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taxadvisor.uk
taxadvisor.uk, Chartered Certified Accountant
Category: Tax
Satisfied Customers: 4983
Experience:  FCCA - over 35 years experience as a qualified accountant (UK based Practitioner)
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I am Executor in my husband,s will (he died on 10 January 2015)

Resolved Question:

I am Executor in my husband,s will (he died on 10 January 2015) and the HMRC say that there is an underpayment in his tax in the year 2013-2014, which I can't understand. I have compared his P60 and the figures don't add up. I have tried to phone HMRC several times and waited to speak to someone for up to 20 minutes, but am getting nowhere. Can you help please?
Submitted: 2 years ago.
Category: Tax
Expert:  taxadvisor.uk replied 2 years ago.

Hello and welcome to the site. Thank you for your question.

You are referring to tax year 2013-14.

Has HMRC sent you a P800 tax calculation for that year? It will show you how the underpayment has arisen.

If you were to provide me details of this earnings, tax deducted and tax code applied, I would carry out some calculations for you. Also advise what figures are being used on P800 tax calculation statement.

Many thanks

Customer: replied 2 years ago.

Yes I can give you his income/deductions/tax allowances/income tax chargeable/adjustments and result. There is no mention of the Married Couple Allowance. They say the tax underpaid is £61.90.

But the income doesn't match with the information given on his P60.

(My husband was 79 at the time of death and receiving occupational pension and state pension.)

Also I am now in receipt of half his Occ.Pension and my tax code is currently [K47. What does that mean?

Expert:  taxadvisor.uk replied 2 years ago.

Thank you for your reply.

Married couples allowance is available if you meet all of the following:

- you are married or in civil partnership;

- you are living with your spouse or civil partner

- one of you was born before 6 Apr 1935

Please advise if you meet all three of the above.

P60 would only show income that was taxed at source and would not take into account income from other sources e.g. interest received, dividends paid and state pension.

An underpayment could arise if income from any of the aforementioned sources has a different value than the only taken into consideration when giving your late husband a tax code.

I am happy to reperform tax caluculations if you wish.

You have stated that your tax code is currently K47.

The letter K is used in an employee’s tax code when deductions due for company benefits, state pension or tax owed from previous years are greater than their personal allowance.

Multiply the number in your tax code by 10 to show how much should be added to your taxable income before deductions are calculated.

Example An employee with tax code K47 and a salary of £27,000 has taxable income of £27,470 (£27,000 plus £470).

If you think your tax code in incorrect, you should contact HMRC. If you are having problems contacting HMRC on the phone, I recommend you write to them and retain a copy on file. They are required to acknowledge all written requests.

I hope this is helpful and answers your question.

If you have any other questions, please ask me before you rate my service – I’ll be happy to respond.

Customer: replied 2 years ago.

Yes please. Would you re-calculate. My husband was due to the Married Couple's allowance. His date of birth is 14.2.1935.

No interest, dividends received for tax year 2013-14

PAYE INCOME £12,133 TAX PAID £1,181

STATE PENSION/BENEFITS £8,699 TAX PAID nil

INCOME AFTER TAKING AWAY DEDUCTIONS £20,832

PERSONAL ALLOWANCE £10'660

INCOME TAX IS CHARGEABLE ON THIS AMOUNT £10,172

TAX ON £10,172 IS (BASIC RATE20%)£2,034.40

LESS OTHER TAX ALLOWANCES DUE £791.50 ?????

TAX PAYABLE £1,242.90

TAX UNDERPAID £61.90

Why haven't the HMRC raised this alledged underpayment before?

I am completely at a loss. and would appreciate your reply. Thank you.

Expert:  taxadvisor.uk replied 2 years ago.

Thank you for your reply.

It appears that your husband was given married couples allowance. The figure of other tax allowance due £791.50 is married couples allowance and the relief is at 10% (7,915 x 10%) = £791.50

The underpayment could be beacuse of incorrect tax code applied to occupational pension.

Tax returns for tax year 2013-14 were due for filing no later than 31 Jan 2015. They could not have raised the alleged underpayment before finalisation of tax return.

I hope this is helpful and answers your question.

Customer: replied 2 years ago.

Are you saying, then, that the underpayment of £61.90 is payable?

(The HMRC letter is dated 23 April 2015, but I have been ill with Crohn's disease and only recently got around to sorting this vexing question!)

I accept the anwer. It's just understanding what it all means - not easy

when you're 79 and have not faced this occasion before!.

My husband had not filled in a Tax Return for a very long time

as our tax affairs are quite straightforward. Thank you for your help.

Expert:  taxadvisor.uk replied 2 years ago.

Thank you for your reply.

I wish you speedy and full recovery.

The tax is payable.

If you are happy and there are no more issues I will appreciate if you would kindly rate/accept the service I provided to ensure I get credited for it.

taxadvisor.uk and other Tax Specialists are ready to help you
Expert:  taxadvisor.uk replied 2 years ago.

I thank you for accepting my answer.

Best wishes.