Tax Codes

nuttynat29

Hi there,
I think I could really do with some help/advice.

For the second time in 5 years, the HMRC have written to me to say I havent paid enough tax approximately 3 years ago...I contacted them and they explained in a less than sympathetic way that it was down to the company I worked for at the time submitting my P45 late, despite me ensuring it was with the accounts department within 4 weeks of leaving my previous job and well within the submission time ( I started job in October 06 & they didnt submit until Feb 07, according to their records).

Now because of this error, I am being forced to take a reduction in the amount of tax I can earn in a year, when I have only just managed to bring it back up to the normal rate of 603 after the same thing happened to me in 2003/2004. I ended up having to pay this back over 2 years and had no alternative but to have my tax code reduced to around 432.

I am due to go on maternity leave in August 09 and so contacted HMRC at the beginning of the year to ensure eveyrthing was back to normal with my tax code as it had been as low as 303 at one point. I was assured it had all been rectified. I am now being made to accept this will reduce to 432 for the tax year 2009/2010 when my maternity will kick in, and will be receiving a whole lot less in my wages before this happens. I am not rich by any means and have finally managed to bring my debt under control. This will be a real blow and I will struggle. I also have no idea where to start with tax credits and whether this code will have any affect on them.

I have no idea where I stand with this tax code reduction, whether I can appeal or whether my previous employer is liable etc? Your help would be much appreciated.

Many thanks
nuttynat29

sarflee

I'm not totally understanding how you have underpaid tax. Is it due to the full amount of previous years underpayments still not collected?

The reason for handing your P45 to your next employer is so they can use previous pay and tax details. If they don't have these details they should use and emergency tax code, allowing full personal allowances on a weekly/monthly basis. This should ensure that you don't underpay tax unless:

1. You are given two lots of allowances for one week/month, due to finishing with one company and starting another in the same month.
2. There was a reduction in your personal allowances for any reason.

nuttynat29

I had no reductions. All I can think is that I was with an agency for 6 months prior to the October & was paid weekly.
I dont understand it either. I am very honest when it comes to tax etc & I have always, always ensured I submitted the correct information & P45 on time to new employers.
The first time it happened, I was notified in 2006 & it was referring to tax year 03/04. I was given no explanation. Now I feel as though I am being stung again, and this time I have a reason.

sarflee

OK.
How much is the underpayment?
Usually agency jobs use an emergency week one code, ie for tax year ended 5/4/07 I think it would have been 522L X. Is this the code they used?
Was the leaving date on your P45 from the agency after the start date of your new job and was the agency job the only job you had since the start of the tax year?

It was probably no ones fault as such.

nuttynat29

The underpayment is approx £300 which has been offet by a credit they owed me for medical benefits I have been paying but never received.
Anyway, I started with the agency on 22 May 06 and was with them until 13 Oct 06, starting my new job on 16 Oct 06. I was with this company until made redundant in July 08.
I cannot recall my tax code but 522 sounds about right, although it may have been slightly lower because of the underpayment in 03/04. I recall the figure 432L.
Leaving date from agency was 13/10/06 and start date at company was 16/10/06 however I didnt receive P45 for about 2 weeks as I was paid in leiu from agency. It came with my final weeks pay around 27/10/06.
Sorry to sound a little vague. I dont have the exact info to hand.

jennifernil

an underpayment of £300 tax does not seem to correspond with the code numbers you give.

if you do have £300 to repay from an earlier year, that will reduce your take home pay by £25 per month

nuttynat29

But this is precisely my issue...I have given all the info that I was told from HMRC, All they would say is that I have an underpayment of £300 give or take the pence, and when pressed for a reason they said it was down to my employer not submitting my P45 in time to them.
They also went on to say I am meant to sent my P60 to them but I have always been under the impression, given that I am employed, that this is something submitted to me.