Underpayment bill

Archergirl

My husband has just had a tax bill for £600 as they say he underpaid tax in 2010-2011. They said they will take it back monthly in next years tax from his company pension.
He has a state pension I don't know if he pays tax on it. He has 2 company pensions that he pays tax on at 20%
During 2010-2011 he worked 10 hrs a week for a car delivery company and had a 647L tax code. The tax man said when he was there he didn't pay any tax. When I phoned the company they said he didn't earn enough to pay any tax ( he earnt £2990)
It cost nearly £2 on the phone to the tax office yesterday.
What do I do now apart from spend more money on the phone?

dori2o

You have the option of writing to ask for the underpayment to be cancelled if you believe that HMRC have failed to act on information issued by you/the employer within their timescales (12 months from the end of the tax year in question).

When did the pensions start?

When did he start the job?

When he started did he complete a P46?

If you can answer these questions it would help people to provide you with appropriate answers to your question.

Archergirl

His pensions started in Dec 2009 when he was 65 and left main employment.
He started the job end of March 2010 10 hrs a week.
He can't remember about the P46 but probably did.
Thanks for your help.

dori2o

Archergirl wrote: »

His pensions started in Dec 2009 when he was 65 and left main employment.
He started the job end of March 2010 10 hrs a week.
He can't remember about the P46 but probably did.
Thanks for your help.

It's probably not what you want to hear, but it's likely that either a P46 wasn't received or wasn't completed.

Even if it was, it would still fall into HMRC's timescales for dealing with information, so ESCA19 probably wouldn't apply.

He needs to find out for definite what the HMRC position is.

You need to find out if they received a P46 or if the first notification of the employment that they had was when the P60 information was received at the year end.

If they did receive a P46 at the time the employment started you need to find out if they issued the employer with a tax code.

Once you have this information you will be in a position to decide whether or not to make a claim under ESCA19, or if HMRC followed their procedures, make a claim for 'employer error'.

The good thing for you is there is plenty of time to get this looked at before April 2013 when his tax code will change to start collecting the underpayment.

Call HMRC. best times are from about 7:45am to about 8:30 am and after 6pm and ask how they were notified of the employment starting, was it a P46 or was it when they got the P60 information.

If they got a P46, ask if a tax code was issued to the employer and ask what the code was.

Archergirl

The employer told me his tax code was 647L when I spoke to them.

dori2o

Archergirl wrote: »

The employer told me his tax code was 647L when I spoke to them.

It's a question of how they received that information, or in fact didn't receive it.

647L was the emergency tax code in 10/11. The employer could have operated that code simply because they believed it was the right one to be on.

they might have operated that code based on what box your husband ticked on the P46.

They may have operated the code following being told to do so by HMRC.

You need to establish the answer to the questions I put to you in my last post.

unfortunately that will mean contacting HMRC.

Archergirl

Thank you, I will phone them on Monday.

jem16

Archergirl wrote: »

The employer told me his tax code was 647L when I spoke to them.

Unfortunately as he was already receiving pension income, it shouldn't have been as in all likelihood his personal allowance was being used for that.

BR should have been used for the job and would have been in the absence of a P45 or P46. So I would be trying to find out why the employer used the 647L tax code.

dori2o wrote: »

647L was the emergency tax code in 10/11. The employer could have operated that code simply because they believed it was the right one to be on.

Surely an employer would not operate the code simply because they "believed" it to be correct?

System

jem16 wrote: »

Surely an employer would not operate the code simply because they "believed" it to be correct?

Indeed, they are certainly not supposed to.

The 'default' code at the time should have been BR. The only authority they would have to deviate from that would be a P6 coding notice from HMRC, a completed P46 from OP's husband showing it was his only or main job (and no pensions being received) or OP's husband gave the employer a P45 showing code 647L (even though he was already getting his tax-free allowance against the pension - unusual, but I've seen that sort of thins happen before)

If none of the above apply, OP's husband could ask HMRC to investigate a potential employer error.

Archergirl

When I spoke to the taxman, he implied it was up to us to contact the company.
I will phone them on Monday and ask why they applied that tax code.

System

Archergirl wrote: »

When I spoke to the taxman, he implied it was up to us to contact the company.
I will phone them on Monday and ask why they applied that tax code.

Speaking to the employer might clear up why they used the code, especially if they acted correctly. But if there has been an employer error that is something HMRC will have to take up with them.