Six million people have underpaid or overpaid tax

SherlockFan85

Hello All,

I received a letter yesterday saying that I owe £563.55 to HMRC for 2008/09. I accept it and have spoken to a nice man on the phone about it. Turns out that Woolworths have come back from the grave to haunt me again! :eek:

I was paid £1000 redundancy on the last pay packet from Woolies as our store managed to sell everything, even the shelves, and at the time I didn't notice that I hadn't been taxed on this. I was a weekend worker (had a full time job also) and so Woolies had me on a certain code which was fine on most other months, as my pay from them was very low, no more than £100 or so a month. However, this final large sum was unexpected and Woolies in their panic did not change any codes to fit the new sums. And we, in our collective misery, didn't notice at the time, duh. I doubt I'll be the only Woolies veteran with this issue.

It's just a real shame that now I have to pay back more than half of the Woolies redunancy money because they failed to change the code towards the end. Oh well, I suppose they had bigger fish to fry, and I should've checked it, but at least I did the clever thing and popped all the money in an ISA, it's all still there

chrismac1

Ahem...that should not be the reason. The first £30,000 of any redundancy under an approved redundancy scheme - which Woolworths most certainly was - is completely tax-free and can just be left off your tax return rather like an ISA.

So i suggest you post up the p45 details on here and we'll see if this is another blunder from the HMRC stables.

sofa_bean

Hello

Today my husband received notification that he has, over the last two years, underpaid his PAYE by a total of £1404.20.

We are currently on a Debt Management Plan and I am panicking about how we will be able to pay back any underpayment and still maintain our monthly DMP payments.

If anyone can give us any advice on how to deal with this it would be much appreciated...

sofa_bean

Eyeballs99

The question i'd like to know is how long will it take to let everyone know their own situation.

I'm guessing the letters have started to flow out now.

chrismac1

sofa_bean

As with other posts in this thread, put up the details and we'll identify if this is an HMRC blunder or not. If it isn't there is a Time to Pay system which is supposedly designed for your sort of case, in any case if this is valid and he's still on PAYE it should be collected over one or two tax years and not all at once.

sofa_bean

Thanks for the speedy response!

Here, I think, is the information you asked for:

Main job Tax Year to 5 April 2009 (P60):
taxable gross - £15979.72 tax paid - £1988.00 tax code - 603L
Pension from former employer to 5 April 2009 (no P60 has ever been sent for this pension but the 'Advice of Payment' states):
taxable gross - £3431.01 tax code - 543L
No tax is taken from this pension, my husband originally arranged when he started his current main job in 2000 that the tax would all be taken from his wages.

Main job Tax Year to 5 April 2010 (P60):
taxable gross - £15923.71 tax paid - £1888.00 tax code - 647L
Pension from former employer to 5 April 2010 (no P60 has ever been sent for this pension but the 'Advice of Payment' states):
taxable gross - £3602.56 tax code - 647L

The forms from HRMC have his PAYE Income for Tax Year 2008-2009 as £19401 (tax paid - £1988) Tax underpaid - £685.20
PAYE Income for Tax Year 2009-2010 as £19514 (tax paid - £1888) Total of Tax underpaid £1404.20

It looks to us that his pension for some reason hasn't been counted as income for these two tax years which is how the underpayment has happened.

Many thanks

sofa_bean

glider3560

sofa_bean wrote: »

Thanks for the speedy response!

Here, I think, is the information you asked for:

Main job Tax Year to 5 April 2009 (P60):
taxable gross - £15979.72 tax paid - £1988.00 tax code - 603L
Pension from former employer to 5 April 2009 (no P60 has ever been sent for this pension but the 'Advice of Payment' states):
taxable gross - £3431.01 tax code - 543L
No tax is taken from this pension, my husband originally arranged when he started his current main job in 2000 that the tax would all be taken from his wages.

Main job Tax Year to 5 April 2010 (P60):
taxable gross - £15923.71 tax paid - £1888.00 tax code - 647L
Pension from former employer to 5 April 2010 (no P60 has ever been sent for this pension but the 'Advice of Payment' states):
taxable gross - £3602.56 tax code - 647L

The forms from HRMC have his PAYE Income for Tax Year 2008-2009 as £19401 (tax paid - £1988) Tax underpaid - £685.20
PAYE Income for Tax Year 2009-2010 as £19514 (tax paid - £1888) Total of Tax underpaid £1404.20

It looks to us that his pension for some reason hasn't been counted as income for these two tax years which is how the underpayment has happened.

Many thanks

sofa_bean

The 08/09 underpayment is correct. What should've happened is that the salary stays on 603L and the pension on BR (i.e. all taxed). You've effectively received a tax free allowance twice in that year.

The 09/10 figure looks like they've added up the 08/09 and the 09/10 underpayment? Is this correct?

sofa_bean

Yes glider, the figure of £1404.20 is the 08/09 underpayment of £685.20 PLUS the 09/10 underpayment.

glider3560

sofa_bean wrote: »

Yes glider, the figure of £1404.20 is the 08/09 underpayment of £685.20 PLUS the 09/10 underpayment.

In which case, the figures seem correct.

Best thing to do is speak to HMRC and see what repayment plans they can come up with.

chrismac1

You've underpaid tax by 681 in 08-09 and by 720 in 09-10 by my calculations. So 1,401 over both tax years. Firstly, stop the bleeding and make sure his pension gets a BR code for 2010-11. Then I'd say you can justify asking for this tax back over 2 tax years via his PAYE code - so in effect he'll get just 1,000 or so tax-free allowances to make up for his "double dip". After all, HMRC have had all the information needed to get this right and have failed to do it. They would counter by saying that your husband should have worked out he was getting too many allowances.