Tax code shenanigans

[BJPPJB]

Can anyone give me an insight into how HMRC operate with regards to tax codes and recovering owed tax?

19-20 HMRC owes me a rebate that comes via an increased personal allowance for the tax year 20-21.

20-21 I submit a self assessment (September time) whereby I owe HMRC a few hundred pounds. I get two notices straightaway, one for 21-22 to say my personal allowance is reducing, and then another for 22-23 to say the same.

I understand the one for 22-23 is to recover the tax owed for 20-21 and my belief for changing this years (21-22) is a preemptive move from HMRC to capture anything owed for this year (based on last years figures). Does this sound correct?

Regardless, I’ve just calculated I will be due another rebate for this year. Again my assumption is when I submit this years tax return I will get the rebate via 23-24’s tax code (unless I tick the box for them sending me a cheque)

I need to give them a call but wanted my ducks in a row before I did.

Thanks

[Eric Mc]

Tick the box stating you don't want your code adjusted and you want the refund paid directly to you.

[Longy00000]

You sound correct and that they do make these pre-emptive assumptions going forward. Unless you tell them otherwise they tend assume things from the previous year are going to be repeated so leave the tax code as is.
I have had to fight them every year for adjustments it's a royal pain.
I just submit a self assessment now ( which you can do whether requested to or not).

I owed a few hundred pounds from about 4 years ago and only once they had applied a fine would they accept it was their cock up. I have offered to pay the outstanding balance on 3 occasions but their system can't credit it so they have now insisted it must be collected via paye tax coding which will be rhe coming tax year of 22/23 .
Why they cant take the cash from me I have no idea as I am bound to get another fine fir it being over due !!! Then I have to spend hours on the phone again and the merry go round continues

[BJPPJB]

Thanks both.

Longy00000 - This is the kind of thing I want to avoid hence my reluctance to engage with them other than via my self assessment,

Eric Mc said:

Tick the box stating you don't want your code adjusted and you want the refund paid directly to you.

Yes, lesson learnt there. My accountant used to do it when I was contracting and it always worked. Trying to save some pennies by doing my own SA has landed me here!

[onetwothreefour]

HMRC tax coding notices get filed in the 'box of stuff I should probably keep but will never look at' because they invariably are wrong and I do SA anyway.

For future reference, it used to be that if you did SA and filled out the bank details for a refund of an overpayment, then it would just happen. Now you have to explicitly request this in a separate step. For bonus marks, in my case, this didn't do anything because there was a 'do not pay refund' box checked somewhere in my HMRC records, so I had to phone them up and explicitly request them to pay.

So, stick a note in your calendar based on their expected dates, and if you haven't had the money by then, chase it.

[BJPPJB]

onetwothreefour said:

HMRC tax coding notices get filed in the 'box of stuff I should probably keep but will never look at' because they invariably are wrong and I do SA anyway.

Bit of a late update on this, this is why I should pay an accountant and to never throw tax coding letters away...

Submitted 22-23's tax return last week. Today I got a letter from HMRC saying it was wrong, and I owe more

Long story short, when I completed 21 to 22s tax return, I never noticed the box (7) on the SA110 form for "Underpaid Tax and other debts" It appears in here I should have inputted what was on my tax coding notice, note 8 on the back (owed from 20-21). Therefore when I submitted it with no value, my tax bill was less than it should have been (I even got a rebate last year) In effect I think, because I'd effectively stated I paid too much tax, when of course it should have been offset by the monies owed for 20-21

Seems they've picked up on it this year, as again I completely misunderstood/never read the tax coding letter properly, yet the value was on my coding notice again.

So in short, they are correct. I've resubmitted a correct tax return now which and also ticked the box to say don't change next years code and don't change this years (I've already had another tax coding letter) I imagine this is going to cause chaos (all my own doing of course) So moral of the story, pay someone who knows what they're doing (For me anyway)

[996Type]

Also the HMRC option to tick the box to not take tax adjustments via a tax code amendment, despite being present, doesn’t seem to work.

I make a diary reminder after the return has been issued to call them, usually wait an hour on hold, and ask them to revert my PAYE code back to standard as I can never be sure what the following year will look like so don’t like them preemptively trying to calculate on my behalf…..

It’s been this way for years, regular as clockwork, after the tax refund is issued I also get a tax reduction in the following months salary as night follows day.

After a couple of years of asking my accountant to ensure the box was ticked back in the day, HMRC confirmed the system reverts back to auto tax code adjustment anyway as a fail safe and must be manually over ridden if you want to maintain the standard code via a phone call into them….

Edited by 996Type on Tuesday 17th October 22:55