Every year my employer sends me a letter detailing the previous tax year's pension contributions for me to send to HMRC to claim tax relief on my pension contributions as I'm a higher rate (40%) tax payer, this has been the process every year for many years.
This year I submitted the letter as usual for the 2023/2024 year, and then through the HMRC app, without notice, I was informed I has underpaid tax for the current year, told me that my tax code was changing and that they had recalculated my previous 4 years tax with no explanation as to why, (years 2020/2021, 2021/2022, 2022/2023 and 2023/2024).
I then received a letter in the post about 3 days later telling me that my request for the tax relief wasn't eligible as I'm not a higher rate tax payer, and that I shouldn't have the relief for previous years and they were recalculating those years and told me that I now owed them around £1,200.00 as they'd given me tax relief I wasn't owed, very puzzling as why had this not been noticed previously?
I then downloaded my new tax calculations to see what was going on.
The 2023/2024 calculation is as follows:
My salary is £47,150.04 which is below the 40% threshold, however I have a company car and fuel benefit which totals £12,756.00, they've added this together to £59,906.40 on which the income tax is shown as £11,016.40.
They then deducted my personal allowance of £12,570.00 to show my total taxable income as £47,336.04.
It then states that on £37,700.00 of that amount I owe 20% tax, £7,540.00, and on the remaining £9,636.00 I owe 40% tax, £3,854.40, £11,394.40 in total, followed by £745.20 'other adjustments', (I don't know what that means or what they are, I assume amounts owed from previous years due to the new calculations), bringing my total tax payable to £12,139.60.
They now say due to the new calculations I owe them £1,123.20.
I phoned them to query it and the person open the phone didn't seem to know how company car tax and fuel benefit really worked, so said she would request a new calculation, I've heard nothing for 3 weeks now.
My employer has received my new tax code which will leave me worse off each month but I'm still in the dark as to what has happened.
Surely as my tax calculations show I AM a higher rate tax payer as they are taking 40% on part of my salary, so what/who is right or wrong? Can someone help me?!
Thanks
