Help understanding Income Tax deductions

[cj2013]

Hi all,

I'm having a bit of a nightmare trying to figure out what the HMRC are doing, but I feel like I'm having my pants pulled down somewhat.

For info: sole earner in a household with 2 young kids. Previous job in 2022/23 I was on £62k for about 80% of the tax year. Didn't realise that the HICB charge was a thing until December, so from January onwards I chopped off £1k per month into pension to reduce my taxable income.
Probably too little too late, but with some banked holiday pay in lieu, the year ended up like so:



Changed job at the end of the summer and took a hit of around £12k on salary, but my tax code went down to 747, with this reasoning:

hmrc said:

We estimate that you have not paid enough Income Tax so far this tax year. You currently owe £558.21
We will start to collect this amount straight away.
To do this we have reduced your tax-free amount by £4,010. This means that you will pay more tax until 5 April 2024, so that we can collect the £558.21 owed.

Your tax code has been adjusted for this

Nonetheless, my pre-tax income this year (after pension deductions) is unlikely to break into the higher 40% at all - maybe a smidge, again due to holiday, as I salary sacrificed to ~50k pa in the previous job, and clear less than 50k once pension is deducted in the current one.

I had to do a SA a few months ago, and they told me I owed £2,188.44 (which I assumed was the full child benefit plus some small tax underpayments of some description):


The amount is apparently "included in tax year ending 2025", which I assume is the coming tax year


The tax estimate for next year suggests I'll pay £1000 less tax, which of course is probably due to having a lower post-pension salary



So - the bit I'm now totally lost on, thanks to an email I received this evening; apparently I'll only get £50 of 'tax-free allowance' for the next tax year. I have calculated that is approximately £400 per month in additional income tax alone, which would be nearly £5k over that tax year.
Equally, my 'M' married allowance has disappeared from a lot of this calculation thanks to - I assume - losing it from the 22/23 stuff. I am totally lost about where that could come in to it all.

Can anyone explain what the £12,000 "underpayment from previous year" means? I'm by no means stupid, but it seems like they do an awful lot to make the whole thing as obfuscated or "terminologically inaccessible" as possible.

Edited by cj2013 on Thursday 8th February 21:56