BR Tax - can we appeal?

cannyshopper_2

Hi,

Wondered if you can appeal against having been assigned a BR tax code?

I'm posting on behalf of my husband.

He's 61 and currently gets a small pension, around £3000 pa, and is also working as an independent/freelance computer consultant.
He normally works on 3 or 6 month contracts with a break of several weeks in between.

He is working under an umbrella company who deduct tax & NI as though he was an employee paying normal PAYE.

Because of his rates, and the way PAYE works, he pays a lot of tax on his earnings for most of the year, but by February or March its less because of the weeks he's not earned anything. He doesn't claim JSA the weeks he's not working, he's been living off what he can save while he does.

Last year his total income from all sources was under £40,000 - we do not expect it to be higher this year. He is not currently working & if he doesn't work again before the end of the tax year he will be owed a small tax refund.

He has just had a notice of coding for 2012/2013 with BR for his MAIN employment.

Firstly, is this a mistake (do HMRC make mistakes like this????)

We think this is very unfair as it will probably lead to a massive overpayment of tax over the year... it will have the effect of reducing his net pay to the point where he may not be able to save as much for the periods when he has no work... so he might have to sign on for JSA (or whatever it's called now).

I know the pension has to be taken into account, but at the amount its paid shouldn't that be taxed at BR, with a "proper" code for the other work?

He hasn't submitted a tax return for a couple of years - would this help?

Pennywise

He needs to phone HMRC to tell them to allocate his personal allowance (£7475) against his main employment and that his pension should have the BR tax code. Should be straight forward enough to do on the phone.

TadleyBaggie

cannyshopper wrote: »

He has just had a notice of coding for 2012/2013 with BR for his MAIN employment.

Firstly, is this a mistake (do HMRC make mistakes like this????)

They sure do, it's just happened to me. I've just received two tax coding notices. For my actual employer, it's "BR". The second notice has a bizarre code of K1350 and is going to be sent to an company for which I haven't worked for for nearly two years!

Murdina

It is really not a big deal at all to ring up and ask them to change a code. They do not always have all the info about relative amounts of income to work out which is the main source.

You say he has not done a return for a couple of years. Has he been asked to or sent returns? If he has, you should have done them. If he hasn't then it is all the more important to keep checking his codes to make sure the "right" amount of tax is taken off. PAYE is meant to collect as far as possible the "right" amount of tax and only the taxpayer knows for sure what their overall situation is. It is up to you to flag up when it is not apparently doing its job properly, not just hope HMRC somehow get it right.

cannyshopper_2

He phoned them on Friday & they have swapped the codes over.

The lady he spoke to said its a common occurrence, caused by their computer system not being intelligent enough to look at the relative income from each source. It just allocates the normal code to the first employment it has on file (in this case his pension).

The lady said she spends about half of her time sorting out these cases.

I must admit it was an eye-opener to realise that HMRC has such a crappy computer system in place.