PAYE error by employers, HMRC claiming underpaid tax

CovTeej

Not sure if I am in the right section, if not, apologies.

On the 16th November 2011 I received a letter from HMRC telling me that I had underpaid tax for the period 2010-11 by £109.60, this apparently was due to having two jobs at the same time with both employers applying a PAYE code which gave the full tax free allowance in both wages.

At no point did I have two jobs at the same time. I wrote to HMRC enclosing copies of P45 from my old employer clearly showing the leaving date as 30th September 2010 and my contract from my new employers showing the start date of 4th October 2010.

I have today received a reply from HMRC advising that when I left my former employers, my salary and tax details were not forwarded to my new employers. As I had not received my P45 by the time I started on the 4th October I completed a P46 instead. Since starting with my new employers I have paid the same amount of tax as all my colleagues (we are all on the same rate, work the same hours and pay the same tax), so fail to see how I did not pay 'enough'.

Do I have any recourse, or do I have to cough up even though it is not my error.

scheming_gypsy

you pretty much have to cough up as far as i'm aware. Even though it wasn't your error, you've received money that should have gone to the tax man.

chrisbur

Without full figures I cannot be absolutely certain but the most likely explanation is that there was an overlap of payments with the two jobs rather than an overlap of employment. Both employers paid you during the same tax month so you were given an extra month's tax allowance. To check if this is the case look at your last payslip from your old employer and your first from your new employer to see what month number appears on them, if they are the same then you have an overlap.

Any

How have you completed P46? Which option of statement have you chosen on it?

If you completed it correctly, your new employers should have put you on wk1/mth1 code.
And if they didn't, you should have noticed.

I have the feeling that you weren't put on that code and in one month got payment from both employers and they both applied your tax free allowance for that month.

I am affraid that we are all responsible for basic understanding of our taxes and for our tax payments. I think there is a recourse only if you told HMRC they have made a mistake and they didn't correct it..

P.S. - did you hand over your P45 to your new employer once you have received it?

CovTeej

Hi

Have just checked wage slips, final from old employer showing period 7, first one from new showing period 8.

And yes, P45 was submitted once received, I can't remember how I completed the P46, it was over 12 months ago, but I am sure that it would have been the correct option (the option for having had a previous job but this is now my only job, or words to that effect).

agrinnall

If you post the figures we can check them and advise if anything more is owed.

From the P45:

Gross pay to end of employment
Tax paid
Tax code when employment ceased
Date employment ended

From your new job P60 :

Date employment started
Gross pay for year
Tax paid
Tax code applicable at the end of the year