cause you all sorts of tax issues particularly when you float around tax threasholds as I found out one year to my cost!

[Eric Mc]

swampdonkeygj said:

I had a tax code of 651L, and I this is shown on all of my pay slips, so I'd hope the tax was deducted correctly. Although the online calculator I used shows I slightly underpaid.

I worked for a huge organisation - approx 90k employees in the UK so I'd have hope they had this sort of thing nailed.

Every PAYE taxpayer should know how the PAYE Coding system works.

The first question I will ask is, why was your 2014/15 coding 651L? The "normal" coding for 2014/15 was 1000L.

These codes are essentially your personal tax allowances i.e. they show the amount of salary you can have before tax is calculated.

1000L means £10,000
651L means £6,510

This indicates that HMRC has taken away £3,490 of your tax allowances.
Alternatively, they may have allocated the £3,490 to another source of income you have.

For most people who are young (i.e. not pensioners), tax allowances are reduced in the PAYE system because the employee is receiving Benefits in Kind from their employer. Did you receive BIKs to the value of £3,490 in tax year 2014/15?
If you did, are you entering them correctly on your 2014/15 tax return?

Another reason why a tax allowance/coding might be reduced is that HMRC are collecting underpaid tax from an earlier year by restricting a later year's allowances. Is this a likely scenario for you?
And if this is the case, are you taking THIS into account when completing your 2014/15 tax return?

Edited by Eric Mc on Tuesday 5th January 07:37

[swampdonkeygj]

Eric Mc said:

Every PAYE taxpayer should know how the PAYE Coding system works.

The first question I will ask is, why was your 2014/15 coding 651L? The "normal" coding for 2014/15 was 1000L.

These codes are essentially your personal tax allowances i.e. they show the amount of salary you can have before tax is calculated.

1000L means £10,000
651L means £6,510

This indicates that HMRC has taken away £3,490 of your tax allowances.
Alternatively, they may have allocated the £3,490 to another source of income you have.

For most people who are young (i.e. not pensioners), tax allowances are reduced in the PAYE system because the employee is receiving Benefits in Kind from their employer. Did you receive BIKs to the value of £3,490 in tax year 2014/15?
If you did, are you entering them correctly on your 2014/15 tax return?

Another reason why a tax allowance/coding might be reduced is that HMRC are collecting underpaid tax from an earlier year by restricting a later year's allowances. Is this a likely scenario for you?
And if this is the case, are you taking THIS into account when completing your 2014/15 tax return?

Edited by Eric Mc on Tuesday 5th January 07:37

Hi Eric Mc, thanks for replying.

My tax code was 651L because:

Personal allowance £10,000
Flat rate job expenses +£120
Medical Insurance - £512
Company van - £3090

meaning a tax free amount of £6518.

However on my P11d, the company had not included the medical insurance, which is an issue everyone on my grade had in that year - basically the company took it off us. And in addition I had a hire care for a month whilst my normal vehicle was off the road with turbo issues. This meant that on my P11d there is a total of £3357 of BIKs, which I did submit correctly on the tax return.

The tax code doesn't include any provision for HMRC recovering underpaid tax.

[Eric Mc]

Did you ACTUALLY receive a Medical Benefit from your employer in tax year 2014/15?

If you did, what was the ACTUAL amount of the benefit?

If you did receive this benefit in 2014/15 and your employer left it off the 2014/15 P11D in error, you are still required to put the correct value of the benefit in the self assessment tax return you are completing.

[swampdonkeygj]

Eric Mc said:

Did you ACTUALLY receive a Medical Benefit from your employer in tax year 2014/15?

If you did, what was the ACTUAL amount of the benefit?

If you did receive this benefit in 2014/15 and your employer left it off the 2014/15 P11D in error, you are still required to put the correct value of the benefit in the self assessment tax return you are completing.

I have an email from HR at the time saying I had been auto enrolled for the tax year, but I have spoken to the company today and they told me that unless the P11d shows I had the benefit, I was not enrolled that year in the scheme.

[Eric Mc]

swampdonkeygj said:

I have an email from HR at the time saying I had been auto enrolled for the tax year, but I have spoken to the company today and they told me that unless the P11d shows I had the benefit, I was not enrolled that year in the scheme.

Auto enrollment relates to pensions. Are they trying to confuse you?

I've just PM'd you

Edited by Eric Mc on Tuesday 5th January 13:32

[swampdonkeygj]

Eric Mc said:

Auto enrollment relates to pensions. Are they trying to confuse you?

I've just PM'd you

Edited by Eric Mc on Tuesday 5th January 13:32

No it's just a peculiarity of my terms and conditions when I was at the company. I TUPE'd to this company and had medical insurance as part of my terms and conditions with my previous employer. The new company had to honor this, although it isn't something they routinely offered to non-management types. There were a couple of other things as well such as purchasing holiday and dental care etc. However, each year we received a opt in form for these benefits. I sent my choices form in for the 2014-15 tax year stating that I wanted to be included in the health care scheme, at which point they emailed me back stating that I didn't need to send the form in, and that as I was a part of the scheme the previous year, I would be auto-enrolled for the 2014-15 tax year.

Does that make sense?