Allowance

I owe £209 in tax and my tax allowance has dropped by £1049 to pay this back. This will remain till April 2025. I calculate that I will pay around £80 per month for a year to pay this off. Surely this is incorrect, am I wrong Somewhere?

Hi Gregmuzz,
Your tax free allowance is the amount of money that you can earn without having to pay tax at the basic rate (20%) - so your standard tax free allowance of £12,570 means not having to pay £2,541 of tax on your income.
If you owe £209 of tax, and you want this to be collected via your tax free allowance, we reduce your tax free allowances by the amount of these allowances that £209 corresponds to - £209 of tax would be paid on £1049 of income, hence the drop you've seen.
As your tax free allowance is spread over 12 months, so too then is the £209 reduction- you should see an extra £17.42 being deducted from your wage every month to repay your underpayment.
If you see a larger deduction in your wage, though, contact us by webchat or phone here:
Income Tax: general enquiries
Thank you.