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Why your HMRC and TaxScouts calculations are different

  • 3 min read
  • Last updated 1 Sep 2023

You’ve filed your tax return and paid your bill on time but HMRC aren’t impressed. Their figure on your tax bill doesn’t match what you paid! 😲

Why has this happened, you ask? Well, HMRC probably know something we don’t… 🧐

We’re not talking about your juicy secrets… 💋Just your income, payments and fines! We will, however, share why this might have happened.    

You’ve underpaid your tax to HMRC

If you’ve paid too little tax by the end of the tax year, 5 April, expect a knock at your door from HMRC. ✊

Not literally, but do check your post box, as HMRC will send you either a tax calculation letter (a.k.a a P800) or a Simple Assessment letter. 

If you’re employed or receive a pension, expect your letter to arrive between June and November, telling you how much tax you owe. 📅

If you’re registered for Self Assessment your tax bill will be adjusted automatically, which means no fan mail from HMRC. 📮

You’ve not paid a penalty to HMRC 

HMRC doesn’t miss a thing and if you’ve missed or made a late payment, they’ll be sure to pull you up on it.

This is how HMRC’s penalties work:

How late you areFine (each gets added to the others!)
between 1 day and 3 months£100 flat fine
between 3 months and 6 months£10 each day
between 6 months and 12 months£300 flat or 5% of your tax bill (whichever is greater)
over 12 months£300 flat or 5% of your tax bill (whichever is greater)

You can appeal against the penalty if you have a reasonable excuse

Pro tip: If you pay your outstanding tax within the first 15 days after the due date, you can avoid the penalty.🫸

Remember, if we’re unaware of your penalties from past tax returns, you’ll receive a different calculation for your tax bill from us compared to HMRC. 

HMRC believe you haven’t declared some of your income 

There are a few reasons why you may not have declared some of your income to HMRC:

  • You didn’t realise you had to tell HMRC about it
  • You were unsure how to declare it
  • You didn’t declare it because you couldn’t pay it

These are all easy mistakes to make. But to avoid a telling-off from HMRC, it’s best to notify them as soon as you can. 😅 

You should tell HMRC if you earned other taxable income such as:

If any of this income takes you over your Allowance, you’ll pay tax on it.

So, if you don’t usually file a tax return, you’ll need to register for Self Assessment to declare any income you’ve not paid tax on. 

If you’ve already registered but have not declared all of your income, you can make a change to your return. 📝 

This also applies if you’re a UK resident but earn foreign income. You’ll probably need to file a Self Assessment. ✈️

If you don’t report this income, you may have to pay both the undeclared tax and a penalty worth up to double the tax you already owe – yikes 😬

For any of these reasons, HMRC might suspect you have some undeclared income.

They’ll take this into consideration when you pay your tax bill, which means you’ll probably owe more tax than you expected to and your tax bill will be different to the one TaxScouts gave you. 

Other reasons why your TaxScouts calculation might be different to HMRC’s:

  • You’ve failed to upload some of your income to your TaxScouts account – it won’t be included in our calculation for your tax return
  • You have a previously incorrect bill and HMRC will amend it – this can be at any time, so they may have added this to your calculation

How to check you’re paying the right amount of tax to HMRC: 

  • Contact HMRC to check you’ve not underpaid your tax
  • Contact HMRC to check for any outstanding penalties 📅
  • Declare all of your income to HMRC and us
  • Upload all of your income to your TaxScouts account 💻

Don’t Panic!

Now you know there’s no need to panic. 

If HMRC believes you owe more than we’ve calculated, it’s probably down to one of these few reasons. 

If you’ve got any further questions, you’re not alone.

You can contact HMRC, your TaxScouts accountant, or our support team who are always happy to help!

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