Why have I paid less tax?

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  • Jamie_Limehouse
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    Many thanks for all your help
  • MichelleUK
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    Thanks again for your input.

    Signed up and logged in. For current employer it reads as follows.

    Would have posted an image but cannot as a new user on the forum.

    Income Tax and National Insurance paid to 31 October 2017

    Your taxable pay between 31 July 2017 and 31 October 2017 is £12,500.01.

    Using the figures supplied by your employer we estimate your annual taxable income from them will be £33,467.


    Also - yes, the amounts relating to previous employers appear correct.

    Any pointers?

    These figures show that you have now been paid for October - can you say how much tax you have paid in October?

    From the previous posts, it is clear that you have moved from 1150L non cumulative to 1150L cumulative. This only normally happens for 2 reasons:

    1. HMRC has given your employer a new tax code. To make it cumulative, they should also have told your employer your previous gross pay and tax. It may be that it is a mistake by HMRC or your payroll people have not entered the previous amounts.
    2. You have given your payroll people your P45 and they have used the correct code but forgotten to also pick up your previous pay and tax details.

    Check these two options first, and if it is not a payroll mistake, phone HMRC. They should be able to put you on a non-cumulative code that will recover the undepayment over the rest of the tax year, rather than take it in a lump. In theory, with the new 'dynamic tax code system' HMRC should do this themselves eventually, but you could phone them to give them a nudge!
  • molerat
    molerat Posts: 31,855 Forumite
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    edited 27 October 2017 at 3:13PM
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    First of all - thank you all for the prompt feedback and your time spent replying.


    @glider3560 - Thanks for the input.

    The YTD totals are only including payments from this job (M1: £4,166.67, M2: £8,333.34).

    And, to the second point, they are: M1: Tax Basis: Week 1/Month 1, M2: Tax Basis: Cumulative.

    Seems strange that the first month's tax was correct, then second was the undertaxed.

    Do you conclude anything from the above feedback?


    @molerat

    Both payslips state: Tax Code: 1150L

    I honestly can't remember if I gave them the P45. I've been on the same salary amount (50k) since Jan 2016 and haven't missed a paycheck since then, despite changing jobs.


    Looks like I have definitely underpaid and this will need to be repaid in due course.

    What steps can I take to manage this repayment gradually, rather than one hit.

    Do I speak to payroll at my company? Or does HMRC manage what's taken through PAYE?

    Thanks, Jamie.

    Edit: typos
    All due to calculating your pay as per my post. As you have been on a pretty consistent salary then my forecast of what you owe, and are adding to, should be pretty much correct. The other possible fly in the ointment could be getting paid twice in the same tax month.

    I have no faith in them giving a non !!! tax code that will collect the underpayment over the rest of the year, been there done that and they screwed it up leaving me to pay over the next year as well. Admittedly an interest free loan but still a PITA. Hopefully OP still has the £1K underpayment put to one side so correcting the earnings straight away will only mean the collection of that amount next month (excepting the 2 pays 1 month scenario of course).

    The October pay slip may have it corrected though.
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