Tax Code adjusted late in the tax year

Legacy_user

A relative of mine had 2 part time jobs in the 2009-10 tax year.
For one employer HMRC applied a tax code of 647L and for the 2nd job the tax code was BR
But, on 27 Jan 2010 HMRC changed the tax codes to 130L and 517T respectively.
The 2nd employer refunded all the tax that had already been paid since the total income on that job was below the £5175 allowance.

But, the 1st employer had not been deducting any tax for the first 10 months of the tax year because the total income was going to be less than the £6475 allowance, and when the tax code changed to 130L the employer did not deduct the total tax owed during the last two months of the year. I assume there is a rule that limits the maximum proportion of salary that can be deducted when the tax code is reduced.
The values for this employer were:
Total taxable income = £3662.06
Tax deducted = £7.60
Tax code in force between 6-APR-2009 to JAN-2010 inclusive = 647L
Final Tax Code = 130L
I know that the tax calculation should have been:
TaxDue = ( 3662.06 - 1305 ) * 20 / 100 = £471.41 less the £7.60 deducted = £463.81 underpaid tax

I am struggling to work out why the employer only deducted £7.60 over the last 2 months pay packets, I would have expected a minimum of approx. £40 pcm and maybe more to pay at least part of the underpayment.

Can anyone offer suggestions why this could have occured ?

Pennywise

Was the 130L issued on a wk1 basis and therefore only applicable to the last couple of months?

Did the employer actually receive the 130L tax code? I.e. does the P60 show the final tax code as being 130L?

System

Pennywise wrote: »

Was the 130L issued on a wk1 basis and therefore only applicable to the last couple of months?

Did the employer actually receive the 130L tax code? I.e. does the P60 show the final tax code as being 130L?

Many thanks for your reply.

Unfortunately, my relation has not been good at keeping her documentation, so she has not found the payslips or the P60 that would have helped us.

The info I got was from an employment history printout that she asked HMRC to send her. So, I'm not 100% sure if this printout truncated the code to simply show 130L or if that was the whole code.

I have assumed that this printout from HMRC is taken from the data sent by the employer, so I assume the 130L was the final tax code operated by the employer.