Tax codes

[Steeleydan]

Not really investments but didn't know where to post.
Its tax codes
I have a savings account where I get approx 4200 a year in interest, I have a minimum wage job. However to pay the tax on interest hmrc change your tax code, from 1257l to what ever they need to take so 4200 less 1000 tax free interest.
So today ive been lumped with a k24 tax code, they have taken huge tax off my already low wage.
So rung hmrc, long story short hmrc have notified my employer in 2025 of 5 different tax codes to try yo collect the extra tax, none have been used tax code on wage slip is still 1257l, so now iam jumped with £1722 tax to pay from last tax year and the one before all because my employer’s accountant havnt used the correct tax codes,obviously they are going to say they didn't receive them. One I can excuse but 5 changes no way.
So do I pay the £1722 off all at once,I still think it's wrong or just stomach it and pay 3 times as much tax as usual for a year. Do u think 1722 is an estimate

Do you have ISA’s on the go to reduce your taxable interest?

I would contact HMRC and ask about paying it off more slowly. Either that or take out some money from your investments to pay the tax owed.

The interest you've earned will have been reported to HMRC by the bank that the savings are held by so it will be an accurate assessment. £4,200 interest income at 20% tax is £840 tax due each year.

If you're earning that level of interest, the alternative is to set aside the tax amount and get it paid off in a lump sum, then you wont get deductions from your pay. You must have a huge amount of cash to earn £4k interest!

No, you can only put 20k in one

I didn't know you could pay it in a lump sum, honestly it's not alot of money, not enough to by a house by a long way, but last couple years interest rate has been at nearly 4% it's only in a bog standard savings account

£20k every tax year though, so presumably you are feeding in £20k each year?

Yeah i get this and hmrc have sent new tax codes,5 in fact in 2025 to my employer’s payroll accountant and they have never implemented them. So hence the under payment of tax for the last 2 years. Tax is right for my work, but tax via interest is taken through paye. And for 3 years ive been on 1263l basic code,accountant has never changed it

£20k limit is each tax year. Start now and you can gradually get all the cash into an ISA and the interest will become tax-free as you progress.

employers should get tax codes electronically these days, but there is no reason you can't give in your coding notice if they aren't getting your right and ask them to fix it.

Why are you holding so much cash?

No iam not,I ought to be though.
Spoke to hmrc today iam just gonna pay this debt off I think. My employer has agreed to speak to accountant re why they have ignored all the tax code changes

Just money ive saved and a small inheritance, its honestly not even enough to by a house or a park home, its come about because interest rates have gone up. Plus it's 3 years worth of tax on savings because accountant who my boss uses has never changed my tax coded to collect it

Its never same as interest rates fluctuate going forward iam going to try and ask hmrc if I can pay it in a lump sum not through wages then we won't have another fuck up

How do I give in my coding notice and who too. Not sure what this term means

Unless it's changed recently employers can only accept tax codes from HMRC, I say next to someone at work who had no end of problems with his tax codes and was told that the payroll department needed an instruction from HMRC

Can't you sort it out through your government gateway account OP, an accountant can't change your tax code

You pay it as HMRC say, it could be now or later. If you think it's wrong contact HMRC they are pretty good.

They can when they're sent to them from hmrc electronically, they have had them just not used them

If you don't work full-time you might qualify for the starting rate for savings, which allows up to £5,000 in interest at a zero taxable rate, plus your annual allowance of £1,000.