Can my employer take extra tax?

patanne

I'm afraid the employer has done the only thing they could do. This is what HMRC would instruct them to do. Because of the way they have badly managed the changeover the employer had no alternative.

This may be stating the obvious, but your dad should check his next pay and make sure they are not continuing with the error into the new tax year or he will have the same problem next March /April.

liney

Ok, so the HMRC have instructed the employer to levy the extra tax that was owed, over the course of this tax year by adjusting his tax code. They have done this: employers do not argue with the HMRC.

If your father thinks he has overpaid, then he should contact the HMRC when his P60 arrives as directed by the HMRC website.

chris_h16

So basically the company is at fault in respect of managing the tax badly.

agrinnall

chris_h16 wrote: »

So basically the company is at fault in respect of managing the tax badly.

Yes, but I'd echo the conclusion of ValHaller's final sentence in post #3.

chrisbur

The employer has made a complete mess of this and has tried to correct it in way that has resulted in extra tax and national insurance being paid.

As I said earlier the employer is quoting two dates on the payslip and what should have happened will depend on which date is correct. To understand the error you need to understand what they should have done. When they converted to four weekly paid they should have used the weekly tax and NI bands with them being multiplied by four, but they carried on using the monthly bands. Had they done this correctly then the final payment would have been treated very differently to the way that they treated it.
If the last payment was due on 5 April then this would have been treated as a week 56 payment. An extra tax allowance equivalent to four weeks at the tax code being used would be given on a non-cumulative basis and a four week NI allowance would be given.
If the last payment was due on 8 April then it should have been paid as week 4 of the new tax year, again getting an allowance for both tax and NI.
As it is no allowance for tax or NI has been given.

Unfortuneately if the tax office check the tax they will check it on the basis of a normal yearly tax allowance they will not give allowance for a week 56 so they will proberbly consider the tax to be correct. I have no idea how they would view the NI. It may be worth making a complaint to HMRC I do not know but definately make sure the new year is being done correctly using tax weeks 4,8,12,16 etc not month 1,2,3,4 etc.

BitterAndTwisted

chris_h16 wrote: »

It's not up to the employer to take the difference from 1 payslip though.

Yes, it is unless your father wants to have unpaid tax and the consequent reduced tax-code carried forward to yet another tax-year.

They needed to regularise the under-deducted tax in the current tax-year or risk having to fund it themselves, and few employers would wish to do that.

They've made a complete hash of the change-over to four-weekly pay and that's unfortunate but your father has been in a position to check that their deductions were correct every month since last August

ValHaller

chrisbur wrote: »

The employer has made a complete mess of this and has tried to correct it in way that has resulted in extra tax and national insurance being paid.

Yes they have made a complete mess of it. But, the mess they have made of it should not result in extra tax or NI AFAICS. What you think is extra tax is just a catchup of tax undercharged since August.

chrisbur

ValHaller wrote: »

Yes they have made a complete mess of it. But, the mess they have made of it should not result in extra tax or NI AFAICS. What you think is extra tax is just a catchup of tax undercharged since August.

Some of it is certainly due to not taking enough tax and NI between changing to 4 weekly and the tax year end and some of it is due to not giving a tax and NI allowance on the last payslip. Regarding what should have happened on the last payslip do you know what the pay date is? The date on last but one payslip is 8/3/2013 so on four weekly suggests paydate of 5/4/2013.

EDIT To put an exact figure on it (or something fairly close) I would need to see all the payslips for the tax year and know exactly what period each payslip was payment for. But even knowing what has been paid more than might have been if pay was done correctly does not guarentee that an adjustment would be forthcoming from HMRC, if a week 56 is involved. HMRC tell employers what to do for a week 56 but if they do the calculation they do not do what they tell employers to do.

chris_h16

I'm still seeing it as them taxing the wage from 8 March twice.
They have took the tax on the payslip dated 8 March, then on the last payslip dated 5 April they have added the gross wage from March and April, then taxed it all, then took off the net wage from March to give £564.10

Holiday£346.64 + CareAssistant£1323.11 - TAX£214.60 - NI£124.32 - MarchWage£766.73 = £564.10

Yet if you look at April payslip as itself without March being added on you get this:

Holiday 44 6.1900 272.36
Care Asssistant 90 6.1900 557.10

so thats gross of 829.46
Put that through the tax calculators on a 4 weekly basis and you get Tax of £55.75 and NI £29.46 leaving a net pay of £744.25 which is about what he usually gets net.


Why is it that:
Putting just April through a tax calculator the tax the company has is correct, but if you adding the gross wage together, shouldn't you be able to add the tax and NI reductions together for the two months also, to get £104.35 for tax and £54.42 for NI

zzzLazyDaisy

If you are right, and he has overpaid tax, this will show on his P60 and he will be entitled to a tax rebate.