Claiming back tax that was overpaid due to incorrect tax coding

sniffer17

A friend of mine is having problems claiming back tax they have overpaid due to their two jobs being logged under incorrect tax codes. She has spoken to the Inland Revenue and keeps being told different things, you need this form, that form etc etc.

Her two jobs were under tax codes 951C8674 and 603L when they should have been under 603L and 543L respectively. To make things more complicated she has now left one of the jobs to be employed elsewhere.

Can anyone give a definitive answer on the process for claiming back tax which was overpaid due to incorrect tax codes?

Thanks in advance to anyone that can help.

sarflee

You only get one lot of allowances each year, currently 6035 (603L). If you have two jobs one would be coded 603L and the other BR. If you didn't use the full allowances at one of the jobs you can ask for your allowances to be split, but under no circumstances would codes 603L at one and 543L at the other be correct.

951C8674 is not a tax code, it looks more like the PAYE reference that employers use for the tax office. I think 543L was the code at the start of this tax year but then it was increased to 603L because of the abolished 10% rate.

I think your friend needs to sort this out as they may actually end up underpaid, but without more info it is difficult to advise properly.

sniffer17

Ok thanks for that.

Without wanting to sound stupid, what does 'allowances' mean (in this context)??

She has definitely been underpaid and is going travelling in May so could really do with the cash before then. According to the last person she spoke to at the tax office this cannot be sorted until the end of the financial year, does that sound feasible?

They said she has to get a form from her old employer (P46/45) and one from her new employer (P60 I think) send those off and she will be refunded. This just doesn't seem like its going to correct the tax code problem though.

fengirl_2

Allowance is the amount of tax free income you can have in a year.
Your friend is being asked to send in her P60 and P45 because we are now at the end of the tax year, so her repayment cannot be sorted out by her employer as would normally be the case.HMRC will need to do the repayment and for this, they need details of her pay and tax from all her jobs during the year.
I agree with sarflee, this looks like an underpayment, rather than an overpayment, based on what you have told us.

sniffer17

Thanks guys, i think i'm getting my head around this now.

Question though, you mean underpayment of tax by her or underpayment of pay to her?

She is positive she is due a refund based on what she was told by the tax office and her old employer. Colleagues at the same agency paid less tax despite their employments being identical.

Will the P60 and P45 forms demonstrate the problem with the tax codes or will she have to do a covering letter to explain?

fengirl_2

The reason we think she has underpaid tax is that you have quoted two c ode numbers which contain the full personal allowance on two jobs simultaneously, whereas you can only have one set of tax free allowances at a time. However, we don't know the full facts of the case, so are only guessing. If you want to post or PM her P45 detaisl and her final paylsip details, we could check this.
She should send the P45 and P60 to the tax office with a covering letter just asking them to check her liability for the year. It would help if she gives a full run-down of of all her employers during the year so that HMRC has a full picture.

sniffer17

Ok I’ve read through all her notes again in the light of your advice and I think the problem is she’s been taxed on the basic rate for her higher paid job and the 603L code is assigned to a job she only works on Sundays. That explains why her colleagues at the main job seem to pick up more, they don’t have a second job so they are on 603L.

She has had her payslip today for her main job and its definitely Basic rate so she’s losing a heck of a lot considering its still relatively low paid.

fengirl_2

That makes perfect sense now! She needs to make sure now however that code 603L has been allocated to her main job from April.

sniffer17

As it stands she is on Basic rate with her new employer, who’s responsibility is it to change that, the employer or the tax office?

fengirl_2

Only the tax office can change it - she needs to give them a ring asap.

sniffer17

Ok I guess that makes sense. Nothing happens when she rings up though, she just gets told to send in forms. At the moment it seems she needs a P45 from the job she’s left and a P46 from the part time job, and somehow this will get the codes swapped over, but I’m not convinced.