How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask TonyTax Your Own Question

TonyTax
TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15711
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
13905389
Type Your Tax Question Here...
TonyTax is online now

I have received a tax demand for the second year running for

Customer Question

I have received a tax demand for the second year running for underpaid tax. All my income is paid via PAYE and is made up of my current employer P60 and P11D and three pensions P60 amounts. HMRC advise me each year they have issued a tax code to each of these but this year I find I have underpaid £4550 and Last year £3350. What can I do?
Alan
Submitted: 3 years ago.
Category: Tax
Expert:  TonyTax replied 3 years ago.

Hi.

There probably isn't much you can do insofar as avoiding having to pay the tax is concerned I'm afraid.

What you need to do is to make sure all your tax codes are correct. You cannot assume that they are which is what most people do unfortunately. From what you have told me, somewhere along the line you are paying too little tax on one or more of your income sources. If the tax codes were issued part way through the tax year on a M1 (Month 1) basis then the errors which occurred earlier in the tax year won't be picked up until the tax year end. If tax codes are changed on a cumulative basis mid-tax year as opposed to on a M1 basis which ignores errors until the end of the tax year, you would potentially pay back all the tax underpaid in one go which most taxpayers cannot afford to do.

You need to make sure that the taxable benefits that you have are correctly shown in your current work tax code. If you have a company car, check what the benefit should be here. Make a list of all your pensions and call the tax office on the number here. Tell them what the problem is, ie that you are underpaid ever year, and ask them to review all your 2013/14 tax codes and to make any necessary amendments while you are on the phone. Tell them what you think the car benefit should be if you have one and what the other taxable benefits are if you have any.

When you receive the revised tax codes, make sure they are what the tax office told you they have changed them to. Depending on the level of your income overall, some pensions should be on BR (20%) tax codes or on D0 (40%) tax codes or on K codes. If any underpayment has accrued in the current tax year, 2013/14, that will manifest itself after the end of the tax year on 5 April 2014. At the moment, you are playing catch up.

You might ask the tax office to explain in writing why you appear to be underpaid each year even though they are issuing tax codes. Take a look at the document here and ask the tax office if it could apply to you.

I hope this helps but let me know if you have any further questions.

What Customers are Saying:

 
 
 
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C.
< Previous | Next >
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C.
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex
  • Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult. GP
  • I couldn't be more satisfied! This is the site I will always come to when I need a second opinion. Justin
  • Just let me say that this encounter has been entirely professional and most helpful. I liked that I could ask additional questions and get answered in a very short turn around. Esther
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C.
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex
 
 
 

Meet The Experts:

 
 
 
  • Sam

    Sam

    Accountant

    Satisfied Customers:

    6894
    26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
< Last | Next >
  • http://ww2.justanswer.com/uploads/TA/Tax Expert/2013-8-21_231010_sam.64x64.jpg Sam's Avatar

    Sam

    Accountant

    Satisfied Customers:

    6894
    26 HMRC expertise, PAYE, Self Assessment ,Residency, Rental Income, Capital Gains, CIS ask for Sam Tax
  • http://ww2.justanswer.com/uploads/BI/bigduckontax/2013-8-12_222058_1.64x64.jpg bigduckontax's Avatar

    bigduckontax

    Accountant

    Satisfied Customers:

    1772
    FCCA FCMA CGMA ACIS
  • http://ww2.justanswer.com/uploads/TA/TaxRobin/2013-8-28_16186_femalebusinessprofessionalbinderhand11038485.64x64.jpg TaxRobin's Avatar

    TaxRobin

    Tax Consultant

    Satisfied Customers:

    464
    International tax
  • /img/opt/shirt.png taxadvisor.uk's Avatar

    taxadvisor.uk

    Chartered Certified Accountant

    Satisfied Customers:

    2596
    FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
  • http://ww2.justanswer.com/uploads/MS/MsAM/2012-6-9_16426_anna.64x64.jpeg Anna's Avatar

    Anna

    Teacher, writer, biologist

    Satisfied Customers:

    268
    Great research skills, variety of work experiences, teaching experience.
  • http://ww2.justanswer.com/uploads/PD/pdheslin/2012-6-6_232056_pambig.64x64.jpg pdheslin's Avatar

    pdheslin

    Consultant

    Satisfied Customers:

    51
    20+ years of internet site creation and search engine optimization. Dozens of search tools at my disposal.
 
 
 

Related Tax Questions