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Posted Wed, 17 Nov 2021 15:59:20 GMT by Pipeyrw
I would like some clarification on how a previous year's underpaid tax is being treated on my current Self Assesment calc. I had underpaid tax in a previous year which was incorporated into my tax code, reducing my personal allowance for 20-21, which was expected. In the calculation for 20-21 I can see that my personal allowance has been reduced, giving a total taxable income figure (see £aa.aa below,my understading is that the underpaid tax is incorporated into this amount via personal allowance. This figure is then used to calculate "Income Tax due after allowances and reliefs" (see £bb.bb below) - all good. However, it seems that this underpayment is being accounted for twice because further down in the calculation, the underpaid tax appears again (see £dd.dd below) - so it looks like it's being accounted for twice - in £aa.aa via personal allowance deduction, then in £dd.dd in addition. Total income on which tax has been charged £aa.aa Income Tax due after allowances and reliefs £bb.bb Income Tax due £cc.cc plus Underpaid tax for earlier years in your tax code for 2020-21 £ee.ee Income Tax due after allowances and reliefs £ff.ff Can you please clarify or explain how the underpaid tax seems to be accounted twice? Thanks,
Posted Fri, 19 Nov 2021 14:41:21 GMT by HMRC Admin 28
Hi,

The underpaid tax in the code needs to be declared because when you declare your income and tax paid during the year, if the underpayment is not included in the calculation this would calculate a tax overpayment.

The underpayment can show more than once however you will only be charged the amount once.

Thank you.

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