Help Needed Inland Revenue say we owe 3.5k

yellowrock

Help!!!

The inland revenue have just been on to my hubby regarding his paye contributions.
My hubby has two part-time jobs, 1 he started in June 2007 the other he started in Jan 2008. The inland revenue say that he has underpaid tax by 3.5k over that period!
His last P60's were 6994 Pay, tax deducted 102.80
10805 Pay, tax deducte 865.20

He has never had two part time jobs before and was not aware the tax was wrong. The inland revenue claim they have sent numerous letters to his employers stating the paye was wrong but nothing to us and this is the first we are aware of it, and now have a massive backlog to pay them.
I am worried sick about how we will manage money wise with the tax increase in his wage and the money we will have deducted in installments we will have to pay each month.
Can anyone give us any advice it would be much appreciated.
thanks

chrismac1

If those figures are for 2009-10 tax year, I get his PAYE tax as 2,264 on total combined gross 17,799. Is that what HMRC have calculated for 09-10? Also, please post up their calculations for the other years. The first step is always to ensure HMRC have got their numbers right, this is very far from being a gimmee!

Murdina

Is your husband also in regular full time employment?

Can you find his payslips or P60s for the years in question and tell us what codes were used for each job? It may be the second and third employers did not ask him to complete form P46 in which case they should have used code BR and HMRC should be directed back to them.

It may be your husband was given form P46 but did not fill it in right.

Mikeyorks

yellowrock wrote: »

1) The inland revenue have just been on to my hubby regarding his paye contributions.

2) The inland revenue claim they have sent numerous letters to his employers stating the paye was wrong but nothing to us and this is the first we are aware of it

1) In what way have they contacted you? Phone / letter / Statement / knock at the door?

2) And how did they add that additional info? As it's not an up-front disclosure they would normally make.

Horseunderwater

To yellowrock
First find all P60's going back to the tax year ending 5th April 2008 for both jobs.
For each year add the 2 gross amounts together. That is his combined gross earnings.
Next take off the relevant tax free allowances for those years - for y/end 2010 5th april you need to deduct 6475 then multiply the remainder by 20%. That is the tax due for that year.
For y/end 2009 it was 6035 to deduct from total gross earnings @ 20%
Slightly more complicated for y/end 2008 in that there was a 10% rate involved too.
Add the 2 earnings together - deduct 5225 from that total, then take off 2230 from that figure and what remains should be at 22% deduction. Add the 223.00 tax at the 10% rate onto the result for the 22% figure and that should be that tax due for 2008.
That will then hopefully give you the tax due for the 3 years that are applicable in your case. Does this total add up to the £3.5k that HMRC state in their communique? Also for the earlier years interest may be chargeable as well. Your OH should have had a letter detailing all these details. They never normally ring you by phone or contact you by email as that is definitely a scam, so make sure that it is from his actual tax office.
If this is going to cause financial hardship, you can apply to spread the repayment of the underpayment back via your coding over more than one year which in effect then means that you do not have to set up a monthly payment as it will all be taken care of via his coding for both jobs. They may be prepared to spread it over say 3 years as that is the time frame for the original offence. Not his fault exactly, but you should always make sure that your P60's are correct for however many jobs you have at the end of every tax year.
By the way, so long as you have declared both gross amounts to the tax credit bods, then you should not have a problem with that. They are mearly interested in the total gross pay earned in a year.
Does that help?

yellowrock

Thanks all so much for your replies - it has helped alot.

He was contacted by letter from tax office, so should not be a scam! he received another phone call today from the tax office again saying that they are now calculating it all and he will receive a letter in 4-6 weeks regarding exactly how much he will have to pay and a telephone number for him to ring. This number, we are told, is for repaying in installments and as our income is low they will take that into account.

In the meantime, we are really mad at ourselves for not noticing the tax problem ourselves earlier, but a lesson has been learned.

The additional info was given to us by the taxman himself over the phone, in which he stated that the IR had contacted his employer where the tax was wrong many times by letter. I am confused though as to why my hubbie himself was never contacted in 3 years, it seems a ridiculous system allowing us to clock up such a debt.

The two part time jobs he has amounts to 42 hours a week so he does not have a full time job as well, as far as he can remember he filled out a P46 back in 2008 when he started his 2nd job, but unfortunately didnt photocopy it.

Thanks again for you responses
YR

Mikeyorks

yellowrock wrote: »

The additional info was given to us by the taxman himself over the phone, in which he stated that the IR had contacted his employer where the tax was wrong many times by letter.

I didn't ask question 2) in post #4 idly. I still find it a little odd that HMRC volunteered that info ..... your OH must have been talking to Vince Cable!

However as they have volunteered the information .... you should make best use of it? The responsibility for operating PAYE correctly rests with the employer in the first instance. And it is only where the employer makes a reasonable error that HMRC should switch any underpayment which consequentially arises - to the employee. In your case HMRC have made it clear that the employer has made repeated errors despite being told? In such a case HMRC appear to have no choice but to require the employer to pay any underpayment.

The 'letter' you have is a P800? And there should be a 'What happens next' leaflet enclosed with it. If you look at Para 2 on the first page it says this :-

Most employers and pension payers deduct PAYE tax from your pay or pension correctly. But sometimes they do make mistakes. If you think your employer or pension payer has made a mistake such as not taking reasonable care to operate the correct tax code, then they may be liable for the tax instead. You will need to write to us at the address shown on the form P800 [FONT=BAPPW G+ IR Modena,IR Modena][FONT=BAPPW G+ IR Modena,IR Modena]Tax Calculation [/FONT][/FONT]and tell us why you think your employer or pension payer has made a mistake. We will contact you as soon as possible to let you know what has been decided and explain what this means for you.

You need to vary the approach a little to clarify HMRC have told you the employer has made repeated errors. But do bear in mind the relationship with the employer if he's forced to pay - as he should - for his continued negligence?

molit

Has anyone had any success with claiming a former emploer has been negligent. I have just received a nice request for additional payment :-(

Mikeyorks

molit wrote: »

Has anyone had any success with claiming a former emploer has been negligent. I have just received a nice request for additional payment :-(

Many will have tried - few will be successful. HMRC have a formal internal route to consider such applications. But you will need fairly firm evidence - and HMRC will be aware in general terms of the employer PAYE performance - before they will make a ruling in your favour.

2nd para of post #2 from earlier today :-

https://forums.moneysavingexpert.com/discussion/2964156