PAYE coding notice - higher rate tax adjustment

PAYE coding notice - higher rate tax adjustment

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I have a 2006/2007 PAYE coding notice with a higher rate tax adjustment - which year's tax would this be?
Could it be 2005/2006 tax owing, or perhaps 2004/2005, in anticipation of a higher rate tax for 2005/2006, in anticipation of higher rate tax for 2006/2007. What's the usual form for this and what effect does this have on the liability to make payments on account? It seems the more I think about this, the more permutations I can come up with. Thanks.
Graham Kemp

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By User deleted
30th Nov 2006 11:29

Normally 06/07
It would normally be HMRC's estimate of the additional tax due on the estimated current year income which will only have been taxed at 20% at source.
Underpayments from earlier years are (usually) separately identified and easy to spot...

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By AnonymousUser
30th Nov 2006 11:43

coding notice adjustment
You do not have to accept this adjustment.

The Revenue seem to be guesstimating what your 'other' income for the year is and collecting the additional tax in advance through your code number.

The tax is not due until 31 January 2008. If the amount is small and the adjustment reasonable, then you may prefer to leave it. If however, it is a substantial sum, you can ask the Revenue to remove this adjustment from your code and just arrange to pay it in the normal way at the appropriate time.

You can just call the Revenue at the number on the coding notice to have this done.

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By User deleted
30th Nov 2006 12:16

They did this to me...
...and as suggested below, I wrote to them to ask them to change my code to 503L. I seem to remember that it didn't take long, and I got a nice big chunk of tax back on top of my salary a couple of months later. It's just a ploy by HMRC collect tax into their coffers early. In my case, I won't actually earn the extra income that they are expecting, so there's no way I'm going to let them use me as a non-interest-demanding bank overdraft!!!

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By AnonymousUser
30th Nov 2006 15:24

POA's
If you are making payments on account then the higher rate restriction is certainly not appropriate-HMRC are effectively asking you to pay tax on the same income twice. Nice for balancing the government's budgets but not very good for yours. Just ring up, point out that you are making payments on account and ask them to take it out of your code. Strictly speaking they need your agreement to include the deduction, but tend to assume this until someone shouts about it!

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By User deleted
30th Nov 2006 14:25

What about payments on account?
Thanks for all the responses. If I am making payments on account, am I right in thinking that I would, in effect, be paying twice in advance by applying the Coding Notice? Seems like it!

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