What to do , 810L W1 taxcode !

DAREDEVIL78

hi , just a quick tax code query for members to advise me on .

I got a new job in june 2012 a couple of months into the 2012-13 tax year , when I started with my new employer I handed in my p45 part to them.

Now we are nearing the end of this tax year and my wageslips are STILL stating the tax code 810L W1.

Am I correct that this is a emergency tax situation as a result of my employer not doing something they should have done with my p45 ??

if so will I have paid too much tax knowing that my wageslips have stated this tax code for the majority of this tax year.

also my gross figures are incorrect as the earnings from my previous job (april-june 2012) are not added into the gross equation !

what can I do to make sure that my end of year earnings are correct or is it my employers responsibility ??

thanks for looking :money:

Tigerprint

It sounds like your employer has put you on a week 1/month 1 basis. basically it calculates your tax on each weeks/months earnings (i.e. however you are paid, weekly or monthly)

On this basis No taxable pay & tax paid previously are taken into account.

If it did not have the wk1/month1 trigger then all your previous gross taxable pay & tax paid figures would have been taken into account (i.e. noted on your payslips)

You may have overpaid tax by a very small amount depending on how much you earn etc. If your cumulative figures (i.e. all the taxable pay & tax paid previously) are not taken into account before the year end (i.e. your current employer has not had notification from the Inland revenue) then you may well be due a refund from the Inland revenue but I wouldn't have thought it would be much.

chrisbur

What tax code is on your P45 part 1A and is there an X after it?
What section number on the part 1A does your earnings from your old employment appear under?

To work out your tax position you would need to give the pay and tax from the P45 and what your pay and tax for this year in your new employment. If you are weekly paid and your payday is Friday it would be best to wait untill next Friday to give the details when your last payment (a week 53 payment) goes through as this may well affect your overall tax position for the year.

beartsarah

Hi daredevil,

As you had a paid job from April 2012 to June 2012 before your current one did you provide the new employer with the P45?

The other posts are right, this indicates that you are being paid weekly and all other earnings for the year prior to this job are being ignored. It is like you have not had any other job before June 2012. Unfortunately this does not mean you will have overpaid tax it is much more likely you have underpaid and will get a tax bill for the difference in 6 months time once both employers have submitted you're annual return. Part of you personal allowance was taken account of in your previous employment but they are applying the full amount to a 9month period not a pro rata of the 12 months.

If you provided them with a P45 and they have failed to complete the new employer section correctly when setting you up on payroll this is their error not yours and if you have underpaid tax because of it they are actually responsible for paying it across to HMRC without deducting it back off you. Employers are responsible for running their payrolls correctly! I've recently completed an appeal with HMRC of a foreign national underpaying tax to the tune of £18K in her first year here because her employer applied the wrong tax code and the company employing her were made to pay the entire tax bill without reclaiming any of the money from her salary because it was their error that caused the problem in the first place.

Let me know if you did provide the P45 to the payroll of your new employers and I will tell you what to do about. HMRC will have the correct figures for you because both employers will submit an annual return stating the figures you were paid by them and the tax they deducted but it will appear you have but my concern is who will be responsible for the possible underpayment of tax.

Sarah B

Valli

beartsarah wrote: »

Let me know if you did provide the P45 to the payroll of your new employers and I will tell you what to do about. HMRC will have the correct figures for you because both employers will submit an annual return stating the figures you were paid by them and the tax they deducted but it will appear you have but my concern is who will be responsible for the possible underpayment of tax.

Sarah B

This bit doesn't make sense, Sarah.

DAREDEVIL78

I did have a job with asda from start of tax year til june 2012 then left to start my new job , eventually I got my p45 from asda and gave my new employer their part of it .

hope this helps ?

beartsarah

Sorry if that bit didn't make sense Valli it's been a long day lol.

Daredevil, if you have supplied your employer with your P45 showing tax code and gross income and deductions to date and they have set you up on a week 1 basis then your tax deduction each month is wrong.

You have in all likelihood underpaid the tax you should on your overall income for 2012-13. When both your employers have submitted their P35 (Employer's annual return) to HMRC HMRC will then have your gross income figure and the tax that has been deducted and paid across by your employers.

Because of this mistake by your employer you may have underpaid tax on your total income for the tax year. It does depend on what income you have for each job and the difference between the old and the new. I'll give a general example below;

1st job - £800 per month. Tax is treated cumulatively, you are expected to earn £9,600 in the year and are taxed based on this less your personal allowance divided by 12 so £24 a month.

2nd job - £2000 per month. Tax is treated cumulatively but week 1 from when you started in the tax year, assume for 9 months you will earn £2000 x 9 (not 12 for the year) so £18,000, work out annual tax of total income divide by 9 and deduct so £219 taken off per month (in your case they would do it by week but this is just an example).

Come the year end you have earned £20,400 in total and had £2,045 tax taken off of you. Your tax bill is £20,400 - £8105 personal allowance x 20% which comes to £2,459 so you end up owing HMRC £400. (this is just a rough example don't get to finicky about specific figures please lol).

My main point was if you gave the new employer a P45 there may have been a delay but as soon as they had it they should have corrected the payroll, added in your year to date figures taking into account your previous employment and the tax would have corrected itself.

As they have not done this it's left a situation where you could be liable to pay over a lump sum of tax to HMRC or have the deductions taken through your tax code next year. But this isn't your error it is your employers. Even without a P45 they could have asked for your last wageslip and completed a P46 with the correct year to date figures.

Does that make more sense? Like I said it's been a long day.....


Sarah B

chrisbur

beartsarah wrote: »

Sorry if that bit didn't make sense Valli it's been a long day lol.

Daredevil, if you have supplied your employer with your P45 showing tax code and gross income and deductions to date and they have set you up on a week 1 basis then your tax deduction each month is wrong.

You have in all likelihood underpaid the tax you should on your overall income for 2012-13. When both your employers have submitted their P35 (Employer's annual return) to HMRC HMRC will then have your gross income figure and the tax that has been deducted and paid across by your employers.

Because of this mistake by your employer you may have underpaid tax on your total income for the tax year. It does depend on what income you have for each job and the difference between the old and the new. I'll give a general example below;

1st job - £800 per month. Tax is treated cumulatively, you are expected to earn £9,600 in the year and are taxed based on this less your personal allowance divided by 12 so £24 a month.

2nd job - £2000 per month. Tax is treated cumulatively but week 1 from when you started in the tax year, assume for 9 months you will earn £2000 x 9 (not 12 for the year) so £18,000, work out annual tax of total income divide by 9 and deduct so £219 taken off per month (in your case they would do it by week but this is just an example).

Come the year end you have earned £20,400 in total and had £2,045 tax taken off of you. Your tax bill is £20,400 - £8105 personal allowance x 20% which comes to £2,459 so you end up owing HMRC £400. (this is just a rough example don't get to finicky about specific figures please lol).

My main point was if you gave the new employer a P45 there may have been a delay but as soon as they had it they should have corrected the payroll, added in your year to date figures taking into account your previous employment and the tax would have corrected itself.

As they have not done this it's left a situation where you could be liable to pay over a lump sum of tax to HMRC or have the deductions taken through your tax code next year. But this isn't your error it is your employers. Even without a P45 they could have asked for your last wageslip and completed a P46 with the correct year to date figures.

Does that make more sense? Like I said it's been a long day.....


Sarah B

If I understand your post correctly you are assuming that the OP has had their tax calculated cumulatively in both employments; but they advise in the first post that "my wageslips are STILL stating the tax code 810L W1." so obviously not on cumulative basis. I have invited the OP to give details of P45 and earnings in order to work out their tax position though did suggest that they wait untill the tax year end so we get the full and correct figures.

beartsarah

I agree Chrisbur, it would give a much clearer indication of the situation if we had the figures.

810L W1 would indicate that the tax code is being applied cumulatively from the point it was first instigated i.e. June 2012.

The fact that it is still stated as his code is not surprising at all, week 1/month 1 indicates no previous earnings in the year to take account of and a mid year start of income. This would apply to every following month in the year as the cumulative calculation would be based on the point when the week1/month 1. Of course it often depends on the software producing the payslip but I'm not surprised at it being there if the year to date figures from the previous employment have never been taken into account.

It may be they have actually corrected his deductions and he has nothing to worry about. Once the new tax year starts in April the W1 basis will disappear anyway.

The figures will give a much clearer picture of what is going on but there really isn't a need to wait for the end of the tax year (although it's only a few days away!). The last wageslip will give YTD figures for the 2nd employment and the basis of calculation can be derived from that straight away which will give a clear indication of if it has been done correctly or not. The P45 will indicate how his previous employment was calculated as well.

Of course I hope his second employment has been calculated cumulatively in some respect because if each month has been treated as his only earnings for the year he won't have had any tax deducted.......

Look forward to seeing the figures so we can help you get it resolved Daredevil.

Suewre

I would have thought that before assuming the employer hasn't applied the P45 correctly, the code on the P45 that was supplied to the new employer should be checked. Many a time I have had a client call to ask why an employee was on a certain tax code even though they had supplied a P45, when I have got their file out to check the P45, the code was the one on the P45, so it had been applied correctly, the employee just didn't know what code they had previously been on, so assumed the current one was incorrect.

I have even been asked why there was a student loan deducted when there shouldn't have been, and the employee has ticked box D on the P46. So it isn't always the employer / payroll provider's error.

chrisbur

beartsarah wrote: »

I agree Chrisbur, it would give a much clearer indication of the situation if we had the figures.

810L W1 would indicate that the tax code is being applied cumulatively from the point it was first instigated i.e. June 2012.

The fact that it is still stated as his code is not surprising at all, week 1/month 1 indicates no previous earnings in the year to take account of and a mid year start of income. This would apply to every following month in the year as the cumulative calculation would be based on the point when the week1/month 1. Of course it often depends on the software producing the payslip but I'm not surprised at it being there if the year to date figures from the previous employment have never been taken into account.

It may be they have actually corrected his deductions and he has nothing to worry about. Once the new tax year starts in April the W1 basis will disappear anyway.

The figures will give a much clearer picture of what is going on but there really isn't a need to wait for the end of the tax year (although it's only a few days away!). The last wageslip will give YTD figures for the 2nd employment and the basis of calculation can be derived from that straight away which will give a clear indication of if it has been done correctly or not. The P45 will indicate how his previous employment was calculated as well.

Of course I hope his second employment has been calculated cumulatively in some respect because if each month has been treated as his only earnings for the year he won't have had any tax deducted.......

Look forward to seeing the figures so we can help you get it resolved Daredevil.

"810L W1 would indicate that the tax code is being applied cumulatively"

No this indicates the code is being applied on a non-cumulative basis.

"week 1/month 1 indicates no previous earnings in the year to take account of and a mid year start of income"

No it is used when the previous earnings are not known yet. If it was a mid year start to income then the emergency code could have been used on a cumulative basis, not non-cumulative as it was.

"This would apply to every following month in the year as the cumulative calculation would be based on the point when the week1/month 1"

I have no idea what you are trying to say here.

"Once the new tax year starts in April the W1 basis will disappear anyway."

That bit is correct the non-cumulative code will be carried forward as a cumulative code, unless the tax office issue something different.

"Of course I hope his second employment has been calculated cumulatively in some respect because if each month has been treated as his only earnings for the year he won't have had any tax deducted......."

I am not sure if you really meant to say this but you seem to be getting a bit confused over how PAYE works here. If the second employment was taxed cumulatively then there would have been an underdeduction of tax so not something to hope for. Also there are no circumstances when each month would be treated as the only earnings for the year that is impossible and I have no idea where you got that from.

"The figures will give a much clearer picture of what is going on but there really isn't a need to wait for the end of the tax year"

The reason I suggested waiting for the tax year end was to be sure of getting the full picture especially as we have a week 53 possibly coming up which may affect the OPs figures.