Underpaid Tax - Advice Please

scottishgirl87

My boyfriend received the dreaded letter in November saying that basically he owes £750 in tax from tax year 2010/2011. Unfortunately due to Christmas and everything he hasn't had a chance to look into this at all, however, received his letter the other day saying they are going to change his tax code for 2012/2013 in order to reclaim the money and he'll basically be £50 per month worse off.

Now, he moved home in May 2010 and changed jobs in September 2010 and as such doesn't think he has any of his old wage slips from his previous employer, or his P60 for that year. If he contacts his previous employer do they legally have to give him a copy of these? I assume under the Data Protection Act they would have to but I'm unsure.

Also, I'm thinking the most likely reason for him underpaying is due to changing jobs? I've checked his pay slips (new employer) from September 2010 to March 2011 and he is on the correct tax code of 647L. Obviously we have to check if something has gone wrong within his previous employment. He was with them from 2006 though and I'm assuming his new tax code would just have been updated each year by them.

I also don't know if he can possibly go down the ESC A19 route.

Sorry for the long post, any advice would be greatly appreciated!

Mikeyorks

scottishgirl87 wrote: »

Now, he moved home in May 2010 and changed jobs in September 2010 and as such doesn't think he has any of his old wage slips from his previous employer, or his P60 for that year. If he contacts his previous employer do they legally have to give him a copy of these?

The P60 would have been issued in Apr / May of 2011 - so can't have been lost due to either of those events? The current employer may be willing to provide a copy? Ideally that will have the 'previous employment' also on it. But only if he handed them a P45.

You can post the detail from the P800. but it likely won't make much sense without the P60 (and P45) data to cross check.

ESC A19 doesn't stand much chance. It's explained in the Notes with the P800 ... and it has been issued conservatively within the timeframe. Additionally - you clearly can't indicate which 'information' you consider HMRC had but didn't act upon?

zygurat789

scottishgirl87 wrote: »

My boyfriend received the dreaded letter in November saying that basically he owes £750 in tax from tax year 2010/2011. Unfortunately due to Christmas and everything he hasn't had a chance to look into this at all, however, received his letter the other day saying they are going to change his tax code for 2012/2013 in order to reclaim the money and he'll basically be £50 per month worse off.

Now, he moved home in May 2010 and changed jobs in September 2010 and as such doesn't think he has any of his old wage slips from his previous employer, or his P60 for that year. If he contacts his previous employer do they legally have to give him a copy of these? I assume under the Data Protection Act they would have to but I'm unsure.

Also, I'm thinking the most likely reason for him underpaying is due to changing jobs? I've checked his pay slips (new employer) from September 2010 to March 2011 and he is on the correct tax code of 647L. Obviously we have to check if something has gone wrong within his previous employment. He was with them from 2006 though and I'm assuming his new tax code would just have been updated each year by them.

I also don't know if he can possibly go down the ESC A19 route.

Sorry for the long post, any advice would be greatly appreciated!

These, of course, are only excuses.
You sound as if neither of you has a clue as to why this has arisen, so find out the easy way, either phone HMRC go in and see them to discuss the letter, just ask why. Or you could write to them.
The usual reason is another job, the tax bill suggests wages of £3750 and the tax code was not BR as it should have been

scottishgirl87

Mikeyorks wrote: »

The P60 would have been issued in Apr / May of 2011 - so can't have been lost due to either of those events? The current employer may be willing to provide a copy? Ideally that will have the 'previous employment' also on it. But only if he handed them a P45.

You can post the detail from the P800. but it likely won't make much sense without the P60 (and P45) data to cross check.

ESC A19 doesn't stand much chance. It's explained in the Notes with the P800 ... and it has been issued conservatively within the timeframe. Additionally - you clearly can't indicate which 'information' you consider HMRC had but didn't act upon?

He may still have the P60, however, doesn't know if he has any wage slips to double check the correctness of the P60. He is going to have a good look tonight for everything he can't find.

However, I have since found his wage slip from October 2010 (new employer) and for some reason no tax whatsoever has been taken from this month. His tax code is listed on the slip as 647L (correct) and NI has been taken, yet no PAYE Tax?

As I said, I don't have all the information, at the moment I only have 3 of his wage slips from that year. Hopefully we will find the rest later but surely if more of his wage slips indicate that no tax has been taken, that's either his employers fault or HMRC's?

Mikeyorks

scottishgirl87 wrote: »

... if more of his wage slips indicate that no tax has been taken, that's either his employers fault or HMRC's?

Or the P45 was incorrect or - much more likely - he didn't hand one in and completed the P46 incorrectly? And finished on a cumulative Emergency Code (747L), Speak to the (new) employer and find out which.

scottishgirl87

Mikeyorks wrote: »

Or the P45 was incorrect or - much more likely - he didn't hand one in and completed the P46 incorrectly? And finished on a cumulative Emergency Code (747L), Speak to the (new) employer and find out which.

Will find out, thanks.

[Deleted User]

scottishgirl87 wrote: »

He may still have the P60, however, doesn't know if he has any wage slips to double check the correctness of the P60. He is going to have a good look tonight for everything he can't find.

However, I have since found his wage slip from October 2010 (new employer) and for some reason no tax whatsoever has been taken from this month. His tax code is listed on the slip as 647L (correct) and NI has been taken, yet no PAYE Tax?

As I said, I don't have all the information, at the moment I only have 3 of his wage slips from that year. Hopefully we will find the rest later but surely if more of his wage slips indicate that no tax has been taken, that's either his employers fault or HMRC's?

Sounds to me like when he started his new job he has completed a P46 and ticked box A then not handed his P45 to new Employer which has caused the underpayment.

scottishgirl87

Thanks for the replies so far.

As an update, boyfriend has dug out his old wage slips and found that after changing jobs in September 2010, HMRC have failed to claim tax from him for the first 4 months. This despite having the correct tax code listed on these wage slips and them obviously knowing he has changed jobs.

Does he have a claim via the ESC A19 form now? As he has provided them with the correct tax code and change of employment information, they have failed to use that information to claim tax from him.

PS. I'm not condoning the fact that he doesn't even bother reading his wage slips, if he had realised sooner this wouldn't be a problem.

chrisbur

scottishgirl87 wrote: »

Thanks for the replies so far.

As an update, boyfriend has dug out his old wage slips and found that after changing jobs in September 2010, HMRC have failed to claim tax from him for the first 4 months. This despite having the correct tax code listed on these wage slips and them obviously knowing he has changed jobs.

Does he have a claim via the ESC A19 form now? As he has provided them with the correct tax code and change of employment information, they have failed to use that information to claim tax from him.

PS. I'm not condoning the fact that he doesn't even bother reading his wage slips, if he had realised sooner this wouldn't be a problem.

There are several possibilities that all fit these details. First you have to realise that having what you call "the correct tax code" is not as simple as it seems. To be taxed correctly a new employer needs to know the tax code the tax basis the amount of gross paid so far this tax year and the amount of tax deducted so far this year. These are the details that are carried forward from one employer to the next via the P45 when all goes correctly. The first possibility is that the new employer was given the P45 but did not enter the details correctly, for example if the code and basis are used but the previous pay and tax are omited then the result would be that no tax was deducted, but the payslip would show the correct tax code. Another possibility is that a P45 was not handed in so a P46 was given for completion which would result in the emergency tax code being used. The emergency code is the same code that most people have so what you see as the correct tax code could be the emergency code which if the P46 was filled in correctly should have been applied on a non-cumulative basis, but if filled in incorrectly would have been applied on a cumulative basis again resulting in no tax being deducted. Or if the P46 was filled in correctly but applied incorrectly by the employer the same result with no tax being deducted.

To know what has happened would need all the P45 details not juat tax code, and full payslip details. Confirmation that the P45 was handed in, has the employer confirmed reciept in any way? Was a P46 completed and if so which box was selected?

Even with this I do not think that there is a very likely chance of ESC A19 suceeding as I think the tax office gets 12 months from the end of the tax year that get information to act on it, and they would only have had details of this tax underdeduction when the tax return was made sometime after April 2011. The tax office have no idea what or if any tax is being deducted from an individual untill after the tax year ends. Your only hope and it is a small one would be to claim it was an employer error but unless you can show either the P45 was recieved but applied wrongly or a P46 was filled in correctly but applied wrongly you have no hope; and even then I think you may have to show it was not just an honest mistake on the employer's part but part of a generally poor operation of PAYE.

agrinnall

scottishgirl87 wrote: »

Thanks for the replies so far.

As an update, boyfriend has dug out his old wage slips and found that after changing jobs in September 2010, HMRC have failed to claim tax from him for the first 4 months. This despite having the correct tax code listed on these wage slips and them obviously knowing he has changed jobs.

Does he have a claim via the ESC A19 form now? As he has provided them with the correct tax code and change of employment information, they have failed to use that information to claim tax from him.

PS. I'm not condoning the fact that he doesn't even bother reading his wage slips, if he had realised sooner this wouldn't be a problem.

HMRC don't claim tax from anyone, your boyfriend's employer are required to deduct tax due (based on the tax code, which you say is correct, although you need to take into account what chrisbur says) and pay it to HMRC. So when you say they have failed to claim it, do you really mean that his employer has failed to deduct it, so he has actually received the tax himself, or have they deducted it but not passed it correctly to HMRC so it doesn't appear in his payment record?