HMRC Estimated Income

Hi There I was wondering if anyone can advise me. On my HMRC tax account for next year, I have been looking at my estimated salary and updating the amount estimated, which adjusts my tax code accordingly. Under the Tax free amount, Additions - it asks for Personal Pension Payments. But I don't know what I should put in for this figure - Do I just put in the total annual pension payments i make ? or an adjusted figure? I pay £2400 per year into my pension, is this simply what i put in this field (I dont want to under pay and then owe money!) Thanks for any help in advance

Hi,

You should enter the amount plus any basic rate tax relief that is given. You will need to check that the amounts are not deducted from your pay before tax, as there is no further relief due on these contributions.

Thank you.

Thank you, just for clarity. I am a higher rate taxpayer, my pension is deducted after tax. So does that mean for every £100 i pay - i should report £120? Many Thanks Mark

Hi Markal,

You declare the amount paid in multipled by 1.25.

Thank you. 
 

Hello, in July this year I received a one off bonus payment. HMRC then decided to estimate my annual salary, which was then massively incorrect. HMRC then also created a new tax code which wiped out a large part of my personal allowance. I completed a ‘self assessment’ return shortly before this happened. I had to call HMRC to get this rectified, and spent 50mins on hold to get through. Is this something HMRC are allowed to do? Am I going to have to watch out for this in the future every time I work overtime or get a bonus?

Hi
HMRC try to estimate your income during the tax year to collect the correct tax as it is due.
For bonuses this can lead to the estimated amount being too high.
If you have signed up for the Personal Tax Account you can update this figure in the future after you receive a bonus.
Personal tax account: sign in or set up

Hello I was just on hold to HMRC for 40 mins but was disconnected so thought I would try on here. I recently took up a second job which I will get about an extra £350 for a month. My tax codes have changed and overestimated how much I will be earning for the year. I am now concerned that picking up an extra job will mean that I am taking home less each month due to Tax. I took up an extra job because my mortgage is going up by £950 a month. I know this may even out at the end of the tax year but I need the money now for the mortgage. I am confused how taking up an extra job can mean that you earn less each month? It is very stressful! I cannot get through to HMRC on the phone so I hope you can help. Thanks!

Hi Marianne McGrath,
You would need to contact the PAYE helpline to have your tax codes checked and your estimated pay changed.
Their telephone number is 0300 200 3300 or via webchat here:
Income Tax: general enquiries
Thank you. 

Hi, I received a new tax code in July 2023. I received a bonus from my work split out into two payments in July 23 and Sep 23. I did some over time in Sep 23 and in Dec 23. Two very different amounts but very similar deductions. I was also underpaid this month due to a spike in tax which meant I did not receive my basic pay this month. I noticed my estimated pay was £22,499 over what I would actually earn. I have only just noticed this estimation in Jan 2024 and just corrected my annual earnings (including any over time and bonuses.) How do I go about finding out how long this estimation has been in place and will I be owed the tax back I appear to have over paid? Thank you for your help in advance.

Hi Jade Young,
If the amendment to your estimated pay results in a refund an amended tax code will be issued to your employer and once operated any refund due will come back through your wages.
For previous tax year if you do not complete a Self Assessment HMRC will automatically review the tax year after the tax year end and if a refund is due we will issue a tax calculation to you.
If you have a Personal tax account: sign in or set up once the calculation issued the details will also be shown online. 
Thank you.

Hi, This is my first tax year in the UK. I only have one job with putting the estimated income in HMRC app. The question is: - should I just put the whole year income(before tax) in estimated income? - or do I put the amount after deducting the personal pension(5% of income) from total annual income? - how about NI? Should it be deducted? - how about car benefits which I have already added to the benefit separately? Do I need to add this on the estimated annual income? - do I need to add the medical insurance(company’s benefits) on top of the annual income? Besides, what is the reason to submit the self assessment if the annual income is over 100k? I understand £1 of personal allowance will be deducted for every £2 earn above 100k income, is the car benefit(e.g. £8k) needs to add to estimated annual income which submit in HMRC? Do I need to apply for tax relief related to car benefit tax? Thank you in advance.

Hi, I wonder if you could advise me. I checked my estimated income for 2024/25 and observed that my state pension income was incorrect. It is currently set at the value of the carers allowance that is paid to me. However, I am 66 this year and my full state pension will start in September at which time the carers allowance will cease. I contacted HMRC hoping to get the estimated state pension field in the estimate raised to my new annual value. This would help spread the increased tax burden over the full year rather than a big hit in the second half of the year. The advisor from HMRC said this could not happen but reduced the carers allowance figure to what would be the income until it stops in September effectively exacerbating the tax burden later in the year. I don’t understand why that figure could not be increased to the value I expect it to be for the whole year i.e. carers allowance until September plus state pension for the rest of the year. Grateful for an explanation please.

Hi Marcuslam18 Lam,
For the estimated income you do not deduct NI contributions.
The  car and medical benefit are shown separately so not included.
If your pension is dedcuted from your wage before tax is calculated then you would not deduct again.
Up to the 2023/24 tax year if your income was over £100K this was Self Assessment criteria but from 2023/24 this increased to £150K. 
Thank you. 

 

Thanks for your reply HMRC. Just a follow up question related to the personal pension. Since I selected the standard payment option which the personal pension was deducted after tax(means the 20% tax was added to my person pension). Does it mean I need to apply for tax return by self assessment As my tax band is 40%? Or how should I deal with this? Thanks.

Hi Robert Foster,
Your tax code can only be updated once the State Pension starts.
We will be advised by the department of Works and Pensions when your State Pension is put into payment and at that time your tax code will be amended.
Thank you. 

 

Hi Martin,

You can check if you meet Self Assessment criteria at:

Check if you need to send a Self Assessment tax return

If you do not then you can contact HMRC to review.

Income Tax: general enquiries 

Thank you.

Hi, I wonder if someone can help me. I am currently receiving a personal pension that puts me in the basic 20% tax band. However, in a couple of years, I will reach 66 years old and the state pension will kick in. I understand that my tax code will then reflect that I am receiving a state pension. But if my combined income between my personal and state pensions is over £50270 will I have to pay tax at 40% on income over £50270? The reason I am asking is that if my tax code was not altered when I receive my state pension, my income would be higher than £50270, but when my normal tax code was applied my income would fall below the 40% tax allowance.

Hi,

We cannot comment on future events as legislation and, or plans may change.

Thank you.

I have just spoken to an HMRC adviser about an underpayment of tax on my personal account for 23-24. They advised that the estimated income amount 'sent by my employer' was incorrect which contributed to the problem as my tax code was set using this incorrect (and too low) value. When I asked exactly what electronic return the employer sends to provide this estimated income figure, he could not give me a response so I don't think the employer does send this figure but would be good to confirm. Is the individual meant to update this on their personal tax account or should it be automatically updated based on the earnings patterns and data sent through on the RTI submissions throughout the year?

Hello. According to HMRC my estimated income is more than £50,000 higher for the current tax year than it should be. I estimate my income will only be around £16,000 this year plus another £8,000+ from teacher's pension. I am paying a lot more tax than I should be. I have never earned anywhere near the estimate. I have tried phoning HMRC a significant number of times over two months. The automated message system always ends the call, telling me to go online. I have an account with HMRC but I cannot find where to report that the estimate is way too high and I am paying too much tax. I keep going into circular loops, where it either goes into last year's tax payments or tells me info about how much I have paid so far this year. However, I cannot find where I can contact HMRC to report the income estimate for the current tax year is way too high. I would be so grateful if you could direct me to the right page.