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    • Missmac84
    • By Missmac84 18th May 17, 11:15 AM
    • 7Posts
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    Missmac84
    PAYE help for messed up Tax codes
    • #1
    • 18th May 17, 11:15 AM
    PAYE help for messed up Tax codes 18th May 17 at 11:15 AM
    Hi,

    So my husband has never been self employed he's always worked for someone else.

    This last tax year he was made redundant in June and was out of work until October (he did not claim ESA in this period of time)
    He then left that job at the end of February and started a new one mid march. His pay packet at the end of April seemed wrong so he contacted his company and they said he was in BR tax. He called HMRC who said that because they didn't have his P45 from the job in February that was the reason. He found it and gave them the details over the phone. They then said they didn't have a P60 (well the company had only just sent it - it's only the end of the tax year after all)
    Anyway, HMRC said it was sorted...... until today when he's received his tax code!!

    They're stating that he owes £1850 in unpaid taxes (doesn't say for which period) So as a result they have broken his tax down as follows:

    Personal allowance - £11500
    Job expenses - £501
    Total - £12001
    Less underpayment restriction - £9251
    Total tax free amount - £2750

    Can someone please help because everytime we phone HMRC they constantly say it is his fault......

    So his code is 275L
Page 1
    • xylophone
    • By xylophone 18th May 17, 11:42 AM
    • 22,058 Posts
    • 12,725 Thanks
    xylophone
    • #2
    • 18th May 17, 11:42 AM
    • #2
    • 18th May 17, 11:42 AM
    He had three jobs in the tax year 2016-17?

    There is a P45 (and full details of any redundancy payment) for job 1, a P45 for job 2 and a P60 for job 3?

    What do they show?
    • anniecave
    • By anniecave 18th May 17, 11:52 AM
    • 2,140 Posts
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    anniecave
    • #3
    • 18th May 17, 11:52 AM
    • #3
    • 18th May 17, 11:52 AM
    Did he give a P45 from job 1 to job 2 (or does the P45 from job 2 include the cummulative pay figures from job 1 or not)?

    Did he have any underpaid tax carried forward from a previous year?
    Indecision is the key to flexibility.
    • Missmac84
    • By Missmac84 18th May 17, 12:14 PM
    • 7 Posts
    • 1 Thanks
    Missmac84
    • #4
    • 18th May 17, 12:14 PM
    • #4
    • 18th May 17, 12:14 PM
    He's passed p45s to both new companies but after just having a new baby everything is in abbot of disarray. If needed could we get copies from the companies?

    Thanks for replying x
    • 00ec25
    • By 00ec25 18th May 17, 1:01 PM
    • 4,365 Posts
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    00ec25
    • #5
    • 18th May 17, 1:01 PM
    • #5
    • 18th May 17, 1:01 PM
    you need to find his payslips from his 3 jobs and see what tax codes were used on each of them

    for him to have "underpaid" tax having had 3 jobs and a period when he was not claiming any benefits (so no taxable income) he must have been on incorrect tax code for at least one of those jobs

    the fact his final tax code for the year was BR, but relates to a job he had for only the final month of the tax year will not have resulted in him paying more tax than he should have done on that job, so the error must lie earlier

    the obvious is job 2 gave him a full tax code and treated him as though it were his first employment that year so he got backdated allowance. When that was spotted by HMRC he would owe tax on the allowance he should not have got.
    • Missmac84
    • By Missmac84 18th May 17, 1:31 PM
    • 7 Posts
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    Missmac84
    • #6
    • 18th May 17, 1:31 PM
    • #6
    • 18th May 17, 1:31 PM
    If the error was to lie with job 2 - should they not be liable for paying the tax back?
    As the error is theirs and not my husbands?
    • Missmac84
    • By Missmac84 18th May 17, 1:46 PM
    • 7 Posts
    • 1 Thanks
    Missmac84
    • #7
    • 18th May 17, 1:46 PM
    • #7
    • 18th May 17, 1:46 PM
    Thanks everyone for replies so far, so I've done some digging and hope this helps with some answers??

    In Jan 14 he received a tax code of 887L for the employer he was still with in June 16
    In July 14 the code was then changed to 997L (again same company)
    But and this is where the problem lies, all payslips were online..... apart from his last one which then bizarrely shows a tax code of 2038T/0

    Fast forward to his first payslip with job number 2 of 16/17 tax year and the code is 1100L
    However, 1 month later it is 1150L

    So my question is, if the companies that he has worked for have used the wrong tax code - then shouldn't HMRC be chasing the company rather than penalising my husband?
    • Missmac84
    • By Missmac84 18th May 17, 1:49 PM
    • 7 Posts
    • 1 Thanks
    Missmac84
    • #8
    • 18th May 17, 1:49 PM
    • #8
    • 18th May 17, 1:49 PM
    Sorry done some more digging as I noticed on his last company payslips the letters W1/M1 after the code which when I googled it means he was on emergency tax...... He'd have been on this code for 5 mths would this have cause the underpayment and again if so should it be the fault of that company??
    • 00ec25
    • By 00ec25 18th May 17, 4:22 PM
    • 4,365 Posts
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    00ec25
    • #9
    • 18th May 17, 4:22 PM
    • #9
    • 18th May 17, 4:22 PM
    whilst it is common in the modern world to seek to blame others, responsibility for checking tax codes rests with your husband. His employers responsibility is limited to processing the info they are given. The validity of the info is your husbands's responsibility. If you do not understand why the various codes have been issued over time then you need to sort it out with HMRC

    the role of the company is to apply the tax code they are given, the company is not responsible for checking it is the "correct" code since they have no info whatsoever on the full personal circumstances of the tax payer to decide what the code should be.

    Either the employee gives a code to the employer (eg: P45 form handed over) or HMRC notifies the employer through "the system". Where HMRC notifies in such manner they send a coding notice to the taxpayer so the taxpayer can check it for themselves before it hits their payslip. Naturally very few taxpayers bother to do so, and many probably bin the code notice as they don't know what it is, until they are chased for extra tax
    • xylophone
    • By xylophone 18th May 17, 6:58 PM
    • 22,058 Posts
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    xylophone
    https://www.gov.uk/tax-overpayments-and-underpayments

    He wasn't on the standard personal allowance for 14/15 or 15/16 and only
    for a short period in 2016-17.

    Gather all the paperwork he has for those three tax years and see whether you can work out what has happened.

    https://listentotaxman.com/

    Above might help.
    • dori2o
    • By dori2o 19th May 17, 12:00 AM
    • 7,270 Posts
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    dori2o
    If you check the tax codes each one of them will state that it is your own responsibility to check the code is correct and that it is being operated by your employer.

    The responsibility to ensure that the right amount of tax is being collected lies with the taxpayer.

    You need to ask which period this underpayment is from, and how it has arisen. If possible provide the details here.

    Can you provide the breakdown of the £2038T tax code, the P45 and P60 details for 2016/17, and confirm if your husband has provided details of expenses incurred in any of the last few tax years.

    There are additional allowances in the tax code 2038T of 9380. This is giving tax relief of £1876. We need to know what they are.

    The latest tax code only gives additional allowances of 501 which is labelled as job expenses. Could it be possible that your husband has previously claimed expenses in a previous tax year which were then carried into the tax code for 2016/17 as an estimate assuming that his expenses would be similar year on year, but then his actual expenses were much lower than the relief he had been given?

    Again, assuming that the allowance in the code is related to expenses then it would be your husbands responsibility to review his own circumstances and if he believed his expenses were going to be much less then he should have contacted HMRC by phone, post, online submission of the P87 tax relief for expenses of employment form, the personal tax account, or even by webchat, to provide a much more accurate estimate.

    Only your husband would know, or have an idea of, what his expenses were going to be.

    Finally, regarding the BR tax code in operation on your husbands payslip at the END of April, this has nothing to do with tax underpayments for previous tax years as any payments received after 5 April 2017 fall into the current tax year.
    To equate judgement and wisdom with occupation is at best . . . insulting.
    • dori2o
    • By dori2o 19th May 17, 12:16 AM
    • 7,270 Posts
    • 12,117 Thanks
    dori2o
    whilst it is common in the modern world to seek to blame others, responsibility for checking tax codes rests with your husband. His employers responsibility is limited to processing the info they are given. The validity of the info is your husbands's responsibility. If you do not understand why the various codes have been issued over time then you need to sort it out with HMRC

    the role of the company is to apply the tax code they are given, the company is not responsible for checking it is the "correct" code since they have no info whatsoever on the full personal circumstances of the tax payer to decide what the code should be.

    Either the employee gives a code to the employer (eg: P45 form handed over) or HMRC notifies the employer through "the system". Where HMRC notifies in such manner they send a coding notice to the taxpayer so the taxpayer can check it for themselves before it hits their payslip. Naturally very few taxpayers bother to do so, and many probably bin the code notice as they don't know what it is, until they are chased for extra tax
    Originally posted by 00ec25
    This ^^^

    Given the changes coming from the end of this month which mean in year underpayments (previously called potential underpayments/PUP's) created by changes to tax codes (mainly due to changes in benefits in kind but also due to other causes, incorrect codes operated, failure to hand in P45's, and due to duplicated allowances) will be collected in the tax year they arise rather than left until the next tax year, it will be essential that people start to read and understand their tax code notices.

    Failure to do so could, in extreme circumstances, mean that the first time people are aware of such changes is when a very large amount of tax is deducted (upto 50% of weekly/monthly taxable pay) from their pay.
    To equate judgement and wisdom with occupation is at best . . . insulting.
    • Missmac84
    • By Missmac84 19th May 17, 9:28 AM
    • 7 Posts
    • 1 Thanks
    Missmac84
    Is that what is happening for my husband then? With his tax free allowance being so low for this year?

    Thanks for the replies.
    • badmemory
    • By badmemory 19th May 17, 1:47 PM
    • 519 Posts
    • 509 Thanks
    badmemory
    Have you checked with them that they don't think he is still working 2 jobs. A delay in job 2 showing him as left could cause a problem especially as it was so close to the end of the tax year.
    • Missmac84
    • By Missmac84 20th May 17, 5:10 PM
    • 7 Posts
    • 1 Thanks
    Missmac84
    Badmemory:

    After lots of calls to the tax office - that's exactly what it was. The tax office had all the P45's etc but because job 1 company was taken over just before he was made redundant - HMRC thought he was working for two companies even though both names of the company showed on his P45.

    Anyway, long story short, instead of £1850 owes, it is in fact only £46.

    Thanks to all for your help - I'll make sure my husband takes more notice of payslips and tax codes from now on xx
    • agrinnall
    • By agrinnall 21st May 17, 9:48 AM
    • 17,932 Posts
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    agrinnall
    But and this is where the problem lies, all payslips were online.....
    Originally posted by Missmac84
    I'm not sure why you think this is a problem (although it seems you're not alone in thinking so given what people say in other threads). Having payslips online is very common, and I've never come across any employer that doesn't give it's employees access to them, so all you need to do is log on the check. Why wouldn't you do that every month just as you would check a paper payslip?
    • xylophone
    • By xylophone 22nd May 17, 12:38 AM
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    xylophone
    I'm not sure why you think this is a problem
    No access to old company's on line portal once he had left its employ?
    • agrinnall
    • By agrinnall 22nd May 17, 8:49 AM
    • 17,932 Posts
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    agrinnall
    No access to old company's on line portal once he had left its employ?
    Originally posted by xylophone
    That may be the case, but there's nothing to stop them being viewed when an employee, and I've yet to come across as system that doesn't allow you to print and/or download the payslip. And clearly the OP did have access because one payslip with that employer was seen.
    • xylophone
    • By xylophone 22nd May 17, 11:04 AM
    • 22,058 Posts
    • 12,725 Thanks
    xylophone
    But and this is where the problem lies, all payslips were online..... apart from his last one which then bizarrely shows a tax code of 2038T/0
    Access to portal closed so paper salary chit provided?
    • agrinnall
    • By agrinnall 22nd May 17, 5:32 PM
    • 17,932 Posts
    • 13,601 Thanks
    agrinnall
    Access to portal closed so paper salary chit provided?
    Originally posted by xylophone
    Maybe, but we may never know...
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