Why have I been sent a tax bill?

[brandrethmupp]

I've just had a letter from HMRC saying I've been overpaid £850 and need to repay it. I'm not self employed so how could this happen?I'm not going to pay up yet, will speak to bursary at work. Is this normal? I had no idea that I might have to budget for random unexpected bills from the government.

I think hmrc have been checking previous years tax records closely recently - quite a few people have been getting rebates but sone have been undercharged in previous years and so need to pay. There should be a calculation with your letter to explain.

Not what you need just before Christmas though :(

Is that £850 in tax or wages/bonus which were perhaps not taxed under PAYE ? There have been a lot of issues in recent years about correct coding not being applied. Which year does it relate to, as there was something in media a few weeks ago about that HMRC were now looking as far back at 2005/6, or maybe even a year earlier. Have you ever had to do a self-assessment return ? If it is a relatively small amount then you should be able to have next year's coding adjusted rather than repay it at once.

Agree you should be able to pay it through your tax code next year on a monthly basis.

Check the info that has led the underpayment is correct though as it will have come from your payroll, and I am presuming would have been their error intially.

Also check the wording. I got mine this morning and from what I can see underpaid means you owe them, overpaid means they owe you. Also you don't necessarily have to pay it back now, they can take it off next year's allowance or something

My DH has recently had a LOT of cheques flying his way for the last few years (overpayments of tax, apparently), not requested at our end, and a few friends have reported the same (either owing money from 2007 onwards or being paid back because of it). Would recommend following Happy's advice and checking the wording - from opening DH's cheques I honestly wasn't sure which was the case until I saw the cheque part for us (overpayment vs underpayment).