Income tax shocker

krisskross

My grandaughter works for a nationwide retail chain.

the company operates a savings system for anyone who wishes to join. Problem is they have been taking the amount to be saved, in my grandaughter's case £20 a week, before they calculate her tax owed resulting in an underpayment.

The company intend to recoup the whole of the underpayment in 1 go leaving her short of £60 in her wages. Can they take it all back at once bearing in mind that the underpayment is probably only about £3-4 a week but it has taken ages for the error to be noticed.

The company is taking the line that all employees are responsible for their tax affairs and should have noticed the discrepancy.My grandaughter works different hours each week and assumed that the tax deducted via PAYE was correct.

Mikeyorks

Assuming this is all in the current year - the line they should be taking is here :-

http://www.hmrc.gov.uk/paye/payroll/day-to-day/errors.htm#3

Problem is there is precious little time in this tax year to resolve the situation.

krisskross

So is there anyway to stop this money being taken from her weeks wages next Friday? She is not going to be able to pay her rent.

MelJ_2

Perhaps ask the company to 'loan' her the shortfall so that the PAYE can be deducted correctly within the tax year and not affecting your grand daughters quality of life by something out of her control.
As it was clearly their error in setting up the deduction incorrectly, it is not up to an employee to check that the tax calculation is correct - this would enable the underpayment to be recovered at an agreed rate over an agreed timescale, causing less inconvenience .

getmore4less

get money back from the savings scheme.

Mikeyorks

krisskross wrote: »

So is there anyway to stop this money being taken from her weeks wages next Friday? She is not going to be able to pay her rent.

Point out to payroll / local management that their error over a long period should not be resolved, to employee detriment, over such a short period? And there are procedures to be followed - not just DIY.

krisskross

getmore4less wrote: »

get money back from the savings scheme.

This was my thought but apparently only allowed to take it out in October unless the employee leaves. It sounds like a sort of christmas club with no interest paid.

getmore4less

krisskross wrote: »

This was my thought but apparently only allowed to take it out in October unless the employee leaves. It sounds like a sort of christmas club with no interest paid.

Or Tax or NI.

tell them thats the money that should have been taxed they need to take the TAX and NI from that money.

they won't listen but it's good to rant(get everyone to do it)

Cancel. and stick the money in an ISA.