Why have I underpaid tax?

[miniman]

Haven’t had to do a tax return for years, but been asked to do one for 18-19

My only income has been taxed under PAYE, however it appears having done the return that I owe more (and more than they will collect out of current tax code).

How has that happened then?

[Butter Face]

Do you get child benefit and earn over 50k?

[miniman]

Butter Face said:

Do you get child benefit and earn over 50k?

No and yes.

[LosingGrip]

Due to their incompetency! Phoned up to get my emergency tax sorted to be told that I now owe them £498 due to their fk up...paid before April! They said it could be paid over 12 months over the phone...

[Butter Face]

miniman said:

Butter Face said:

Do you get child benefit and earn over 50k?

No and yes.

Income from other sources? Have you declared any return from savings etc?

And just to clarify, does anyone claim child benefit for any of your kids?

[miniman]

Butter Face said:

Income from other sources? Have you declared any return from savings etc?

And just to clarify, does anyone claim child benefit for any of your kids?

No other income from any other source, no return from savings. No child benefit claimed by anyone.

[Butter Face]

miniman said:

Butter Face said:

Income from other sources? Have you declared any return from savings etc?

And just to clarify, does anyone claim child benefit for any of your kids?

No other income from any other source, no return from savings. No child benefit claimed by anyone.

Hmmm. Very odd. How much are they thinking you have underpaid by?

[miniman]

£4k

The only thing I can think of is that for 9 months of the tax year, I was paid a “grossed up” relocation allowance - I wonder if they (employer) has cocked up the calculations on that.

[FredAstaire]

if you got paid over a hundred grand then you lose your personal allowance on a sliding scale above that threshold, and its recouped via tax return not via PAYE

[miniman]

FredAstaire said:

if you got paid over a hundred grand then you lose your personal allowance on a sliding scale above that threshold, and its recouped via tax return not via PAYE

Ah.

[Butter Face]

Worst 'I earn more than £100k' thread ever

[miniman]

Butter Face said:

Worst 'I earn more than £100k' thread ever

Annoyingly, it's only the relocation allowance, which was meant to be tax neutral, that has pushed me into this.

[rigga]

Had a nice bill off HMRC, get paid 4 weekly, so 13 payment's a year, but apparently every so often there is 14 payments due to the way the dates of payments fall. Company knew about it, but instead of delaying the last payment of the tax year by one day, which would have negated the issue, there are lots in my company having bills falling through the door. Got to be cleared by end of Jan 20.
Company have washed their hands in the matter, HMRC just says pay it.

[blueg33]

FredAstaire said:

if you got paid over a hundred grand then you lose your personal allowance on a sliding scale above that threshold, and its recouped via tax return not via PAYE

This. Stupid an annoying way of doing it

[Beetnik]

rigga said:

Had a nice bill off HMRC, get paid 4 weekly, so 13 payment's a year, but apparently every so often there is 14 payments due to the way the dates of payments fall. Company knew about it, but instead of delaying the last payment of the tax year by one day, which would have pushed the problem into the next year, there are lots in my company having bills falling through the door. Got to be cleared by end of Jan 20.
Company have washed their hands in the matter, HMRC just says pay it.

FTFY

[Mattt]

miniman said:

Butter Face said:

Worst 'I earn more than £100k' thread ever

Annoyingly, it's only the relocation allowance, which was meant to be tax neutral, that has pushed me into this.

In which case it’s worth verifying that their grossing up has taken this into account, particularly if the income is all from one employer and not multiple sources.

They might have taken a simple 40% tax grossing up.

[NickCQ]

Beetnik said:

FTFY

I think you missed the point.

If you earn (making up the numbers) £100k in Y1 and £100k in Y2, net income is £133k.
If you earn £110k in Y1 and £90k in Y2, net income is £131k.

You've lost £2k of income (35% of one month's net income) due to a timing difference.

In the example you replied to, presumably you have one year of 14 payments and another of 12 (52/13 = 4.00..)

[2 GKC]

blueg33 said:

This. Stupid an annoying way of doing it

Maybe in the first year you earn it but thereafter your tax code will take care of it

[OMITN]

All I do is estimate at the start of the year how much my earnings (incl bonus) are likely to be. Then check it against the tax code allocated.

If you think you’ll be left owing, just call them up and get them to adjust the code.

I should land this year bang on (or poss slightly under h the estimate, in which case they will reimburse me...eventually).

You can also estimate it and then reset it once paid a bonus/received other income to try to get as close as possible.