Employer messed up my income tax

chalky2011

xylophone wrote: »

This indicates that there are items requiring review by HMRC.

If you examine all your chits for the past four tax years, does a T code appear frequently?



The responsibility for checking that you have paid the correct amount of tax does rest with you - did you not notice unexpected fluctuations in your salary?

http://www.thisismoney.co.uk/money/bills/article-2174956/Taxman-set-make-YOU-responsible-checking-tax-code-leaving-risk-shock-bills.html

I very rarely look at my payslip anyway and HMRC did explain yesterday that the T meant I was being reevaluated on this particular payslip as I say I accept the tax lies with me but I had no clue about any problem until yesterday

xylophone

I very rarely look at my payslip anyway and HMRC did explain yesterday that the T meant I was being reevaluated on this particular payslip as I say I accept the tax lies with me but I had no clue about any problem until yesterday

So much money sloshing about that you don't need to bother?:)

I think that the point is that like it or not, (and accepting that your Payroll Clerks may be less than efficient), HMRC may well take the view that you should be au fait with your tax affairs, check regularly and query any oddities?

chalky2011

xylophone wrote: »

So much money sloshing about that you don't need to bother?:)

I think that the point is that like it or not, (and accepting that your Payroll Clerks may be less than efficient), HMRC may well take the view that you should be au fait with your tax affairs, check regularly and query any oddities?

I accept your point but let's be honest what percentage of the working population on PAYE regularly look at their tax codes? The only way you would notice and perhaps check was if there was a dramatic increase or decrease in you take home pay. The money I owe is because of errors out with my control and it will be paid back but I still feel my payroll dept have been the biggest contributors to this problem. I hold my hand up and admit to being naive and I definitely don't understand the intricacies of the tax system I just wanted some advice and I think I have got that through this forum,so thanks to all of you.

xylophone

I accept your point but let's be honest what percentage of the working population on PAYE regularly look at their tax codes?

I think that it is likely that most don't check (when I was young and naive I didn't!) but they probably would if there were unexpected discrepancies - for example, usually receiving net income of £1000 a month and then finding one month that only £800 had been paid.

That said, I think that it behoves those with BIK (or those who salary has sharply increased/decreased, or those with more than one source of income) to be rather more vigilant because of the potential for under or over payment.

Kiwi_g

The politicians and civil servants in their wisdom have made everything so complicated luckily, as an accountant, I have a little knowledge on personal tax.

I retired at the end of April (4 years after my 65th birthday) and up to then, my (6, mainly small) pensions were taxed on a BR tax code and any unpaid tax on my state retirement pension (SRP) was collected via the tax code from my employer.

Post retirement, the tax code on my largest pension was adjusted to collect tax connected with my SRP. I realised in April that this pension was still being taxed at BR. The insurance company insisted that HMRC had not sent them any notice re a code change. A call to HMRC confirmed that on checking the RTI returns, they were indeed using a BR code but HMRC said that the new tax codes (there was more than one change) had definitely been sent to the pension payer. I asked if it was possible to tell the pension payer that they were using the wrong tax code.

The next complication is that I took a pension drawdown in May which was taxed on an emergency code (1100L month 1) even though I offered to send a P45 showing a BR tax code. The HMRC computer assumed that this lump sum was going to be paid every month and gave me a very high K code. My tax code had previously been set to recover £50 unpaid tax for 2014-15 but this then dropped out as it would have been impossible to collect it from the estimated pension. I then corrected my 2016-17 income on line and was issued with a new tax code but I did not spot that the unpaid tax was not now being collected through the code number. I then received a demand for payment. I phoned HMRC this weekend (got through without any problems or long delays) and explained the situation. The gentleman was very pleasant and said that he did not understand what had happened. He phoned back within 10 minutes (saying that the call would be recorded and I replied that I was very happy for that) and he said that once the under payment had fallen out of the tax code calculation, it would not normally be possible to reinstate it. He said that he would put the £50 underpayment back into the code number adjustment but it would initially affect the 2017-18 tax code as normally once removed, it could not be reinstated!! He then said that he would then try to reverse this for 2017-18 and try to put it back into 2016-17.

Once this is sorted and the pension payer starts using the correct tax code I can then try to claim a refund on the excess tax taken from my drawdown which I believe is done on a form P55.