PAYE and SA

[XFool]

I completed my SA for the year 2017-18 by 31 January this year and received a tax rebate for +£1000 (because PAYE Coding was based on 2016-17 year's figures.)

I have since received my PAYE coding notice for 2019-20. This shows updated figures for personal allowance, company and state pensions, but the old figures - same as PAYE Coding 2018-19 - for everything else. Why are these figures not automatically adjusted in light of the figures submitted via SA? The two systems seem to be operated independently.

Also, I corrected my 2016-17 return before the same deadline this year. The differences would be small (added £1 interest and £6 Gift Aid) but see no indication of that having had any effect so far. How can I tell?

TIA

[XFool]

Well the only answer I can come up with is that: "It is the way that it is."

So I guess, like more and more things in life, we just have to do it ourselves annually, by manually tweaking our own Tax Code via our Digital Tax Accounts. One day(!) it will all be done via the DTA; at least that is what we were originally told.

'Simple doesn't live here anymore.'

[XFool]

So I guess, like more and more things in life, we just have to do it ourselves annually, by manually tweaking our own Tax Code via our Digital Tax Accounts.

Except that you can't!

That is despite being directed to the DTA by every source, including the HMRC tax code notice itself. After logging in to your DTA you see a box:

Pay As You Earn (PAYE)
Check or update the employment, pension or other income information used to work out your PAYE Income Tax and tax codes.

This leads to:

If the information you have seen is wrong or incomplete
You can tell us about changes that will apply from 6 April 2019 for any of the following:

company benefits Tell us about company benefits.
allowances or tax reliefs Tell us about allowances or tax reliefs
income from another source

I chose "income from another source". But this "other source" is nothing to do with investment income of any kind. So currently the only way of aligning my Tax Code with reality is to spend hours on the phone to HMRC or write them a letter.

A few years ago there was available online a secure HMRC form that taxpayers could complete to provide updated details of income to correct their PAYE Tax Code. This was later changed to 'For Tax Agent's use only'. Available HMRC forms relating to PAYE seem to be for employers, not individuals.

Things seem to be going backwards.

[XFool]

...so I just rang HMRC.

The automated system told me they were very busy and I might have to wait longer than usual. It then asked what the call was about:"Tax Code". I was then asked if I had been with my "present employer" for less than 5 weeks - I'm retired. It wouldn't accept "retired" so I replied "less than 5 weeks". I was ultimately advised to "hang up". So I did.

Anything to do with the Tax Code seems to currently assume you are employed. The only available online options assume you are employed and want to inform HMRC of changes to your "earned income or tax allowances" or "extra income" such as tips etc. So the only way out currently seems to be to write HMRC a letter.

What do other people do?

[PinkDalek]

What do other people do?

Write a letter, as you've suggested a couple of times.

[XFool]

What do other people do?

Write a letter, as you've suggested a couple of times.

Yeah. So much for "Making Tax Digital".

[XFool]

Just an update to this...

Before writing to HMRC about my new Tax Code I thought I'd have one more look at my Digital Tax Account. This time I looked at the section for the Current Tax Year, rather than one for the coming year, which is what I was really interested in.

It seems you CAN adjust your Tax Code via the DTA (Hurray!), but only comprehensively for the Current tax year, or for previous years - how does that work?

Also, my online version for the current tax year shows no entry for 'Interest Income', whereas I did have such taxable interest during the year and the new tax year's paper Tax Code does have an entry for 'Untaxed Interest'.

So you CAN tweak your PAYE Code via the DTA, but only when it is already in action (or for previous years), not before it is applied. But as the DTA version uses out of date figures and doesn't even seen to include figures that it should, it will be interesting to see what happens when I get to change them - after April 5th.

Something else to remember to do every year...

[pochisoldi]

Just an update to this...

Before writing to HMRC about my new Tax Code I thought I'd have one more look at my Digital Tax Account. This time I looked at the section for the Current Tax Year, rather than one for the coming year, which is what I was really interested in.

It seems you CAN adjust your Tax Code via the DTA (Hurray!), but only comprehensively for the Current tax year, or for previous years - how does that work?

Also, my online version for the current tax year shows no entry for 'Interest Income', whereas I did have such taxable interest during the year and the new tax year's paper Tax Code does have an entry for 'Untaxed Interest'.

So you CAN tweak your PAYE Code via the DTA, but only when it is already in action (or for previous years), not before it is applied. But as the DTA version uses out of date figures and doesn't even seen to include figures that it should, it will be interesting to see what happens when I get to change them - after April 5th.

Something else to remember to do every year...

Tweaking this year's code before your employer/pension provider makes their last PAYE run of the tax year will result in any overpaid tax being returned to you via the next payroll run.
Do this tweak before the end of December or January, and you'll probably have a greater chance of next year's tax code being correct, or closer to the correct figure.

Going off at a slight tangent, I never, ever allow HMRC to adjust my code for current year's untaxed income, or previous year's unpaid tax.
As far as I'm concerned my PAYE code is used to withhold tax on earned income. Any other tax gets paid in the January of the following year when I've done my SA return...

[XFool]

A belated thanks to pocihsoldi. I'll have to study the implications.

As it is now the new tax year I tried tweaking my Tax Code for 2019 - 20 via the Personal Tax Account (PTA).

Oh dear!

Before I started all the figures shown online were wrong and differed to the paper tax code notice. The paper tax code notice had the correct figure for State Pension (SP), but everything else was wrong. I started by changing the SP figure online, despite being 'me' (I was logged on after all), I still had to enter address and telephone number verification. I changed the figure - as it is a benefit they asked for the weekly amount. OK, I've got a letter for that. But the result is that the annual figure on the PTA is now 'wrong' and differs from the 'correct' HMRC paper tax code notice annual figure.

Still, they say it will possibly change when they get the figures from the DWP. But HMRC must have that already - that's why the paper tax code notice figure for SP is correct! Anyway, I proceeded to Interest and UK Dividend figures - but EVERY time I still have to enter full verification information. So that would be for: SP, Employer Pension, Interest, UK Dividends, Foreign Dividends... I don't think so!

OK, the first two should eventually be supplied externally but currently the tax code is based on incorrect figures for the others and, even after updating, the online figures didn't change. The only online figure that did immediately change was the SP figure, which is now still wrong, just in a different way. I gave up on most of the other figures. So, as I found in a previous year, the online PTA account seems to be pretty well disconnected from whatever HMRC use to actually set the tax code, with no obvious online direct access to this by the taxpayer.

On the feedback form I basically told them I thought it was crap as it didn't work. A few years ago HMRC had an online secure email page where you could easily send them estimated figures for the current, or upcoming, tax year and get a new tax code issued. It worked easily, but I only got to use it once, when I tried the following year it was only for use by Tax Agents. Probably gone now.

So, the people who told me to send a letter have been proved correct. It seems the current Digital Tax policy wrt HMRC Tax Coding is: Post a letter.

Though I notice they no longer include their address on the coding notice. They just give you a phone number and refer you to the online Personal Tax Account.

[PinkDalek]

So, the people who told me to send a letter have been proved correct. It seems the current Digital Tax policy wrt HMRC Tax Coding is: Post a letter.

It was your idea viewtopic.php?p=204636#p204636 but we can all guess how long it might take for such a letter to be read, let alone actioned.

It worked easily, but I only got to use it once, when I tried the following year it was only for use by Tax Agents. Probably gone now.

The agent form still exists https://www.tax.service.gov.uk/shortforms/form/P2.

This form can only be completed by an authorised agent. An agent must be formally authorised by an individual or a business to deal with HMRC on their behalf, using form 64-8 or the online authorisation service.

If you are an individual and you think your PAYE Coding Notice is wrong you must sign into your Personal Tax Account and go to 'Check your Income Tax' and then 'Tell us about a change'.

We aim to deal with your query within 15 working days.

I've idly wondered in the past if one can be one's own agent.

[XFool]

So, the people who told me to send a letter have been proved correct. It seems the current Digital Tax policy wrt HMRC Tax Coding is: Post a letter.

It was your idea viewtopic.php?p=204636#p204636 but we can all guess how long it might take for such a letter to be read, let alone actioned.

Any estimate? It should at least be cheaper than a phone call.

It worked easily, but I only got to use it once, when I tried the following year it was only for use by Tax Agents. Probably gone now.

The agent form still exists https://www.tax.service.gov.uk/shortforms/form/P2.

Yes, that's the one I used previously.

If you are an individual and you think your PAYE Coding Notice is wrong you must sign into your Personal Tax Account and go to 'Check your Income Tax' and then 'Tell us about a change'.

Wonderful.

[PinkDalek]

So, the people who told me to send a letter have been proved correct. It seems the current Digital Tax policy wrt HMRC Tax Coding is: Post a letter.

It was your idea viewtopic.php?p=204636#p204636 but we can all guess how long it might take for such a letter to be read, let alone actioned.

Any estimate? It should at least be cheaper than a phone call.

No idea but I have just found for the first time and had a play with this http://www.hmrc.gov.uk/tools/progress-t ... ssment.htm (only available for the items shown).

For instance, they suggest a hard copy paper Tax Return submitted on 6 April 2019 would be dealt with by 5 July 2019. Bearing in mind they didn't start dealing with 2017-18 paper returns until late in the Autumn, I wouldn't place much trust in that date. Unless things have changed, which they may have as they expect to deal with amendments to a return by letter within 2 months. Amendments made by phone within a month (for those who have a spare 45 minutes).

[XFool]

OK tried again...

You CAN add more that one change without re-entering verification. It was further down the page so, of course, I didn't see it on the silly screen formats used today which fit a 'form' even less well than the old 4:3 did. (In my experience it's a common problem with current web pages BTW)

But there was no option to select Foreign Dividend Income. Tough. That one is wrong by being too low...

I take it, while SP Income figure magically update immediately, the others may still need manual intervention for some reason. We shall see.
Why is at all such a trial?

[XFool]

It was your idea viewtopic.php?p=204636#p204636 but we can all guess how long it might take for such a letter to be read, let alone actioned.

Any estimate? It should at least be cheaper than a phone call.

No idea but I have just found for the first time and had a play with this http://www.hmrc.gov.uk/tools/progress-t ... ssment.htm (only available for the items shown).

Leading to this: https://www.gov.uk/government/organisat ... assessment

Webchat
Advisers can only talk to you about Self Assessment or PAYE Income Tax. They will not be able to transfer you to another webchat team.

All webchat advisers are busy at the moment.

Um...

For instance, they suggest a hard copy paper Tax Return submitted on 6 April 2019 would be dealt with by 5 July 2019. Bearing in mind they didn't start dealing with 2017-18 paper returns until late in the Autumn, I wouldn't place much trust in that date. Unless things have changed, which they may have as they expect to deal with amendments to a return by letter within 2 months. Amendments made by phone within a month (for those who have a spare 45 minutes).

This isn't about the SA itself, it's simply about getting the figures more or less correct for the annual tax coding. Last year HMRC 'borrowed' >£1000 off me and they didn't pay me any interest.

I may try that Web Chat in future, if it is available and if I remember.

[PinkDalek]

This isn't about the SA itself, ...

I know and thus my (only available for the items shown) and For instance. I was attempting to give you an idea as to how long they expect to take to reply to letters, in answer to your question.

[XFool]

Yipee! Received my new Tax Code from HMRC in the morning's post.

Though why this isn't all automatic, based on the figures from last year's SA, remains a mystery to me.

[melonfool]

I feel your pain, like Pochisoldi I *hate* my tax code reflecting last year's incime (etc, because it changes every year and they always get it wrong.

So, when I started a full time perm job last Oct I rang them to tell them (because the rti was out of synch as new employer joined me before old employer ended me, due to new employer having an early month payroll and old employer having a later month payroll, which resulted in HMRC thinking I had two jobs and me going over £100k and them removing my personal allowance!).

I recently noticed it was wrong for the new tax year so I checked and where I had somehow managed to underpay by about £200 last year (and repaid online) they have assumed I will underpay again and taken that off my tax code. There is no reason I will underpay this year as I am full time employed on PAYE (income from my Ltd co I now put directly into the pension but I've not taken income from that for a few years now).

But they also still have £72 of health benefit which is from my last employer. I have managed to take it off for this year but there is no information on how to remove it from Oct last year. Why didn't HMRC stop it when I told them I had a new employer? Why would they not allow the new employer to report that? (I do have it but with this employer I pay for it, with the old employer it was free but taxable).

Only £72 so I'm not that bothered but, really, aaaargh!

Mel

[XFool]

I feel your pain, like Pochisoldi I *hate* my tax code reflecting last year's incime (etc, because it changes every year and they always get it wrong.

I don't mind that so much, after all, even I don't know what my annual income will actually be until the end of the tax year. So using last years figure is generally the best available approximation in most cases. What I don't get is why HMRC can't in the first instance do this themselves, using the figures from the SA. It seems I now have to do this manually every year.

[melonfool]

I feel your pain, like Pochisoldi I *hate* my tax code reflecting last year's incime (etc, because it changes every year and they always get it wrong.

I don't mind that so much, after all, even I don't know what my annual income will actually be until the end of the tax year. So using last years figure is generally the best available approximation in most cases. What I don't get is why HMRC can't in the first instance do this themselves, using the figures from the SA. It seems I now have to do this manually every year.

They do.

They do it to me and I hate it, they don't do it to you and you want them to.

I'm sure there is a box to tick on the SA asking them to do it, my accountant tells me she doesn't tick it but every year I have this problem so it must have been ticked at some point.

See if you can find it and tick it?

Mel

[Lootman]

What I don't get is why HMRC can't in the first instance do this themselves, using the figures from the SA. It seems I now have to do this manually every year.

Or better yet, why doesn't HMRC do what the US IRS does, and let taxpayers set their own PAYE code (or withholding rate, as they phrase it there)?