Tax Help Needed

YumYum

I recently contacted the Inland Revenue as I had overpaid tax during the 2009-2010 financial year. I was working two jobs from April to August and left both at the end of August to go to university to train as a teacher. I was on tax code 647L on my main job and BR on my second. They have agreed that I am due a refund and said I should receive a cheque in the post.

I had a missed called from them a day later and gave them a call back. Turns out that they didn't have any information from my 2nd employer for the tax year before (2008-2009) and wanted me to send in either a P60 or P45 as they thought that I could well be due a refund for that year too. I had a play about on listentotaxman.com as I didn't think I would be and according to the site i've underpaid tax that year but I don't think i'm at fault.

Basically, my 2nd job was my main job that year (I was doing a master's degree) until the September when I started a new job that I was going to be getting paid a lot more for. I checked the IR website and found out the tax information and regulations about a second job. I decided that I wanted the personal allowance swapped over to my new job as there was no way i'd use it all up in my original job that was to become my 2nd but would in my new job. I rang up the IR and explained that I was starting a new job and could my current main job be changed over as a second job and the remainder of my personal allowance transferred over to my new job which would now be classed as my first. They agreed and once I started my new job, I was given the tax code 603L and my other job was changed from 603L to BR MT1. However, looking at it now, although I was paying the correct amount of tax on my second job (during the time it was my first and then my second), my main job was given the full personal allowance (£6045) instead of what was left over from the time my 2nd was my main. I didn't realise until now as I only checked at the time that I was in the jobs to make sure that I was on the right tax codes (which I was).

Am I going to get asked to repay the amount that I seem to have underpaid for that year? And if so, do I have any right to complain and refuse to pay? I reckon it's about £160 that i've underpaid. I'm a bit annoyed as if they do ask me to, I did originally ring up and explain the situation right after I started the new job and was put on the correct tax codes so it's not my fault they've transferred over the full personal allowance amount after knowing i'd already used up some of it for that year. Help!!!

chrismac1

Have a look at Extra Statutory Concession 19. Providing you have the evidence that you've pro-activley told them about the second job, in my view they have nowhere to run on this one.

YumYum

Thanks for the reply! Will look up the concession now

dori2o

chrismac1 wrote: »

Have a look at Extra Statutory Concession 19. Providing you have the evidence that you've pro-activley told them about the second job, in my view they have nowhere to run on this one.

How can you say this without first finding out the facts.

First of all it would be entirely correct for the tax code from job 1 to change from 603L to BR as per the request. It would also be correct for job 2 to change from BR to 603L- assuming- the 603L code was issued on a wk1/mth1 basis.

OP.

First of all you need to allow HMRC to do the assessment because until then you cannot accept or disagree with anything.

Once the assessment has been completed, assuming you are underpaid, you need to ask on what basis was the 603L code issued to the 2nd employer. If it was issued on a wk1/mth1 basis by HMRC, but not operated this way by the employer, it is not the responsibility of HMRC, it is a fault with the employer and therefore Revenue Error would not apply as HMRC had done everything necessary.

If however the 603L code was issued on a cumulative basis, then tell HMRC you would like to claim revenue error under ESC A19 as you have provided information but this has not been acted on correctly.

chrismac1

I've read the post more carefully - it was a long one after all. I'd be tempted to just do nothing and see what happens. They're an utter shambles at the moment and there must be a fair chance you never hear anything more of it. If you do, you now have ESC 19 in your armoury!

suso

chrismac1 wrote: »

I've read the post more carefully - it was a long one after all. I'd be tempted to just do nothing and see what happens. They're an utter shambles at the moment and there must be a fair chance you never hear anything more of it. If you do, you now have ESC 19 in your armoury!

I would be tempted to ignore this cretins advice.

HMRC have done the calculation and sent you advice of the underpaid tax.

Because it is a large amount they will send you a bill with 60 days to pay. If you ignore it then you will be put into self assessment and the the penalties/surcharges/interest will astound you.

There is no chance that you will never hear from this again. but there is a very good chance that chrismac will not be able to justify his advice.

jimmo

Unfortunately, doing nothing is not really an option because HMRC are holding on to the 2009/10 overpayment until they get the information needed to review 2008/09.
If the 2009/10 overpayment is more than the £160 you think you owe for 2008/09 you will have to take it on the chin in the first instance because they will recover the £160 from your overpayment and only pay you the balance.
Only then will you be able to under the Extra Statutory Concession. Incidentally it is A19, not 19 but here is a link
http://www.hmrc.gov.uk/esc/esc.htm
When and if you get to this stage you will need to be particularly careful.
It will be very important to identify when things went wrong. The natural assumption may be that HMRC made the mistake of issuing code 603L on a normal (or cumulative) basis to your newly designated main employment.
However, as Dori20 points out, the correct procedure would have been to issue code 603L on a week 1 or month 1 basis.
Your phone calls to HMRC have all been recorded and they can be traced but there really should be pretty good evidence on their system of exactly which code was issued.
All that is terribly important because, if HMRC made a mistake and issued the wrong code, they did so at a specific point in time during the tax year 2008/09. Under the terms of the Extra Statutory Concession they needed to correct their mistake within 12 months of the end of that tax year. That is by 5 April 2010.
If they issued the correct code but your employer messed up, the first time that HMRC received information on that will have been at some time in the tax year 2009/10 when your employer’s end of year Return for 2008/09 was submitted.
In that case if HMRC take action before 5 April 2011 (which they have) the Extra statutory concession cannot apply and you will have to accept the underpayment.
A bit of a mixed bag, I am afraid, but I hope I have illustrated the sort of red tape you could be getting into.

mfwhite24

hello
can someone on here tell me exactly what the tax code 647lx is ?? is it emergency or not what do i do about it if it is ?? i been on it since i mangaged to get another job after who i worked for went into admin so i never had a p45 to give my new employer this was back in the summer now so can someone help me
thank you

mark

Lokolo

mfwhite24 wrote: »

hello
can someone on here tell me exactly what the tax code 647lx is ?? is it emergency or not what do i do about it if it is ?? i been on it since i mangaged to get another job after who i worked for went into admin so i never had a p45 to give my new employer this was back in the summer now so can someone help me
thank you

mark

https://forums.moneysavingexpert.com/discussion/comment/31125347#Comment_31125347

See this thread.

YumYum

Thanks for all the advice! I assume that they're not aware of the underpayment yet as according to them my employer from the 2nd job hasn't sent them the information for that tax year and I have not yet posted off my P60 yet (it all happened late this week and i'll be posting it off next week once I receive a letter from the IR to double check that i'm sending the right documents to the right address!). The overpayment is around £400 so it's over double the underpayment. I don't have any issue with paying tax, it's just irritating to feel like I might end up getting penalised later down the line for someone else's mistake when I did everything I could to inform them at the time of the change in jobs. I'll try and fight it if it gets to that but i'm not crazy enough to avoid paying the underpayment and then have them slap some penalities and interest on it! Again, thanks for the advice!

dori2o

YumYum wrote: »

Thanks for all the advice! I assume that they're not aware of the underpayment yet as according to them my employer from the 2nd job hasn't sent them the information for that tax year and I have not yet posted off my P60 yet (it all happened late this week and i'll be posting it off next week once I receive a letter from the IR to double check that i'm sending the right documents to the right address!). The overpayment is around £400 so it's over double the underpayment. I don't have any issue with paying tax, it's just irritating to feel like I might end up getting penalised later down the line for someone else's mistake when I did everything I could to inform them at the time of the change in jobs. I'll try and fight it if it gets to that but i'm not crazy enough to avoid paying the underpayment and then have them slap some penalities and interest on it! Again, thanks for the advice!

If it is HMRC's mistake you will not be penalised for it. If it is clear that it is HMRC's mistake then ESC A19 will apply and the underpayment will be written off.

Best thing to do is send the information HMRC have requested and see what the final outcome is. At that point if there is an underpayment for 08/09, call them and ask if the code issued to the 2nd employer was issued on a week1 basis or cumulative. If it was issued cumulative, as long as you did not ask for this, then tell them you want to claim revenue error.

If it is not revenue error and it is due to your employer not operating the correct code, then this is something you will need to discuss with them.