Taxable earnings declared in wrong tax year (Asda)

squidgysponge

I too am one of the many UK asda colleagues who's got a £125.80 underpayment come through the door.

It says on the accompanying literature "if you think your employer has not taken reasonable care and has made a mistake, in some circumstances they may have to pay the tax instead of you."

Surely, the inland revenue dropping a £125 tax bill for underpayment on our doorsteps because they can't work out the correct PAYE for literally thousands of employees, especially when they knew damn well in advance we'd get paid 14 times in the last tax year......... I'd say that is not reasonable care!

The inland revenue has told me to contact my payroll department on my wage slip. Guess what, Asda's payroll departments number isn't on my wage slip either.

I guess this is what we've come to expect from them these days eh!

Turns out a company around the corner from asda head office in Leeds does the payroll for them, its called "ceridian".

http://www.payrollworld.com/article/14708/magazine/ceridian-completes-asda-ae-implementation

They have support desks for most companies they do payroll for, but not asda.

http://www.ceridian.co.uk/contact/support-desks/

jem16

squidgysponge wrote: »

Surely, the inland revenue dropping a £125 tax bill for underpayment on our doorsteps because they can't work out the correct PAYE for literally thousands of employees, especially when they knew damn well in advance we'd get paid 14 times in the last tax year......... I'd say that is not reasonable care!

In this case no, Asda is not to blame, apart from not informing you. As far as PAYE is concerned they have followed the correct guidelines laid out by HMRC.

Gas_Powered_Toothbrush

The employer have correctly followed the PAYE instructions sent by HMRC, you have no claim against them.

squidgysponge

How do you know Asda has followed the advice of inland revenue?

I was under the impression HMRC told Asda last year that thousands of employees would end up with an underpayment bill, yet they did absolutely nothing about it, didn't take more tax to cover it and instead allowed it to happen.

I take umbridge at Asda (knowing exactly how inept they are generally in most things), the fact they've now gone one step further and knowingly allowed tens of thousands of employees to pay not enough tax does not make it right, and furthermore it shows a complete lack of care to employees tax matters.

Quite frankly its about dividing tax owed by 14 pay days instead of 13. I'd expect a mistake by a small business but this is an employer of over 175,000 people.

chrisbur

squidgysponge wrote: »

How do you know Asda has followed the advice of inland revenue?

I was under the impression HMRC told Asda last year that thousands of employees would end up with an underpayment bill, yet they did absolutely nothing about it, didn't take more tax to cover it and instead allowed it to happen.

I take umbridge at Asda (knowing exactly how inept they are generally in most things), the fact they've now gone one step further and knowingly allowed tens of thousands of employees to pay not enough tax does not make it right, and furthermore it shows a complete lack of care to employees tax matters.

Quite frankly its about dividing tax owed by 14 pay days instead of 13. I'd expect a mistake by a small business but this is an employer of over 175,000 people.

Asda did exactly what the tax office instruct them to do. They followed the instructions laid down in the guidance books that they are given by the tax office. As has been said Asda were not to blame except perhaps in not warning that this was going to happen.

mttylad

The bill my wife has received is about the same as all the tax she has paid in the last year, £129 ish.

AND the form that she has with is says that they cannot adjust her tax code for it to be collected next year.
This is equal to about a weeks wages.
Yet she has worked there for 5 years and it has never happened before - why?

My son has a £85 bill too.

This is disgusting behavior on Asda's part for not informing their employees when they will have known about it. They may have followed the HMRC guidance but if they knew about it - shame on them (but typical of them).

And they could at least inform their employees now all about it and arrange for a resolution - but in typical Asda house style - they are doing nowt about it. Scuddy will be getting bent ears over it when members complain.

squidgysponge

Well, if that is the case then why are we not hearing of other companies with 4 week paydays having the same issue?

What did center parcs, for example do, to get around the issue? I'm yet to hear of anyone working for them who's got a tax underpayment letter, yet they get paid 4 weekly just like Asda employees.

jem16

squidgysponge wrote: »

How do you know Asda has followed the advice of inland revenue?

Read Page 16 of this HMRC guideline. It lays out clearly what should happen when a Week 53, 54 or 56 happens.

http://www.hmrc.gov.uk/guidance/cwg2.pdf

This is exactly what you have all described has happened.

I was under the impression HMRC told Asda last year that thousands of employees would end up with an underpayment bill, yet they did absolutely nothing about it, didn't take more tax to cover it and instead allowed it to happen.

Asda could do nothing about it except inform its employees that it was going to happen. They simply cannot just adjust wherever they feel like it.

Quite frankly its about dividing tax owed by 14 pay days instead of 13. I'd expect a mistake by a small business but this is an employer of over 175,000 people.

Unfortunately it isn't about simply dividing by 14 instead of 13 as PAYE doesn't work like that.

jem16

mttylad wrote: »

The bill my wife has received is about the same as all the tax she has paid in the last year, £129 ish.

AND the form that she has with is says that they cannot adjust her tax code for it to be collected next year.

She will be one of the workers where it cannot be coded out in the next tax year as she doesn't earn enough to pay tax normally. She will be earning around the personal tax-free allowance.

Yet she has worked there for 5 years and it has never happened before - why?

For 4 weekly workers this only happens every 22 years. It's because the calendar year is 365 days and 4 weekly pay only covers 364 days.

Scuddy will be getting bent ears over it when members complain.

He's already posted in the Employment board and asks GMB members to get in touch.

squidgysponge wrote: »

Well, if that is the case then why are we not hearing of other companies with 4 week paydays having the same issue?

What did center parcs, for example do, to get around the issue? I'm yet to hear of anyone working for them who's got a tax underpayment letter, yet they get paid 4 weekly just like Asda employees.

It's simply because not everyone that is paid 4 weekly is on the exact same payday. I'm paid 4 weekly (unfortunately as I was forced off monthly pay by my local council) and I'm not affected. I believe my 14th pay tax year is around 2030 when exactly the same thing will happen.

patanne

I'm sorry to disagree with so many who normally get it spot on, but there is no excuse for having to send 175000 employees of Asda a tax bill for £125. As everything is now computerised it should have been quite possible to figure out that (as they already knew and warned Asda) there would be 14 pay periods in the tax year and to sort the software accordingly. What a cop out on the part of both HMRC & the payroll company. At the very least they should have been suggesting to the employees that they save £10 per pay period to cover the short fall & not just wait for them to get the "pay it now or else bill".