Dreaded "Underpaid Tax" P800 Letter

suso

on earnings of £48738.00 and a code of 647L by the end of month 11 - tax deducted should have been £10264.xx give or take a pound or so. going off the figures in the first post, everything was correct.

I don't think there is an issue of missing P11d from this employer, as you have been there a good while and would have been receiving these regularly.

Check your bank statements to see if you got a payment from the first employer towards the end of March 2010
This payment would have been made in month 12, this would have changed the tax situation quite considerably.

Tax on earnings of £48738.xx on a code of 647L at month 12 would have been £9425.xx a difference of £838.xx as HMRC are asking for £841.00 this is most likely where this has come from.

your new employer has calculated the tax correctly based on the info they had, I think it is simply a case of 2 payments in the same tax month and the personal allowance have been used twice.

carhandle

Suso I would indeed have received a payment from Employer 1 in Tax Month 12. I don't have the detail to hand but it would've comprised a few days salary (i.e. 1st to 4th March) and the 8 days holiday which i'd accrued but not taken. So 12 days salary or thereabouts.

So fair to say that'd be the cause? Both crediting me with the 647L credit (or whatever personal allowance it was) when by rights i only should've received this once?

BoGoF

carhandle wrote: »

Suso I would indeed have received a payment from Employer 1 in Tax Month 12. I don't have the detail to hand but it would've comprised a few days salary (i.e. 1st to 4th March) and the 8 days holiday which i'd accrued but not taken. So 12 days salary or thereabouts.

So fair to say that'd be the cause? Both crediting me with the 647L credit (or whatever personal allowance it was) when by rights i only should've received this once?

That about sums it up, for the month of March you had the benefit of two sets of allowances. Employer 2 was correct to use 647L on a month 1 basis based on the P46 you completed.

carhandle

Hello again folks.

I have received a Statement of Earnings from Employer 1 so I now know the facts around my earnings/benefits/pension contributions etc

I’ve noted all the info I think relevant below. Can you take a look and cast your very helpful expert eyes across this please?

I’ve had a go with some online calculators and they don’t tie in with what the HMRC letter is telling me I’m due in tax. But I’ll not prejudice any advice by writing this down! Thanks...both used 647L by the way


Type: Employer 1 + Employer 2 + Total
Gross Pay: 49,950.86 + 4,384.62 = 54,335.48
Pension (PreTax Deduction): 1,784.08 + 0.00 = 1,784.08
Medical Insurance (Non Cash) 572.24 + 0.00 = 572.24
Taxable Pay: 48,739.02 + 4,384.62 = 53,123.64
PAYE: 9,423.60 + 914.26 = 10,337.86
(Employer Pension Contrib's): 3,122.16 + 0.00 = 3,122.16

jennifernil

On a taxable of £53123.64, you should pay tax of £11179.45.

So you have £841.60 to pay.

Note however, they usually round income down to the nearest pound when calculating, and round tax paid up to the nearest pound, so the figures are rarely 100% correct.

Looks pretty close to what they said?

To work it out you deduct the £6475 allowance, then it's 20% on the first £37400 and 40% on the rest.

jennifernil

Have you claimed all the relevant deductions? You mentioned getting a car allowance, did you use your own car for business? If so, were you paid as much mileage as HMRC allows?

carhandle

Yeah I got the car allowance but didn’t claim any business mileage at all......does that rule out that avenue?

jennifernil

You can only claim if you actually had recognised business mileage.

Do you mean your employer pays nothing? Or you just didn't bother claiming anything from them?

Did your employer require you to use your own car for business purposes?

If so, did you keep records?

I presume your car allowance was included in salary?

carhandle

Yeah the car allowance is included in that salary figure.

They would pay 20p/mile for use of my own car but i probably only did about 15 miles a quarter on business so never bothered with it.

jennifernil

Nothing worthwhile there then!!

HMRC seem to have calculated correctly, so the demand is correct. Just unfortunate that you didn't have the P45 to hand over. At least you have had the money in the bank for a while.