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TonyTax
TonyTax, Tax Consultant
Category: Tax
Satisfied Customers: 15916
Experience:  Inc Tax, CGT, Corp Tax, IHT, VAT.
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On my income last year I paid NI and Income tax through PAYE,

Resolved Question:

On my income last year I paid NI and Income tax through PAYE, my pension contributions didn't change or my charitable giving. Why have I got a tax bill via my self assessment of £3.4k - did something change before the 1st April?
Submitted: 1 year ago.
Category: Tax
Expert:  TonyTax replied 1 year ago.
Hi.
Can you tell me how much your gross pay was for 2014/15 and how much tax was deducted through PAYE. What was your final tax code? Did you have any taxable emeployment benefits. How much did you contribute to your pension and to charities (actual payments)?
Customer: replied 1 year ago.
Hello, Gross £210,707 - deducted was £72,913 final tax code was 1784L Taxable benfits were Private Health at £1054 - pension contributions net were £11736.84 and Charitable giving net was £660 - net interest on savings was received at £37.72 - that's all the figures in my tax return!
Expert:  TonyTax replied 1 year ago.
Thanks.Leave this with me while I draft my answer.
Expert:  TonyTax replied 1 year ago.
Hi again.
You appear to have been given the personal allowance of £10,000 for the 2014/15 tax year. However,as you earned over £120,000, you are not entitled to any of it I'm afraid. You should have had higher rate relief for pension contributions of £8,150 and for gift aid of £458 less £1,054 private medical insurance of £1,054 leaving you with net allowances of £7,554 which converts to a tax code of 755L. You had allowances of £17,840 (code 1784L) which clearly includes the £10,000 personal allowance.
I have calculated your gross tax liability at £77,557 so there must be something else in your P800 tax calculation which makes your underpayment £3,400 or so instead of £4,644 (£77,557 - £72,913).
Take a look at the link below for information on the loss of the personal allowances.
https://www.gov.uk/income-tax-rates/income-over-100000
I hope this helps but let me know if you have any further questions.
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Customer: replied 1 year ago.
I am in sales and earn commission, it was a good year - my new tax code for this year is 880T.
Thank you for the explanation. So the rule came in 14-15 tax year not just for this year.
Expert:  TonyTax replied 1 year ago.
The £100,000 rule has been around for several tax years, since 2010/11 from memory.

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