Tax underpayment advice

smilelols

Hello
I've received a P800 notification for the tax year 2008-2009. I have tried to contact and discuss with the tax office and wasnt able to make any sense (to be honest the person I spoke to wasnt very helpful).

This is my understanding of the situation. I am employed full time and my employers use the PAYE system. In that year I changed employers, but completed all neccessary tax forms informing everyone of my change of employer (there were no over laps of employment, I simply moved from one job to the next).

Given that the tax office was given all the correct information (as far as I am aware), and that the tax office werent able/willing to explain how this situation occured.

Can i challenge this tax demand? If so, how?

Nb - before anyone tells me I should pay etc, I would have no objection if I had done something to cause this situation, but I cant see what I could have done different.

Thanks in advance

System

Ring them back and ask them how the total pay and tax were made up ie: get them to break it down to the individual employers. Then you can compare them with the P60's and P45's you have to see if either something is missing or something has been included which shouldn't be there.

Failing that your other options are to put your request in writing or make an appointment at your local enquiry centre (EC)- http://www.hmrc.gov.uk/enq/main.htm
You can either call in in person or ask the helpline advisor to arrange for your local EC to call you back to make the appointment.

Also this gives further information about when HMRC think you can challenge the P800 - http://www.hmrc.gov.uk/p800/paye-tax-calcs.htm

chrismac1

Good advice from Pam. Post up the details from your P60 and P45s on here, and we'll check the calculations. That's step 1 - because so many of these notices have howler errors in them. Then if the calculation is wrong you can challenge it. If not your options depend on how much it is they are seeking back.

Gertie_Walker

Many of the errors in these cases have occurred because the pay and tax from job 1 have been added to the pay and tax for the whole year. Looking at your P60 may solve this instantly for you. You just need to write to HMRC sending a copy of your P60 and asking them to correct it. Don't waste moeny hanging on the phone.

chrisbur

The fact that you moved from one job to another with no overlap does not always mean that there was no overlap of tax allowance which can cause an underpayment. As others have said full details of P45 and P60 are needed. If you wish to give these details please check the tax basis as well as the tax code. If you were on week 1/ month 1 code on either P45 or P60 there will be an X after the code.

ruthie117

hi there

i have just received my notice! apparently i have underpaid both 2008/09 and 2009/10.

my situation is a bit complicated in that i had 2 differrent jobs in the NHS for most of this period, the total hours for these 2 jobs was equivalent to a full time NHS post and while they were 2 different NHS trusts they both used the same payroll service, which meant the same payroll issued me with 2 separate payslips.

in january 2010 i received a PAYE coding notice to say that my tax code for 2010/11 would be BR.

what i am wondering is wether my payroll service didn't put me on the correct code to begin with and given that my code was altered (and sadly i didnt know then the Tax system was so error ridden!) whether this means that HMRC failed to place me on the correct tax code earlier.

any thoughts?

smilelols

Hi all
Many thanks for your replies, I thought I would give you an update and see if any of you have any further advice.

I've had 2 conversations with the tax office - following is a summary of the phone conversations

Phone call 1 - Requested they explain how the underpayment occured. I was told there was overlap when I was employed by 2 employers. I explained this was never the case, i moved from one job to another in Oct 2008. I was asked could I prove the the tax office was told, if so they would not collect the underpayment as it was over 12 months ago. I ask what info they needed and was told anything that could show the tax office was told about my new employment.

I ring off, and give personal/payroll a call. Yes, they say we notified tax office with your P60 in Oct 2008.

Phone call no 2 - Speak to a different person and explain content of call no 1 and give them the evidence that person no 1 said was required. I was then told the following: -
Yes, they recieved notification of my new employment in Oct 2008. They then said they notified my employer of a new tax code, which my employer didnt apply (no one notified me!). This caused the underpayment. Tax office said they discovered this in April 2009 when all the records were collected at the end of the fianancial year. Therefore I am liaible for the underpayment.
I said I wasnt happy about this because of the following reasons - I had made sure the correct information went into the system, no one informed me anything had changed. My employer was notified of a change of tax code and didnt apply the new code to my wages (why they didnt I dont know, and no one can seem to tell me!). Then to top it off the tax office waits 18 months to inform there is a problem.
Chappy on the phone says it is my problem, that I should have realised my tax code would have had changed (wasnt able to clearly explain to me how I should now given the complexity of the system and the fact no one had actually told me, so I could have rectified the issue sooner). He also stated that according to the tax office they havent waited 18 months, they've done it within a tax year. This is because, they found the problem in April 2009, that tax year goes to 2010 and that's where we are now.
Perhaps someone here can help me understand that, because as far as I was aware the tax year would have finished in April 2010, and we are now in 2010-2011 tax year.

Does anyone have any suggestions or advice, as I feel like I'm going round in circles!!

Many thanks in advance

suso

smilelols wrote: »

Hi all
Many thanks for your replies, I thought I would give you an update and see if any of you have any further advice.

I've had 2 conversations with the tax office - following is a summary of the phone conversations

Phone call 1 - Requested they explain how the underpayment occured. I was told there was overlap when I was employed by 2 employers. I explained this was never the case, i moved from one job to another in Oct 2008. I was asked could I prove the the tax office was told, if so they would not collect the underpayment as it was over 12 months ago. I ask what info they needed and was told anything that could show the tax office was told about my new employment.

I ring off, and give personal/payroll a call. Yes, they say we notified tax office with your P60 in Oct 2008.

Phone call no 2 - Speak to a different person and explain content of call no 1 and give them the evidence that person no 1 said was required. I was then told the following: -
Yes, they recieved notification of my new employment in Oct 2008. They then said they notified my employer of a new tax code, which my employer didnt apply (no one notified me!). This caused the underpayment. Tax office said they discovered this in April 2009 when all the records were collected at the end of the fianancial year. Therefore I am liaible for the underpayment.
I said I wasnt happy about this because of the following reasons - I had made sure the correct information went into the system, no one informed me anything had changed. My employer was notified of a change of tax code and didnt apply the new code to my wages (why they didnt I dont know, and no one can seem to tell me!). Then to top it off the tax office waits 18 months to inform there is a problem.
Chappy on the phone says it is my problem, that I should have realised my tax code would have had changed (wasnt able to clearly explain to me how I should now given the complexity of the system and the fact no one had actually told me, so I could have rectified the issue sooner). He also stated that according to the tax office they havent waited 18 months, they've done it within a tax year. This is because, they found the problem in April 2009, that tax year goes to 2010 and that's where we are now.
Perhaps someone here can help me understand that, because as far as I was aware the tax year would have finished in April 2010, and we are now in 2010-2011 tax year.

Does anyone have any suggestions or advice, as I feel like I'm going round in circles!!

Many thanks in advance

what tax codes were used by both employers?

As has been explained before, even though you might only have one job at a time, it doesn't mean that allowances weren't duplicated especially if you receive a payment after you leave.

Regarding the P60 in october, whoever you spoke to has mixed up their forms, I don't know whether you spoke to the first or second employer, but the main forms involved for individuals are as follows,

P45 - issued when you leave employment, used issued after the last payment has been made.
P46 - New starter form when you do not have a P45 from your previous employment
P60 - issued by any employer that employs you on the last day of the tax year, (April 5th) never issued in October.

HMRC issued a new code to your employer, it wasn't used by them, HMRC would not know this until after the end of the tax year, approx May 2009 when they received the P14 (their version of the P60)

HMRC have one year from the end of the tax year in which they receive information in which to act with it.
They received the information in the tax year 2009/10, they have until April 5th 2011 in which to notify you of the underpayment and how they are proposing to collect it.

They are within their timescales on this.

Mikeyorks

smilelols wrote: »

Does anyone have any suggestions or advice, as I feel like I'm going round in circles!!

Yes - post the details of your P45 (pay / tax / Code) and P60 for 08-09 ............ as earlier suggested?

Yes, they say we notified tax office with your P60 in Oct 2008.

........ No. A P60 is only issued to you - from an employer you are with at 5th April. P45 mentioned perhaps?

smilelols

Many thanks for your replies
Sorry, I was getting confused with the names for the forms!

Thanks for explaining about the tax years and the tax office's time scales (if only chappie no 2 explained it that way to be on the phone - although still confused why tax chappie in phone call no 1 didnt tell me what no 2 chappie then told me - more circles lol)

Basically what they have said it that employer no 1 used x amount of my tax free allowance when I worked for them. When I moved to employer no 2, the tax office issued them with a new tax code, taking into account the what monies I had left in my tax free allowance. However employer no 2 didnt action this tax code and used one, which should have been used if I worked there for the whole tax year.

This is where my next question then comes: - am i still responsible, if the tax office issue a new code (due to the above) and notified my employer (and not me), and then my employer (for whatever reason) doesnt action this?

I dont mind (well i'd be a bit annoyed with myself, but would live with it), if this underpayment occured, because or something I had done, or if I had been told about the change in tax code but hadnt followed it up. However, as it stands (in my understanding), the tax office and my employer have communicated, a decision was made, and then someone else hasnt done what I percieve to be there job. I'm going to go through all my old payslips (just need to find them in the bottom of a box), to see if the tax code was the same - but my understanding from what tax chappie no 2 said to me, is that employer no 2 continued to use the same tax code as employer no 1, despite them being told not to.

Mikeyorks

smilelols wrote: »

Basically what they have said it that employer no 1 used x amount of my tax free allowance when I worked for them. When I moved to employer no 2, the tax office issued them with a new tax code, taking into account the what monies I had left in my tax free allowance. However employer no 2 didnt action this tax code and used one, which should have been used if I worked there for the whole tax year.

The only time that would make sense is if you didn't have a P45 - or chose not to use it in order your new employer didn't know your previous pay?

There is a continuity document which is used in order to make sure you pay the right amount of tax when moving jobs - and that's the P45. It contains the Code number (as tax is usually cumulative - the same Code number applies to both old and new jobs. With few exceptions) / gross pay / tax deducted / should Student Loan be deducted etc.

If you don't post the detail of that P45 - and the 08-09 P60 ........... then you're asking us to use a crystal ball none of us have.