PAYE deduction wrong

MsFoxtoyou

Hello,
Just a quick question really...

I've just received a letter from my ex-employer stating that they deducted too little tax from bonus payments made earlier this year. In order to rectify this they have deducted the full amount of the latest bonus, and they have then asked me to pay the balance - within 30 days.
As they made me redundant in March I am not in a position to do this.

Does anyone know if I am liable for this money? I am hoping that as it was their error it is their responsibility. There seems to be conficting advise on the HMRC website.

Thanks everyone.

Mikeyorks

MsFoxtoyou wrote: »

Does anyone know if I am liable for this money?

Not immediately - as the error relates to a previous tax year.

They should follow this guidance :-

http://www.hmrc.gov.uk/paye/payroll/day-to-day/errors-previous-year.htm

But if their operation of PAYE is normally sound - HMRC will usually hold you ultimately responsible for any underpayment.

chrismac1

First of all, is their latest calculation right? There is so much messing about in the payroll system these days that only the very best payroll clerks can keep on top of it. As an example, I have one client who is an employee of the local Chamber of Commerce and they got his company car benefit totally wrong.

MsFoxtoyou

The payments relate to money paid this tax year. So I guess as they've already discovered their error and informed me HMRC would be on their side.
I just don't have the money to pay it though.
If I don't pay it back to my former employer I guess HMRC would be able to adjust my tax code next year to collect it?

CLAPTON

could you clarify the circumstances more exactly

when was the payment made; how much and how much tax

are you now employed