Correct tax code but paying too much tax

Polarbeary

Hi,

I have recently changed jobs, handed in my P45 etc.

My payslip is showing my tax code to 1000L but I've been charged too much tax!

Salary is £32,000, according to the tax calculator I should be on £2,059.56 after tax, instead I had £1888 as take home pay. So around £171 excess tax as this was showing as £537.67 tax on my payslip!

I rang the HMRC office and the lady at first said "what makes you think it's too much tax, the tax code is right?" Um because I'm making more money than my old job but only earning an extra £40 a month more and the tax calculators gave me an indication of what I should be earning?

She then went on to say "oh yes, you paid too little tax so they have clawed this back." Couldn't tell me anything more expect it should be back to normal next month...

Are they allowed to take money from my pay directly without informing me that I even owe any money? I have written them a letter but from experience they take weeks to get back...is there anything else I can do?

Thanks.

chrisbur

Polarbeary wrote: »

Hi,

I have recently changed jobs, handed in my P45 etc.

My payslip is showing my tax code to 1000L but I've been charged too much tax!

Salary is £32,000, according to the tax calculator I should be on £2,059.56 after tax, instead I had £1888 as take home pay. So around £171 excess tax as this was showing as £537.67 tax on my payslip!

I rang the HMRC office and the lady at first said "what makes you think it's too much tax, the tax code is right?" Um because I'm making more money than my old job but only earning an extra £40 a month more and the tax calculators gave me an indication of what I should be earning?

She then went on to say "oh yes, you paid too little tax so they have clawed this back." Couldn't tell me anything more expect it should be back to normal next month...

Are they allowed to take money from my pay directly without informing me that I even owe any money? I have written them a letter but from experience they take weeks to get back...is there anything else I can do?

Thanks.

The most likely explanation is that your first salary in your new job has fallen in the same tax month as your last salary in your old job. This will result in you having thirteen salary payments in this tax year; as your tax allowance gets divided by 12 for each month one of your payments does not get a tax allowance so extra tax is deducted for that payment and returns to normal the next payment. Check the month number on your P45 part 1A and the month number on your payslip to see if they are the same.

If month number not the same or cannot check advise from p45 gross, tax and tax code and from payslip gross, tax, tax code, taxable gross to date and tax paid to date.

molerat

How long have you been in the new job ?
Have you got the pay slips for both jobs ?
Has the last one from the old job and the first one from the new job got the same month number ?

The amount of tax you have "overpaid" is around the right amount of tax on your monthly tax free amount, often when you change jobs you will get paid twice in the same pay period so that month's allowance has been used up in the old job.

Polarbeary

Thanks, will gather various bits of info and post back...

purdyoaten

I would put a lot of money on the explanation provided by chrisbur - a common occurrence.

The explanation provided to the op by HMRC is depressing!

Polarbeary

The month number on my P45 part 1A and the month number on last months payslip are both month 6.

This month was my second pay and was month 7.

chrisbur

Polarbeary wrote: »

The month number on my P45 part 1A and the month number on last months payslip are both month 6.

This month was my second pay and was month 7.

I assume that the extra tax was deducted from your salary for month 7.
The explanation is the same as I suggested in my first post but it took a while to correct itself.
Month 6 ran from Sept 6 to Oct 5 and you were given your month 6 tax allowance by your old employer for your salary that was paid at some point between these dates. Your new employer did not have your P45 when they were making your first salary payment which also fell within Sept 6 to Oct 5 so they would have asked you for details for a new starter declaration and put you onto an emergency tax code. This would give you another tax allowance for month 6 so you had at that point had 7 salary payments and 7 tax allowances bur were only up to month 6.
Your P45 is then entered into the system and the tax now corrects itself so that when you are paid for month 7 there is no tax allowance left so all you earn that month is taxed. Month 8 will then be back to normal.

At the end of the tax year you will have received 13 payments with only 12 tax allowances to cover them so one has to go without an allowance.