Underpaid tax Box 7 Tax Calculation Summary

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George
George Registered Posts: 43 Regular contributor ⭐
in General accounting discussion
Can anybody ease the pain? It's driving me mad.

The correct amount of tax has been deducted by employer as shown on P60, by way of adjusted tax code (adjusted to collect underpaid tax from previous year). This has been inserted correctly on the Employment page of the tax return. HMRC have amended the return, because the underpaid tax was not put in box 7 of the tax return. Why when I put the underpaid tax figure in box 7 is the tax liability increased by the same amount? Hasn't this tax been taken in the adjusted code?

Thanks for your help.

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  • deanshepherd
    deanshepherd Registered Posts: 1,809 Beyond epic contributor 🧙‍♂️
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    If you dont put the figure in Box 7 then the calculation will show that tax has been overcollected during the year because they won't know that part of that tax being collected actually relates to an earlier year.

    For anyone with PAYE income I ALWAYS phone HMRC to check whether there is anything to be put in box 7. Saves an embarassing phone call to the client when HMRC correct the return.
  • George
    George Registered Posts: 43 Regular contributor ⭐
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    Thanks, Dean.
  • Monsoon
    Monsoon Registered Posts: 4,071 Beyond epic contributor 🧙‍♂️
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    deanshepherd wrote: »
    For anyone with PAYE income I ALWAYS phone HMRC to check whether there is anything to be put in box 7. Saves an embarassing phone call to the client when HMRC correct the return.
    Thanks for that tip Dean, box 7 entries always boggle my little brain!

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