Think my mothers employer may be deducting too much tax.

smpunter

My mother works for a small shop/post office & suspects either her employer is deducting too much tax from her or is scamming. My mother only turned 65 in Oct last year & has been claiming her state pension since she turned 60 & kept on working.

Her pay slip says roughly £8500 gross pay a year & her state pension totals £7228. The tax being deducted is £215 a month & no NI of course due to her age.

A while ago other staff members were trying to claim tax credits & when they called HMRC they had no note of them so it is possible her employer may be scamming. Her employer has also changed the name of the shop a few timers over the years.

She accidentally seen a fellow staff members wage slip which showed the tax being deducted £88, this person does more hours than her. Mum of course has the state pension plus her wage & her personal allowance should now be £10500 pa.

The tax code on her wage slip is K213 she has not had any letters from HMRC for years so does not know if this is correct.

I have told her to query it with the revenue as I believe she is paying way too much tax. Unfortunately if her employer is scamming she will be unlikely to see the money back.

If any experts could check the figures i would be grateful.

Thanks

nomunnofun

Perhaps a bit premature to be accusing an employer of scamming.

1) We need to know why her code number is K213. This suggests that she is receiving a state pension or other benefits which are 2129 in excess of her personal allowance which should, as you say,is £10500. She should have a breakdown of this on a form P2 which wouild have been issued to her.

2) The tax due on a code of K213 on £8500 should be £177.15 or so per month. Details of a payslip would be helpful.

somethingcorporate

Very little to do with the employer, the employer applies the tax code that HMRC give them.

She needs to talk to HMRC.

jem16

smpunter wrote: »

Mum of course has the state pension plus her wage & her personal allowance should now be £10500 pa.

As your Mum only turned 65 last November, it's more than likely that they haven't used the increased allowance as yet although she is entitled to it for this tax year.

The tax code on her wage slip is K213 she has not had any letters from HMRC for years so does not know if this is correct.

At some point she would have had a P2 Coding Notice which would say how the K213 tax code is made up. I suspect some of it is either underpaid tax or some other benefit other than state pension.

For example for this year the standard allowance is £8105. Minus her state pension of £7228 leaves £877 and should see a tax code of 87L and not K213. to get K213 would see another deduction of £3007. So if the tax code is still correct there must be a reason for that extra deduction.

I have told her to query it with the revenue as I believe she is paying way too much tax. Unfortunately if her employer is scamming she will be unlikely to see the money back.

As others have said, I don't think the problem lies with the employer and I'm sure there is no scamming going on.

She should be contacting HMRC anyway to get a new tax code based on the increased personal allowance so that would be the best time to go over all the details and find out if K213 was correct or not.

smpunter

Her employer has recommended she contact the revenue so yes I dont think there has been any scamming going on. She has not had anything from HMRC for years. Indeed her employer only issued the staff with P60s for the 1st time in years when queried a few months ago.

When she was still receiving working tax credit over 5 years ago the revenue realised she had been overpaid & gave her a payment schedule, she used bank giro credit to pay it back. I can only assume they perhaps have clawed money back through her tax code & never changed it again. I will make sure she gets onto HMRC in the week as I think they must owe her a few bob. Her state pension £7228 & wages £8900 ( I made a mistake when i posted earlier) are the only income/benefits she receives.

Many Thanks folks

smpunter

Mum phoned HMRC who agreed her tax code is wrong. They have adjusted it for this tax year & said she will be refunded through her wages so she better let her employer know. They requested she writes in so they can investigate how much they owe her back over previous tax years. Fingers crossed :-)

Savvy_Sue

smpunter wrote: »

Mum phoned HMRC who agreed her tax code is wrong. They have adjusted it for this tax year & said she will be refunded through her wages so she better let her employer know.

Your mum can tell her employer whatever she likes: nothing can be changed before HMRC tell the employer what change to make.

She needs to check the tax code used on her next couple of payslips, and if it doesn't change she should first ask the payroll people if a new code has been received, and if it has why it hasn't been used, and if it hasn't she needs to chase HMRC.