Employer Tax Miscalculation

SeekingUrgentHelp2012

Sorry, Jem16! No, I didn't change jobs.

Mikeyorks

Still doesn't say just what you earned!

However. Code BR would have seen you OK (ish) up to £43876. Much above that and you're going into arrears at the rate of 20% ..... as you should have been paying 40%. So £8k underpaid hints at circa £85k overall?

Where did the 'BR' come from. Did you complete a P46 when starting - or have you been there a while?

SeekingUrgentHelp2012

Mikeyorks, yep thats about right i think. started oct 2009, no problems previous year, and pretty sure i did complete a p46 upon starting.

antrobus

My understanding is that the BR code is an instruction to tax everything at 20%. So if your taxable earnings were £95kish, then yes that would likely lead to a big underpayment. But that would not be the fault of the employer, they are obliged to apply the tax code supplied and nothing more.

agrinnall

So you've earned £85K and spent so much of it that you don't have £8K left to pay the tax that you owe? My heart bleeds for you.

SeekingUrgentHelp2012

thanks antrobus. not really looking to lay blame as more concerned how this is likely to be best dealt with now and what anyone's experiences were in similar situations.

Mikeyorks

SeekingUrgentHelp2012 wrote: »

Mikeyorks, yep thats about right i think. started oct 2009, no problems previous year, and pretty sure i did complete a p46 upon starting.

So - would your payslips going back to then show 'BR' from the outset?

If you earned under £42k (ish) then you would be overpaying. As 'BR' doesn't give the basic personal allowance. But as soon as you get much above that - then the converse applies.

If the 'BR' has been there from the outset and flows from the P46. Then, I'm afraid it was down to you to advise HMRC?

http://www.hmrc.gov.uk/incometax/basics.htm#8

I assume this is the first SA Return (or salary has suddenly climbed significantly) - as that would have highlighted the problem earlier. Unfortunately - as you're in SA (and well above the £3k threshold to Code this out) this is all going to be payable 31st Jan.

SeekingUrgentHelp2012

cheers agrinall. wasn't on here for sympathy, just practical advice. but glad you think you know enough about my personal situation to offer sarcasm. very helpful.

SeekingUrgentHelp2012

thanks Mikeyorks. much appreciated.

antrobus

SeekingUrgentHelp2012 wrote: »

thanks antrobus. not really looking to lay blame as more concerned how this is likely to be best dealt with now and what anyone's experiences were in similar situations.

For whatever reason HMRC issued you with a BR tax code (why, I'm not sure it matters). Had they known that you were going to earn £95ish then they'd have issued you with a 0T tax code (which would have meant that higher rate would have been applied). Presumably, because you only started the previous job in October 2009, they didn't realise that you'd be earning so much. Technically speaking, you should have probably have informed them of this fact, so they could have issued the correct code. Or perhaps your accountant should have done so, since that's the sort of thing you pay them for.

I'd guess that you simply owe HMRC £8k. And so your options are (1) borrow the £8k from your bank so that you can make payment by 31 Jan or (2) agree a repayment schedule with HMRC, which is the sort of thing your accountant should be able to sort out.