Employer didn't change my tax code

Angryannie

I have just received a tax demand from HMRC for tax year 2015/16. I was surprised as I am PAYE and expected my tax affairs to be up to date.

Looking into this it seems my employer has failed to change my tax code for the past couple of years! Didn't even think to check as nothing had changed anyway and I have a company car so assumed that the rise in personal allowance was balanced out by the rise in BIK hence no real change in take home pay.

This year (July 2016) my car was changed. I notified HMRC the minute i had the BIK informations (august) I waited a couple of months for the change to be applied to my wages and it wasn't. I assumed the coding notice to my employer may have gone stray (I had mine) so requested another to be sent. Again I got my notice but employer still didn't change my tax code. I hoped this would all be sorted out in April when the annual tax code change is sent out for all. But still my employer has not changed my code......I am now kicking up a fuss with them!

Now i have this underpaid tax demand (P800) for tax year ending 2016. When I have looked into what the underpayment has occurred (at this point I hadn't change car so no change in BIK details held by HMRC) it seems my tax code has remained the same for the past 2 or more tax years!!!!!!

Should I have told my employer to change this when i recieved notices? I thought HMRC sent one direct to my employer and they could only change my code upon receipt of the notice direct from HMRC? It appears my employer has not actioned these coding notices, even for the start of each new financial year when nearly all employees have a change of code.

I know I should have been more alert and kept an eye on my tax code but I wrongly assumed that PAYE always worked and all my tax was being paid. This is a fair assumption as my employment status and BIK had not changed so all should have been straight forward.

My employer clearly did not fulfil their responsibility to run PAYE correctly and amend tax codes when required and for the new tax year!

Can I get HMRC to chase them for the underpayment to April 2016?

I still have the tax from July 2016 to present to reconcile because again my employert has not actioned the change in tax code due to a change in company car!

I thought everything was electronic now a days eliminating any errors and find it appalling that my employer has not updated my tax code for a number of years:mad:

Any advice appreciated.

TadleyBaggie

Angryannie wrote: »

Can I get HMRC to chase them for the underpayment to April 2016?

Good luck with that. Whatever the reason for the underpayment, you will be pursued for the unpaid amount.

Dazed_and_confused

What about your responsibility to ensure your tax code is correct?

At the end of the day all you're being asked to pay is the tax that possibly should have been deducted back in 2015 or early 2016. If you pay up promptly you likely won't be charged interest and you may even be able to pay it off by an adjustment to your tax code next year so some tax due in April 2015 might not actually by paid until March 2019! Nice interest free loan really.

Angryannie

I have seen information on employer error when they are not running paye correctly. Would this not fall into that category? Or does that no longer exist like many a things in HMRC that use to protect the tax payer ��

Angryannie

I understand I should have checked, certainly will do in the future. I was safe in my PAYE bubble assuming my employer had a competent payroll department.

Can't believe they would ignore so many code notifications! Surely a problem with their system. Surely I shouldn't have to ask them to change my code, this is meant to be done in the say so of HMRC isn't it?

Dazed_and_confused

Does it say anything on the calculation, or notes which accompany it if they still exist?

Am I correct in thinking that if the result of these errors (if they are errors) was that you were now due a tax refund you wouldn't accept it on the same principles?

Pennywise

HMRC's system isn't fit for purpose.

I've had clients tell me about a paper coding notice they've received from HMRC, which simply isn't on HMRC's own system when I log in to Govt Gateway to check it on their self assessment account or employer's PAYE account.

It doesn't surprise me at all if your employer hasn't received a coding notice (either electronically or on paper) despite you receiving your copy.

But regardless, it's your responsibility to make sure the right tax code is being operated. You're not out of pocket and there's no justification for trying to wriggle out of paying. If the code had been right, you'd have had less net pay. You've enjoyed an interest free loan. Now is the time to pay it back. Your best bet is trying to get it collected over several months.

Angryannie

Dazed and confused I was self employed for years so always paid my taxes and had an accountant. When I went to paye I assumed the need for an accountant was no longer as employer payroll department would do it all for me. How wrong I was.

If it was a dubious refund I would still question it and yes I would still be annoyed that my employer hadn't changed my tax code and my wages were incorrect.

What actually do you have to do to get them to change it if they are not actioning HMRC coding notices. And why should they not be repremanded for not doing what is expected of them.

agrinnall

Despite all your diatribes against HMRC you don't mention anywhere what your employer has to say about this. Have you actually raised the issue with them, and what reason do they give for not having applied tax code changes? Do you know if this has happened to any other employees or is it just you?