Income tax fiasco!

mjgreen60

Hi all,

I'm desparately after some help please!!

To cut a long story short, I'm a doctor in full time employment with the NHS. I also do some extra locum work occasionally.

I just received my new tax codes through and rang the tax office to query them as they had changed - don't have them to hand currently.

The guy at the tax office said that it may be because I owe tax as the locum agency may have been claiming that theirs was my primary income and hence gave me a 647L code. This would have been in addition to my primary NHS income (also on 647L).

I have been back over my locum payslips and in total over the last couple of years have earned £12627.51. A total of 9951.95 taxable income once expenses etc have been claimed and have paid a total of 1550.98 tax on this. This is in addition to my NHS wage of approx 35000 - 40000.

I fully appreciate that I should have realised this issue much earlier so please don't tell me its all my own fault. I assumed being paid through a payroll company that the tax would have been sorted!

I also realise that I am likely to owe tax back. However I wanted to check what my next steps should be. An appointment at the tax office to go over everything? Just leave it to them to sort?

I have just got married 2 days ago and so can't really afford to drop my wage by a huge amount. Is there any leniency on how long I pay this back over?

I realise this mess is my own making, but any advice would be really gratefully received.

Many thanks,

mj

System

You need to advise HMRC which post is your main one and ask them to allocate your personal allowance to that source. Do you have different payroll numbers for each to help HMRC distinguish between the 2?
You also need to give as accurate an estimate of your gross income at both sources because on the figures you have given so far your total income takes you into the 40% tax band though not all at your main job. HMRC need this to give you as accurate a code as possible.

If you do owe tax then depending on the amount HMRC can collect it through the tax code applied to your main job and it can be collected over up to 3 years.

System

Check your P60(s) when they arrive, the final tax code will be shown for each employment. (Or look at the latest payslips)
If your total income takes you into the 40% tax bracket, then the locum work may all need to be taxed at 40% (but it seems that you are close to the threshold so I'm not sure) the tax code for all at 40% would be "D0"
If below the 40% bracket, then the locum work should probably have been on tax code "BR" so that all of it was taxed at 20%

You can phone HMRC and explain that you cannot afford to pay the tax owed back over 12 months (but you may need to make the case for hardship) and they may agree a payment plan of up to 3 years.

Edit: Pam17 just posted whilst I was typing this :cool:

mjgreen60

Thank you both for your replies - will get onto HMRC and see what they have to say. Is good to hear that I may be able to take a bit longer to pay the money back.

Fingers crossed the deficit won't be too large and from now on I will be taking a lot more interest in my tax codes!!

chrismac1

What are the new tax codes? I mean at this stage you have not been issued with a tax demand unless I have misread your post, so possibly there is no need to worry unless and until you do get one. I have a client who was issued with "Tax calculations" for 2 tax years for some GP locum work and due to a mess-up by the NHS who seem completely incapable of running payroll systems properly and isssuing P45s in any sort of sensible timescale.

Tax calculation - my answer to my client is "Very interesting. Do nothing until we get a tax assessment and then I will point out the various errors in the calculations and, if necessary and if possible, invoke Esc A19." Note this was in June 2010. We have not heard a dicky bird since then - except HMRC repaid my client £2k for 09-10 where one NHS trust had taken too much tax off my client.

So unless you have an assessment my advice is to sit tight and keep funds back in case the dreaded brown envelope appears on your mat....
So