Underpaid Tax - Employer error?

Saria

Hi everyone,

I need some help. I received a letter today from HMRC saying that I have underpaid my taxes for the year 2014-2015. As I was under the impression that my employer should be taking care of my taxes, I was very confused by this.

They have told me that I owe them £335.60. The letter claims that my total income that tax year was £14257 and the tax I paid was £515.80, however the tax paid should have been £851.40.

I have had a look at my P60 for that tax year and it says on there that my income was £11225 and tax paid £243. So this doesn't correspond with the information from the letter. However, I realised that I had switched jobs at the start of May, so some of my income would have still come from my old job. However, this was not listed on my P60.

I have had a look at my P45 from my old job and it says on there that my total pay when I left was £3032.33 and tax paid was £272.80. So when I total everything up, that comes to the numbers HMRC are listing.

Now my question is, what can I do about this? My current employer did not list my previous income on my P60. Does that mean they miscalculated something? Or should I have received a new tax code from HMRC? Where is the error and what can I do about this? I know nothing about the English tax system (originally from Belgium) and have never had to deal with anything like this, so I am not sure what to do. Do I tell my employer and should they be the one to sort it out?

Thanks for any help!

Savvy_Sue

Did you give your new employer your P45? It comes in three parts: you keep one and pass the other two on.

If you did not do so, then I'd say it was definitely your fault not your employer's.

If you did hand it in, and they failed to act on it, it might be their fault but I suspect it's still you who has to pay, because it's still you who owes the tax.

And your employer may 'take care' of your tax, but only in so far as they deduct what they know to be owed from your employment. Since they know nothing about what other income you may have, they are not responsible for ensuring that you pay everything you owe. You have to check that the information you are given is as it should be.

Saria

blondebubbles wrote: »

Did you get the new employer your P45?

Pretty sure I did as I only have one of the 3 parts here (it says to give the other parts to your new employer). I did only receive the P45 a week or two after I started my new job though, not sure if that matters. And both jobs used the same tax code (1000L).

Saria

Savvy_Sue wrote: »

Did you give your new employer your P45? It comes in three parts: you keep one and pass the other two on.

If you did not do so, then I'd say it was definitely your fault not your employer's.

If you did hand it in, and they failed to act on it, it might be their fault but I suspect it's still you who has to pay, because it's still you who owes the tax.

And your employer may 'take care' of your tax, but only in so far as they deduct what they know to be owed from your employment. Since they know nothing about what other income you may have, they are not responsible for ensuring that you pay everything you owe. You have to check that the information you are given is as it should be.

I did hand the P45 to them. Thing is, they don't seem to be very good with money/taxes etc. It took them over a year to give me payslips, and I had to actively ask for my P60. And over the last half a year, they have been late with my payments (only now are they starting to catch up again, after being close to 3 months behind at some points). I am their only employee so they pretty much knows what goes on in my life, and they know I don't have any other jobs (full-time in this one).

If you think I will be the one who has to pay the money anyway, is there any point then in me contacting my employer about this or HMRC? Just not sure what to do.

sheramber

from your P60 figures ot looks like your employer treated your earnnings with them as your total income for the year and have given you your whole year's personal allowance against that income.

11225 - 10000 = 1225 x 20% = 245

They have not taken your previous pay and tax into account, nor the fact that you have only worked for them for part of the year hence you have not paid the correct amount of tax.

jem16

Saria wrote: »

If you think I will be the one who has to pay the money anyway, is there any point then in me contacting my employer about this or HMRC? Just not sure what to do.

You do owe the tax so it's best just to pay it.

Although you did hand in your P45 the figures don't appear to have been used so you have received more tax-free allowance than you should have.

Ultimately you are responsible for checking that your tax is correct I'm afraid.

HMRC will code it out for the next tax year so you will pay back a little each month.

Saria

jem16 wrote: »

Ultimately you are responsible for checking that your tax is correct I'm afraid.

Which is difficult to do when you are not provided with payslips, despite asking for them every month...


Thanks for the info everyone.

jem16

Saria wrote: »

Which is difficult to do when you are not provided with payslips, despite asking for them every month...

No I realise that and by law you should have one every payday.

You may need to consider moving jobs to somewhere who does what they should do.

patanne

I too think moving jobs would be a good idea. An employer who doesn't think it is important to pay an employee on time is not one to be depended on. Have you checked if you have paid too much NI. It is possible that if they are paying you late they may be paying 2 months together which will not affect how much tax you pay altogether but you will pay too much NI.