Underpaid Tax Letter - V confused!

charlamine

Hi All

Looking for some advice...

My husband recieved an underpaid tax letter yesterday stating he owes just over a grand for the tax year 2008-09 and that this will be taken over the tax year 2011-12 (starting in April)

This was completely out of the blue and caused a bit of a panic - I had a dig around in my paperwork folder and managed to find (luckily!) the P60 for that tax year and the information stated is as follows

Pay in this employment - £31872 - this matches the HMRC understanding of his earnings

Tax Deducted - 5166.40 - this does not match HMRC - they are saying only £3842 has been paid.

I am just really confused as to how the P60 can say my husband has paid £5166.40 in tax (which is 60p off of what HMRC say he should have paid for the year) but HMRC say he only has paid £3842?

My husband has worked for the same employer for the past 3 years - although in early 2009 he did change roles within the company - although this did not come with a pay increase but a pay decrease.

I just really don't know where we stand now??....

Pennywise

Your OH needs to phone the tax office and tell them about the figures on his P60. It sounds as if HMRC have messed up again here. In our accountancy practice, we're seeing well over 50% of these underpayments being wrong. Hopefully if the person you speak to is one of the better call operators, they'll be able to check your records on screen, realise whatever error they've made and correct it and you'll hear no more!

charlamine

Thanks Pennywise

He has called them up

He explained about the discrepency and they said no your figure for 2009-10 was £5166 - when we reiterated that the P60 was 2008-09 year he said they they sounded really suprised that he had a P60 from that long ago! Which makes me wonder.....(although at least we know not to expect another one for 2009-10!)

They are still saying that on their system it states that the income tax paid was £3842 and they have asked for us to send in the original P60 and ask them for a recalculation..

Hopefully this will all go away after their recaculation but it is slightly worrying that the issue in the first place that has made the underpayment/overpayment issue has been because of system error and it appears that they still cannot get things right on their system even now!

Johnhowell

Take copies of the P60 before sending it through to HMRC. In the covering letter state clearly that you expect the original P60 to be returned as soon as the re-calculation is done.

I once had to send in my P60, after 6 months I asked for it back. I received a letter stating that the P60 could not be located and outlined some of the numbers that had appeared on the P60 - but not all the numbers as I cross checked with a photocopy!

Anyway, about two weeks later an envelope arrived with the original P60 and no covering letter!

Good luck,
John

Tarasam

charlamine wrote: »

Thanks Pennywise

He has called them up

He explained about the discrepency and they said no your figure for 2009-10 was £5166 - when we reiterated that the P60 was 2008-09 year he said they they sounded really suprised that he had a P60 from that long ago! Which makes me wonder.....(although at least we know not to expect another one for 2009-10!)

They are still saying that on their system it states that the income tax paid was £3842 and they have asked for us to send in the original P60 and ask them for a recalculation..

Hopefully this will all go away after their recaculation but it is slightly worrying that the issue in the first place that has made the underpayment/overpayment issue has been because of system error and it appears that they still cannot get things right on their system even now!

They cant just take and amend P60 figs over the phone, they need to have sight of them and the easiest way to do this is for you to send them in. They werent going to start collecting this underpayment until April 2011 so theres plenty of time to get it sorted. I would mention that the post turnaround is approx 3 months at the mo so dont expect any movement quickly. Just make sure you photocopy the P60 before you send them the original, just incase.

Just to add the original error may not be HMRC's, in my opinion (I work for HMRC) a lot of these errors are coming from incorrect details sent in by employers or the employers using the wrong tax code (I've seen instances where HMRC have not issued the tax code used by the employer that has caused the underpayment.)

charlamine

P60 sent off and I have taken copies as well - I did not think to mention about getting the original back but will call them in a week or so to make sure they have recieved it so will call them then.

Kellyshay> they did say that the turnaround would be slow and to call back in a month if we had not heard anything.

I don't really understand how his employer can be using the incorrect code when the amount that is stated he has paid on his P60 is the amount he should have paid according to HMRC surely if he had been on the wrong tax code then his tax would have been way off what HMRC were expecting not bang-on?

It has been a massive learning curve though - I just assumed that if you were employed all of this was taken care of for you and there would never be an issue - i.e. same salary for the same period for the same employer the tax code worked out would be the same tax code used throughout the year to ensure that you were all up to date with HMRC - how wrong was I! I never ever check the tax part of my payslip - I will certainly be doing so from now on.

Tarasam

I would give it longer than a month, the current turnaround is at least 12 weeks, plus if you call to check receipt you'll get nowhere, basically we dont log the post as received until we deal with it, theres just not the staff to be able to log everything that comes in.

Mikeyorks

charlamine wrote: »

I don't really understand how his employer can be using the incorrect code when the amount that is stated he has paid on his P60 is the amount he should have paid according to HMRC

Tend to agree with you. If he changed roles within the organisation during the year - it sounds more that they have reported the tax deducted just to / or from the date he changed. But - that doesn't explain how they managed to get the P60 right?

But instinct suggests this is more the employer than HMRC ..... but the P60 should sort it. (You must keep these ....... as you now appreciate! As these reconciliations will now be an annual event)

Tarasam

kellyshay wrote: »

Just to add the original error may not be HMRC's, in my opinion (I work for HMRC) a lot of these errors are coming from incorrect details sent in by employers or the employers using the wrong tax code (I've seen instances where HMRC have not issued the tax code used by the employer that has caused the underpayment.)

Sorry to confuse matters this was generalisation of some of the issues occuring at the mo.