I owe the taxman, question

palmtree89

Hi,

Long story short, in December 2013 I left an employer and started another job. I had handed in a resignation letter to my previous employer clearly stating I was leaving on a specific date and would not be working for the company anymore.

For the following few months I was getting two payslips; one from the new employer and one from my old employer. The payslip from the old employer said I had worked no hours but it gave me tax back. This happened for 3 months until April, where they finally sent me my P45 and the payslips stopped.

Clearly they had kept me on their payroll for some reason, despite me making it clear I had stopped working for them and hadn't worked for them since handing in the letter. I'm assuming they kept me on their payroll as I was a zero-hour employee. Due to their mistake of keeping me on the payroll I kept getting this tax back, which I wasn't entirely sure if it was a mistake or I was owed tax. Either way, I kept it separate in case they wanted it back.

4 months go by and nothing, so I paid my car insurance off with that money as I assumed it was all fine. I got a letter today from the tax man telling me I owe them £475.

My question is, is my previous employer at fault in any way? They should have taken me off their payroll once I had resigned. I perhaps should have rang them up to tell them, but why should I chase them around sorting out something they should be doing?

Second thing, it doesn't specify how I pay it back. I have a massive £200 in my bank account, which will all be spent on bills by the end of the month. I can't afford to pay it back in one go. Will they take it out of my wages month by month?

Don't you just love these extra stresses on an already stressful life. No wonder people top themselves with money problems.

notanewuser

Nope. Your tax affairs are your own issue. Did you speak to anyone about it during the 3 months that you were getting these refunds?

fannyadams

does this help?
http://www.hmrc.gov.uk/payinghmrc/problems/cantpay.htm

CKhalvashi

Call them and negotiate a payment plan, which can be done through your employer.

ALWAYS negotiate early and fairly, as if you open negotiations now, you'll probably get until the new tax year (so probably 7 paydays) to sort it out with them.

I've always found that if you're fair with HMRC, they'll be fair with you.

Anatidaephobia

Phone them to discuss your underpayment. If you're currently employed and earning enough, they'll be able to put a deduction through your tax code for 2015/16 which will mean you'll pay extra tax each month during that year (about £40 extra a month, assuming you're paid monthly). If you're not employed or your earnings are too low to accommodate an underpayment in the code, you can see up a payment plan over the phone. You won't have to pay it back all in one go; you just need to phone them to discuss options.

Spidernick

Anatidaephobia wrote: »

Phone them to discuss your underpayment. If you're currently employed and earning enough, they'll be able to put a deduction through your tax code for 2015/16 which will mean you'll pay extra tax each month during that year (about £40 extra a month, assuming you're paid monthly). If you're not employed or your earnings are too low to accommodate an underpayment in the code, you can see up a payment plan over the phone. You won't have to pay it back all in one go; you just need to phone them to discuss options.

Agreed. HMRC will usually collect underpayments of up to £3,000 via a tax code for employees, as long as you are earning sufficient to pay tax.