NHS, 2 roles, same health board, 1 lease car, a useless wages dept and a wrong coding

TheCat_2

Hi all,

My wife is getting really stressed after going round in multiple circles trying to get a sensible answer to an artificially low tax code.

You'll know the scenario ... Wages blame HMRC, HMRC blame wages and all the time she continues to get almost weekly notice of coding updates.

The problem seems to stem from the fact she works 5 days a week in a 3:2 ratio across 2 NHS community roles (for the same health board).

Because of the mileage involved the roles are eligible for an NHS lease car which is not a company car but rather a subsided car,deducted at source from salary.

We have use of the car at weekend and that obviously results in a P11D benefit.

Why the health board can't combine the roles (as far as HMRC are concerned) is beyond me, but they issue two separate payslips - each of which has its own code.

Then HMRC (using info provided by the Health Board) seem to be incorrectly classing the car as a company car - it is not! Additionally they seem to be deducting a whole adjustment against each part of my wife's salary ie double counting the car (as if she's got 2) rather than pro-rating any P11D benefit across the 2 roles in a 3:2 ratio?

The latest coding - arriving today - is 13L as HMRC seemingly want to recover an underpayment for 12/13 via a 13/14 coding adjustment.

Apologies for length of post - if more specific info is needed eg dates of role changes or car allocation etc we can get this together

For info both roles equate to approx £33kpa and both roles are PAYE

Hope someone can point us in the right direction?

jem16

TheCat wrote: »

Why the health board can't combine the roles (as far as HMRC are concerned) is beyond me, but they issue two separate payslips - each of which has its own code.

What are the 2 tax codes? You mention one of them being 13L but what about the other?

Can you give information as to how the 13L tax code is being made up?

How much does each job pay?

Then HMRC (using info provided by the Health Board) seem to be incorrectly classing the car as a company car - it is not! Additionally they seem to be deducting a whole adjustment against each part of my wife's salary ie double counting the car (as if she's got 2) rather than pro-rating any P11D benefit across the 2 roles in a 3:2 ratio?

What amount is listed on the P11D?

TheCat_2

Hi Jem

jem16 wrote: »

What are the 2 tax codes? You mention one of them being 13L but what about the other?

The coding received today is for 14/15 and has a value of 13L
The coding received last week also 14/15 is 293L

Can you give information as to how the 13L tax code is being made up?

13L is broken down as follows:-

PA - £10000
Flat Rate Job Exp - £100
Job Expenses - £18
Prof Subscription - £295

Subtotal £10413

Less

Car Benefit £3303
Underpayment Restriction £6979

Subtotal £10282

Tax Free Amount £131

The 293L is broken down :-

Same allowances £10413

Less

Car Benefit - £3303
Underpayment restriction - £4177

Subtotal £7480

Tax free amount £2933

Last years codings (13/14) were:-

680L and BR respectively so it looks like last year they applied the whole allowance to the major (3 day) role?

680L =

£9440 + 100 + £18 + £295 = 9853

Less

Car Benefit £3052 = £6801

This replaced an 845L where car benefit was shown as only £1396

How much does each job pay?

Tax year to Apr'13

Role 1 paid £25982.40Gross (PAYE of £3780.60)
Role 2 paid £2056.32Gross (PAYE of 409.60)

Last pair of payslips I can find (Nov'13)

Role 1 £1806.27Gr (£1060.26Net)
Role 2 £1047.41Gr (715.80 Net)


What amount is listed on the P11D?

P11D for 12/13 Shows :-

Car 1 Ford C Max

List Price £25075
Amount Paid by employee £0
Cash Equivalent £2093

Car 2 Ford C Max

List Price £25075
Amount Paid by Employee £3215.99
Cash Equivalent £2802.00

Total Cash Equivalent £4895

There is however and always has been only 1 car !!

Thanks in advance...

TheCat_2

Surely a car that you pay £3215.99pa towards, has then not got a further P11D benefit of £4895?

For £8020 you could buy, insure, tax and mot a runaround and claim a higher ppm in expenses...

xylophone

an NHS lease car which is not a company car but rather a subsided car,deducted at source from salary.

This type of thing?
http://www.tamesidehospital.nhs.uk/documents/AffordableCarSchemeFAQs.pdf

Could your wife not write to HMRC detailing the exact circumstances and get a ruling and correct tax code(s)?

TheCat_2

xylophone wrote: »

This type of thing?
http://www.tamesidehospital.nhs.uk/documents/AffordableCarSchemeFAQs.pdf

Could your wife not write to HMRC detailing the exact circumstances and get a ruling and correct tax code(s)?

Hi,

Yes that's the sort of scheme she's in although there may be nuances between health boards.

Writing to HMRC is a possible next step but the tax office have already told my wife they only use the info provided by her employers?

I was hoping someone experienced could overview the calcs and provide maybe 1 or 2 keys points on which to challenge the 'underpayment' HMRC say is owed

xylophone

I notice from the FAQs relating to the Tameside Scheme (page 6)
that " the car is a company car for tax purposes and will be treated as a benefit in kind".

I also note that under this scheme, (p9 Q18) it is possible to have two cars.


If your wife's scheme is the same ( is a booklet like the above produced, if so read it carefully), then she too could have two and it looks as though the employer has reported that this is the case ( the confusion has arisen because of the two jobs)?

She should make an appointment with the pay roll administrator to thrash this out and then write to HMRC?

jem16

TheCat wrote: »

Hi Jem

The coding received today is for 14/15 and has a value of 13L
The coding received last week also 14/15 is 293L

Both of these are presumably for the same employment - the main one?

Has the 2nd job still got the BR tax code?

P11D for 12/13 Shows :-

Car 1 Ford C Max

List Price £25075
Amount Paid by employee £0
Cash Equivalent £2093

Car 2 Ford C Max

List Price £25075
Amount Paid by Employee £3215.99
Cash Equivalent £2802.00

Total Cash Equivalent £4895

There is however and always has been only 1 car !!

Thanks in advance...

Does she use the same car on both jobs or does she only have the use of it on one job?

I'm not sure what figures are used for the car so couldn't really say if they are correct.

However if both have exactly the same List Price, I would have expected the Cash equivalent to be the same which they are not presumably because your wife pays part of it in one job but not the other?

First step is to contact the NHS payroll to see how they have worked out the P11D figures and if indeed they are counting it twice or if it is being worked out on a pro rata basis.

TheCat_2

Thanks both for the input so far.

Jem -

Last year my wife had one allowance for the main role and a br code for role 2

This year there is no br code so it seems the two codes relate one to each role.

She only has one car and uses it for both roles - it's deducted in full and at source from the larger salary component so by my reckoning no reference needs to be made to 'a car' against her role 2 and it's been paid for by role 1?

Xylophone -

I agree with you and recommended last night she push for a face to face appt with a wages dept mgr. There is only one car and my belief is they're counting it twice.

jem16

TheCat wrote: »

Thanks both for the input so far.

Jem -

Last year my wife had one allowance for the main role and a br code for role 2

This year there is no br code so it seems the two codes relate one to each role.

I don't think so as the detail you posted showed the full £10k allowance on both and that wouldn't happen with a split tax code. If they were to use those two codes your wife would get her allowance twice. It looks like they've just updated the earlier one as the underpayment has changed.

I suspect the 2nd one is still BR but there's no need to tell you as it's staying the same.

She only has one car and uses it for both roles - it's deducted in full and at source from the larger salary component so by my reckoning no reference needs to be made to 'a car' against her role 2 and it's been paid for by role 1?

The NHS may have to list it separately though as it's being used in both roles. It may be apportioned correctly but I don't know what figures HMRC use.

Surely a car that you pay £3215.99pa towards, has then not got a further P11D benefit of £4895?

For £8020 you could buy, insure, tax and mot a runaround and claim a higher ppm in expenses...

Not quite accurate. The £4085 is an allowance not the actual amount. It's taxable at 20% so £817 extra on top of the £3215.99 that your wife pays.

You really need to get the NHS to explain the P11D as your assumption of 2 cars may not be correct.

xylophone

I agree with you and recommended last night she push for a face to face appt with a wages dept mgr. There is only one car and my belief is they're counting it twice.

This is the way it looks but in view of the lack of clarity, an appointment with the payroll administrator is essential?
http://www.employeebenefits.co.uk/benefits/company-cars-and-fleet/salary-sacrifice-car-schemes-explained/100751.article You might find this of interest.