Underpaid tax...again

Mikeyorks

montezumas wrote: »

. I trusted that my employer would do whatever was necessary.

Your employer can only do that if they receive a change of code? In the first instance where your circumstances change, it's normally down to you to advise HMRC and ensure that happens. In particular with a (State?) pension which is external to your employer. You would normally complete a P161 to provoke such a code change. Has that been done?

If you're paying tax at basic rate (20%) ..... the pension of £136 isn't sufficient to create an underpayment of £4120. Even over 2 years.

If you post the details from your P800s and P60s ..... someone will check there's no obvious errors.

montezumas

Thanks mikeyork. I don't remember if I completed a P161. But I did receive a notice of coding change from the tax people saying they would notify my employer. I waited but nothing happened and I thought ( wrongly as it now turns out ) that something had passed beteween the tax office and my employer and thought no more about it. I have been in full time employment all the while and earned £12648 for year 2008-09 plusstate pension of £6750 personal allowance of £6035 and a refund? of £1321 therefore 20% tax on £13363 of £2672. Year 2009-10 earned 10425 plus state pension of £7089 and personal allowance of £6475 and refund? of £789 therfore 20% tax 0n £11039 of £2769. Details of 2008-9 p60 as follows Earnings at LEL 4680 , Above LEL 780, Above ET 7188. And figures for pay and tax of £1321 are same as on P800. Sadly can't find this years P60 but will keep looking or get copy from employer.

Dartmoor1

johnwestray wrote: »

hi.
I'm in exactly the same position.Underpaid by £2500. hmrc blame xafinity for not requesting tax codes.Sending letter off tomorrow to hmrc . See what happens soon.

I'm in the same situation - £2500 underpaid due to wrong tax deducted by Xafinity. My pension (ex Royal Navy) is about £9500, but i've only been taxed on about 3000 of it (@20%) on 08-9 and 09-10 after the personal allowance was deducted. Problem is, it seems the personal allowance was also taken into account for my salary, effectively doubling my personal allowance. How has this happened though? Surely HMRC chose either my pension or salary to apply the personal allowance to, not allow it for both? I'm not sure who to write to now - HMRC as they knew of my pension and salary income at all times, or Xafinity for not deducting the correct level of tax (I don't know if HMRC gave them the right information in the first place)?

I know of 3 other people, all ex RN and receiving a pension from Xafinity, who are in the same situation - owing about £2-3000 each. One of them (who 'owes' £3000) was told he would have to repay it in 1 payment in the new year, and that it could not be spread over months / years if over £2k! Surely that can't be right?

Mikeyorks

montezumas wrote: »

I have been in full time employment all the while and earned £12648 for year 2008-09 plusstate pension of £6750 personal allowance of £6035 and a refund? of £1321 therefore 20% tax on £13363 of £2672. Year 2009-10 earned 10425 plus state pension of £7089 and personal allowance of £6475 and refund? of £789 therfore 20% tax 0n £11039 of £2769. Details of 2008-9 p60 as follows Earnings at LEL 4680 , Above LEL 780, Above ET 7188. And figures for pay and tax of £1321 are same as on P800. Sadly can't find this years P60 but will keep looking or get copy from employer.

The easy bit :-

Year 08-09

Total income £12648 + £6750 = £19398 less PA £6035 = £13363 @20% = £2672 tax due

Year 09-10

Total income £10425 + £7089 = £17514 less PA £6475 = £11039 @ 20% = £2207 tax due

So - a total of £4879 due across both years

The difficult bit - I simply can't work out from your post what you have paid in tax??

So I'll make some assumptions. That it is purely the pension which has created the underpayments? That would make £1350 for 08-09 and a further £1417 for 09-10. That's a total underpayment of £2767 ........ which is less than the £4120 you mentioned originally? And I can't reconcile the difference (of £1353)? Nor can I reconcile the tax due figure you mention for 09-10 (£2769) as the figures support £2207?

Final question. On both years you mention 'refund?' as though that is from the P800s. Is that a refund of NI ... you've been continuing to pay past pension age? I would normally expect that to come from the NI office in due course ...... but I can't rationalise 'refund' to your figures for any other circumstances! If it was NI it would be a reasonably large sum of £793 (08-09) and £517 (09-10) ... total £1310.

But - I can't really go further than this without knowing precisely what you actually paid for both years. And - most helpful - exactly what is 'The result' at the bottom of each P800?