I cannot understand the taxman's logic!

vet8

For ages (about 15 years) I have had two part time jobs. I used to fill in a paper tax return every year saying what I earned and pay any tax I owed. Then the tax office stopped sending me a tax return. For several years it did not matter as I owed no tax, but three years ago I realised I had not paid enough. I have not had a coding notice for years and years and both employers use the standard tax code (the normal personal allowance one) so when I add together the salaries I get I owe more tax.

Two tears ago I filled in an on line tax return and I owed £450 which I paid. Last year they sent me a letter asking me to fill in the on line tax return which I did and I owed £430 which I paid.

Now they have written to me saying they will not be sending me a tax return any more and I do not need to fill one in. Eh?? Since I do two jobs and have owed tax for the past two years surely I am a likely candidate for a tax return. I have not had a notice of coding again, even though my husband got his 2 months ago. Even if they send me a new tax code which woud deal with the situation from this April there is still this current tax year and I am certain to owe tax at the end of it. The letter said I must inform them if my circumstances change or if I start to earn more money, well I have done that already and they think I don't need a tax return!

My husband who does one job, pays P.A.Y.E. and has no additional sources of income gets a return every year. It takes me about 5 minutes to fill it in, it is so straightforward. Last year he owed £1.46 in tax and two years ago 82p yet he gets a return every year.

I am tempted to not fill in a return and just pocket the money I owe, but I think I would never get away with that. I know that having two jobs screws their system, but surely it is quite common these days. I just cannot understand why they think I do not need a return.

Frugaldom

Not sure if this will be of any help but my main job is in self-employment but I also had a second part time job in which I was employed. I contacted the tax office about this and it appeared that the second job was being taxed at source as a 'second' job, meaning I paid tax on everything earned without taking the personal allowance into consideration. Check both P60s and you might be able to tell by your tax codes. They should total 6035 (6475 for 2009/10). If you aren't earning over that amount then there won't be any income tax to pay. Apologies if this isn't relevant to what you meant

System

If you are under 65 and your income is solely PAYE income and under £100,000 per year then you should not be completing a tax return. However it sounds to me as if you need to contact your tax office to clarify your tax codes at each job as your codes should be enough to collect all taxes due.

vet8

Several years ago I did have different tax codes for each job which meant I paid enough, but then (I cannot remember why now) it changed and I got one code only. I do not want a BR code as neither job earns over the personal allowance so with a BR I would pay too much on one job. Both tax codes are currently 6035.

What gets me about this is that both employers fill in a P14 every year for me and I assumed the tax office checked these and saw that ABC was working at firm X. It appears they do not check them at all.

There was one year when I realised I owed £96 in tax and paid that through one of the jobs. At the end of the year the tax office sent me £96 back as overpaid tax!!

System

You need to decide which one pays you the most and ask for that to be classed as your main source of income. HMRC can then adjust your codes so that any personal allowance not used up at your main source can be allocated to your second source. That would limit the chance of over or underpaying tax.

P14's are generally submitted online now and no human looks at them - that's the main problem. HMRC would eventually catch on to the fact that a taxpayer has paid too little or too much tax but that could be a couple of years down the line. That's why it is always best to tell them everything.

Even though you completed tax returns that was no guarantee that your codes would be sorted. Hopefully this should not happen as much in the future as HMRC should be implementing a new computer system which will tie PAYE and SA together. We will just have to wait and see how that turns out :rolleyes:

Mikeyorks

vet8 wrote: »

Both tax codes are currently 6035.

Which, clearly, is wrong - and is always going to cause problems if your total income exceeds £6035.

So - as post #3 - you need to contact them and ensure they link the two employments. They can then proportion the PA, through 2 correct codes, to ensure you pay the right amount of tax - automatically - without need of a Return each year

vet8

Pam17 wrote: »

If you are under 65 and your income is solely PAYE income and under £100,000 per year then you should not be completing a tax return. However it sounds to me as if you need to contact your tax office to clarify your tax codes at each job as your codes should be enough to collect all taxes due.

Thank you for your replies, they were very helpful. I still have two queries. Firstly, seeing what Pam17 says above why does my husband get a tax return every year for the last 30 years, he certainly does not earn £100,000. I wish he did.

Secondly, I understand about letting the taxman know about my 2 jobs, but surely after all these years they should know about them already! It makes me wonder what we pay our taxes for. I have never tried to hide the fact I do 2 jobs and yet they still do not seem to realise it. I have to say that the HMRC seem pretty useless. (Apologies to any tax workers) It is hardly surprising that so much tax goes uncollected if they cannot take tax when I have told them for 15 years that I owe it.

mrsmyagi

First query - you're right, I don't really see that he should get a tax return to be honest. I would ring them and query it.

Second query - you're right again, they are pretty useless on the whole :-)