Collecting underpaid tax through tax code

Slightly odd one, so any advice would be very gratefully received.

My client is currently employed full time, receiving her state pension and receiving rental income from a residential property she owns. She owes over £1k in tax for the tax year 2011-12, which would be payable by 31st January 2013. I have suggested to her she might find it easier to manage her personal finances if she elects to have the underpaid tax collected through her tax code. However, she will be retiring from full-time employment in October 2012.

Am I correct in thinking that the amended tax code would be applied as soon as the tax return is filed and therefore would be deducted through her tax code for the remainder of her employment? Or would it be implemented from 2013-14? What would be the implication when she retires with regards to the residual tax owing not yet collected through her tax code? Presumably this would just be due for payment by 31st Jan 2013?

Many thanks in advance

SD

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Any underpaid tax from 2011

K81 |
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