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Hello, I am Keith, one of the experts on Just Answer, and pleased to be able to help you with your question.
How much was your interest received in 16/17. The first 1K is tax free.
This procedure is perfectly normal to make you tax neutral at the year end. You should check that the adjustment is correct. In these situations it is essential to keep a beady eye on your tax codes.
You are quite correct, HMRC should have charged you GBP 175.92, typical sloppy, slovenly HMRC approach. Personally I don't let the taxman make mistakes like that and tend to come down on them like a ton of bricks. With a total overall income of 16K you will be well within the basic rate Income Tax (IT) bracket at 20%. Just to rub it into them I would suggest that you insist on your tax code being reduced to recover current year unpaid tax and watch them squirm.
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