Filled out a P38S and then ended up getting payed over £5000

amf

kydon wrote: »

The same thing happened to me and they just deduct the tax! If i remember well though i called them and told them about the situation!

If HMRC try to deduct tax from the employee in such circumstances, the employee should ask the question "is it not the employer's responsibility to operate PAYE correctly?". Most HMRC employees dealing with personal tax will not, unless prompted by such a question, even think about making recovery from the employer....even if prompted they might need a further nudge in the direction of their Employer Compliance colleagues, who would see this as manna from heaven.

In short, there is no way on this earth that HMRC would direct that recovery of the tax should be from the employee in these circumstances.....if you can get the right people in HMRC to consider the issue!

Hoddie_2

If £9,000 was earned with the same company, then of course HMRC would make the employer liable. As correctly pointed out above, the moment the tax-free threshold was reached they should have started to deduct tax on a 0T week1/month1 basis.

If the £9,000 was earned with more than one company, or £4,000 or more was investment income, HMRC will likely hold the employee liable as they could not reasonably expect the employer(s) to consider income that the employee had at other sources (even if they were told about it).

MXW

amf wrote: »

If HMRC try to deduct tax from the employee in such circumstances, the employee should ask the question "is it not the employer's responsibility to operate PAYE correctly?". Most HMRC employees dealing with personal tax will not, unless prompted by such a question, even think about making recovery from the employer....even if prompted they might need a further nudge in the direction of their Employer Compliance colleagues, who would see this as manna from heaven.

In short, there is no way on this earth that HMRC would direct that recovery of the tax should be from the employee in these circumstances.....if you can get the right people in HMRC to consider the issue!

If a P38s has been completed then the employee is stating that they are a student and will only work in the holidays and will earn below the personal allowance, they are signing the form to that effect. If the individual exceeds the personal allowance then the individual is respossible NOT the employer. Tax records will be set up and assesments issued accordingly to collect the underpayment. I can assure you that this would not be collected from the employer and employer compliance would certainly not get involved in such a trival matter.

Hoddie_2

If a P38s has been completed then the employee is stating that they are a student and will only work in the holidays and will earn below the personal allowance, they are signing the form to that effect. If the individual exceeds the personal allowance then the individual is respossible NOT the employer. Tax records will be set up and assesments issued accordingly to collect the underpayment. I can assure you that this would not be collected from the employer and employer compliance would certainly not get involved in such a trival matter.

I think you're missing the point, regardless of whether or not he signed the P38(S) when he shouldn't have done, the employer would still be at fault if they used the NT code for the full £9,000. If they did, and HMRC subsequently raised assessments stating that the individual owes money, he would be well within his rights to appeal against these.

You're correct when you say Employer Compliance are unlikely to get involved, but this will likely depend on how big the employer is and how many P38(S) employees they're likely to have.

MXW

Hoddie wrote: »

I think you're missing the point, regardless of whether or not he signed the P38(S) when he shouldn't have done, the employer would still be at fault if they used the NT code for the full £9,000. If they did, and HMRC subsequently raised assessments stating that the individual owes money, he would be well within his rights to appeal against these.

You're correct when you say Employer Compliance are unlikely to get involved, but this will likely depend on how big the employer is and how many P38(S) employees they're likely to have.

Employer compliance would still not get involved. BST would ,business support team. If an employer is consistantly incorrectly operating PAYE then it is more likely that they need help and support of the BST. Compliance would only get involved if there was something 'amiss'. If the employee appealed against the assessment it would not be classed as offical error as the mistake had been rectified within the scope of offical error. To pursue down the road of collecting the underpayment from the employer, would not happen Regulation (26)(3).

Hoddie_2

Correct, it wouldn't be an official error as the error has been made by an employer and not HMRC. I believe you're still missing the point. I also cannot find Regulation (26)(3) either, please point me in the right direction and I'll be happy to be proved wrong.

sarahlouise210

Personally, although the employer should have questioned the level of earnings...the employee(OP) has admitted that they knew the rules and signed the P38 as they expected their income to be below the threshold. When it went over the threshold they should have contacted their employer and banks and Building societies. The self declaration is a guarentee to the employer that the income for the year will not exceed the taxable limit..the OP has not broken down the payments received. The taxable income could have been made up largely of the untaxed interest..the employer would have no knowledge of this. The OP was asking if they needed to complete a tax return..so knows that they owe tax and the reason being they filled in a P38S and R38 incorrectly. Yes, the employer may need some additional training, but th eOP knew there income was nearly double the taxable limit and as such should take responsibility

MXW

Hoddie wrote: »

Correct, it wouldn't be an official error as the error has been made by an employer and not HMRC. I believe you're still missing the point. I also cannot find Regulation (26)(3) either, please point me in the right direction and I'll be happy to be proved wrong.

I think it is you who is missing the point. An offical errror is something that has not been picked up by HMRC, whether it is an incorrect code number op by an employer, or information provided by a tax payer that has not been actioned, if HMRC have been provided with information, whether it's from an employer or employee and that has not been acted on within the criteria for offical error and it can be proved then the underpayment would not be collected from the tax payer. The Reg (26)(3) is the submission to the collector of taxes giving details of the employers error with respect to the underpayment, it would be up to them to investigate and make the decision, this reg may be called something else now. I stick by what I have already said in so much that the underpayment would be collected off the employee and not the employer.

Goat

On closer inspection of my final payslip, I have actually been taxed 22% for everything I earnt over the threshold, so have actually paid too much tax. (The 10% tax threshold seems to have been skipped.)

I do owe the tax I should have paid on the interest on my savings, but overall I believe I am owed money

I'm planning on sending a letter to HMRC, along with my P45 and bank statement (showing the interest payment.)

chelsnels

As I have filled in both the P46 and the P38S, will this confuse matters as I will be earning under the minimum amount? Also how does it work, will I have tax deducted and then have to claim it back?