Tax problem - my fault or theres?

Fenlock

Hi, just wanted to ask for a few opinions on this - hope this is the right board.

Ok for about 2 years, my Tax code on my payslip (full time employed) has been 386L. I have a company car, estimated at about £3500 per year.

About a year ago, i received a PAYE coding notice from the tax office, saying my Tax code was changing from 386L to 204L for the period of april 2007-2008. I did not think anything of it at the time, and someone had told me that it was sometimes normal to receive these letters late as the Tax office can have a back log - as i received it around October time in 2007.

However i didn't think any more of it.

I noticed around march time this year, that my tax code on my payslips was still 386L. I didn't investigate it at that time. A few weeks later, i received another letter, to say that in April of 08 my tax code will change to 124L - until April 09. This started to worry me, because its a dramatic change for no change in circumstances.

I started to query it with the firms accounts company, and they said they had received no instructions to change my code, and that they would investigate it.

Well long story short, and no excuses - nothing else happened - and month in and out until October 08 my tax code continued to be 386L. Suddenly in October my Tax Code changed on my payslip to 65T. I paid nearly £900 that month in Tax. I got on the phone to our accounts firm, and they said they had just been instructed to change it to this. I rang the Tax office, and they said it was a mistake.

However, the Tax office said my Tax Code should have gone up - from 124L to 184L. I did not mention though that up until October, my code had stayed on 386L.

Obviously there's been a massive !!!! up. I'm trying to work out now if i owe crap loads of tax, or if Ive somehow paid it off - or what. Is it my fault for not checking in to the code not changing on my payslip sooner? can i argue to my firms accounts department for not investigating it - or updating it (they say they never received any notifications to change the code - but i did).

Could it all be a balls up with the Tax office? as my financial situation has not changed in over 3 years, i.e no significant pay-rise, change of car or home etc.

Any advice, laughter, tears for me?

Cheers

CLAPTON

at this stage I would have thought your first priority is to understand what your tax code should be .... what are the value of your benefits in kind ...what does your annual statement P11 say?

System

HMRC issue tax codes and to do so they use a Coding Assistant which takes account of previous tax codes which have been issued.

If your employer failed to use a tax code which you received notification of and HMRC subsequently changed the code again then you end up paying a huge amount of tax. If you had told HMRC that your employer wasn't using the code then they could have reissued it.

You need HMRC to review the last tax year to see if you over or underpaid tax. If it is a significant underpayment you can ask for it to be recovered over more than 1 year. It's too late to do anything about the £900 tax you paid but you also need HMRC to check what your tax code should be now and reissue it if necessary.

mtem74

What you also need to know is whether or not the codings were issued to your employer and if so why they did not operate them.

Merlin_Accounts

In my many years experience of operating payrolls on behalf of employers I regret to say that on more than a few occassions notices of coding issued to employees were never issued to the employer (and an employer cannot operate a tax code without the notice from the tax man - well apart from when they get a P45/P46 from the employee).

johnllew

Merlin_Accounts wrote: »

on more than a few occassions notices of coding issued to employees were never issued to the employer.

Or they got lost in the post OR the employer mislaid them?