Tax overpayment

Taxingtime

I received a tax overpayment advice from HRMC stating I was owed just under £1000. I was sent sent a cheque and I cashed it. About 2 months later I received another letter stating I had underpayed by the exact amount in the previous letter. The reason for the error was claimed that due to moving jobs both employers had claimed a tax free allowance. Do I have any grounds for an appeal or should I just pay back the amount claimed (still thankfully in the bank)?

Horseunderwater

Assuming that you handed over your P45 from the earlier job to your new employer - they should have used the code that was on the P45 to continue on with the cumulative tax deductions due and those figures should have been on the P60 you got at the end of the year. So what you need to do is look at that P60 and see if the gross less the tax free allowance 2011/12 £7475 or for 2012/13 is £8105 for most people and then any balance of tax due at 20% is less or more than you paid. If the figure agrees with the P60 then yes you will need to repay that £1k back, but if there is a difference then there may be either an underpayment or an overpayment.