Tax bill, who is liable?

TyreLever

Just got a £70 tax bill, so its not really an issue, especially considering I have had 2 rebates of several hundred pounds in the past. This seems to prove that employers are not getting my tax right in the first place. Some people have ended up with a tax bill of thousands. If this happened to me I would be beyond furious.
I like how they state "you have paid too little tax". I have absolutely no control over my tax payments, my employer deducts this from my pay. So can employers be liable for tax bills that they should have had right in the first place? If not, how do I avoid coming a cropper?

The amount of tax I pay is close to what it says I should pay here:
https://listentotaxman.com/

However I just checked 2 payslips. I earned the same wage both weeks, but there is a 20 pence difference in the tax paid. What the??

anselld

It is your tax, your liability.
Check your tax code is correct ...
https://www.gov.uk/tax-codes

pelirocco

Its not your employers ,they have no control over the tax codes they are told to use. You need to check with HMRC what tax codes they have been telling your employer to use and where has the underpayment arisen.

chrisbur

TyreLever wrote: »

]However I just checked 2 payslips. I earned the same wage both weeks, but there is a 20 pence difference in the tax paid. What the??

Cannot comment on where any fault may lay on the extra tax due without seeing full details; but can explain the 20P difference.

Each month tax is calculated by working out the tax due on your total earnings to date but only using the full pounds. Tax already paid is then deducted to get the tax due that month.
So if you were paid £2222.44 a month and to keep the figures simple you had a tax allowance of £12000.00 per year (ie it goes up £1000 a month)
Month 1 tax due on 1222.44 so using round pounds tax is due on £1222 which is £244.40
Month 2 tax due on 2444.88 so using round pounds tax is due on £2444 so £488.80 less £244.40 paid so far gives £244.40
Month 3 tax due on £3667.32 so using round pounds tax is due on £3667 so £733.40 less £488.80 paid so far gives £244.60
And so on with the pence building up each month until it is enough to make the extra 20p

TyreLever

pelirocco wrote: »

Its not your employers ,they have no control over the tax codes they are told to use. You need to check with HMRC what tax codes they have been telling your employer to use and where has the underpayment arisen.

My tax code is on my payslip. God knows where the underpayment was in this case, my letter shows 5 different employers (some are for varying agencies for the same client). Hoping it wont be a problem in the future as I now have a full time permanent job.

chrisbur wrote: »

Cannot comment on where any fault may lay on the extra tax due without seeing full details; but can explain the 20P difference.

Each month tax is calculated by working out the tax due on your total earnings to date but only using the full pounds. Tax already paid is then deducted to get the tax due that month.
So if you were paid £2222.44 a month and to keep the figures simple you had a tax allowance of £12000.00 per year (ie it goes up £1000 a month)
Month 1 tax due on 1222.44 so using round pounds tax is due on £1222 which is £244.40
Month 2 tax due on 2444.88 so using round pounds tax is due on £2444 so £488.80 less £244.40 paid so far gives £244.40
Month 3 tax due on £3667.32 so using round pounds tax is due on £3667 so £733.40 less £488.80 paid so far gives £244.60
And so on with the pence building up each month until it is enough to make the extra 20p

Oh. It took me a bit to get my head around the gist of that. Numbers always made my head hurt.

At the end of the day it is my employers duty to deduct the correct tax. Unless I done something fraudulent, or deliberately witheld something from my employer, I dont understand how it can be my fault. Makes me a bit paranoid thinking I could one day end up with an unexpected demand for 7 grand or something. I know people who this has happened.

I also use one of the tools linked to in the first reply. Seems to tally up correctly based on what I know. But you know how this government works...

Dazed_and_confused

It is your employers responsibility to deduct the correct tax for the tax code they are using, whether that is one sent by HMRC or from a P45 you have handed over to them or based on a starting employment declaration you have completed for them.

It is your responsibility to ensure that the tax code they are using is correct.

Pennywise

Your employer can't possibly know your full circumstances anyway. All they can do is deduct tax/nic according to your P45/tax coding notice. They'll never know anything more than the details on your latest P45 or coding notice. For people who have a number of different employers during the year, there's always going to be the risk that something goes wrong. For those people, you need to keep tabs on things yourself, i.e. make sure you get a P45 for each different employer and make sure it's given to the next new employer straight away, AND keep HMRC informed with your job changes if you think something is going wrong.

chrisbur

TyreLever wrote: »

My tax code is on my payslip. God knows where the underpayment was in this case, my letter shows 5 different employers (some are for varying agencies for the same client). Hoping it wont be a problem in the future as I now have a full time permanent job.



Oh. It took me a bit to get my head around the gist of that. Numbers always made my head hurt.

At the end of the day it is my employers duty to deduct the correct tax.

I also use one of the tools linked to in the first reply. Seems to tally up correctly based on what I know. But you know how this government works...

If you want to know what has happened you have to give the full details. With the full details someone can explain what caused this.

Sorry but understanding tax will always involve getting your head around numbers.

Most tax calculators on the internet have limited use. There are circumstances when the answer they give will be wrong and only by understanding PAYE can you understand what is happening when they give a wrong answer.

If you want the answer I suggest that to start with you give the details of tax code (was there an X after it) week/month number, taxable gross and tax paid ( both sets if two are showing) for each employment from the part 1A of the P45 for all jobs left during the tax year and similar from P6 for any still employed at the tax year end. If any P45s P6s not available then from last payslip.
Then details as shown on the letter from HMRC advising under-payment.

Intoodeep

TyreLever wrote: »

Just got a £70 tax bill, so its not really an issue, especially considering I have had 2 rebates of several hundred pounds in the past. This seems to prove that employers are not getting my tax right in the first place. Some people have ended up with a tax bill of thousands. If this happened to me I would be beyond furious.
I like how they state "you have paid too little tax". I have absolutely no control over my tax payments, my employer deducts this from my pay. So can employers be liable for tax bills that they should have had right in the first place? If not, how do I avoid coming a cropper?

The amount of tax I pay is close to what it says I should pay here:
https://listentotaxman.com/

However I just checked 2 payslips. I earned the same wage both weeks, but there is a 20 pence difference in the tax paid. What the??[/QUOTE]


I think you'll find it's called rounding up/ down, quite simple, but if you want to think that HMRC are fiddling you out of the cost of an envelope then carry on ?

TyreLever

Intoodeep wrote: »

TyreLever wrote: »

Just got a £70 tax bill, so its not really an issue, especially considering I have had 2 rebates of several hundred pounds in the past. This seems to prove that employers are not getting my tax right in the first place. Some people have ended up with a tax bill of thousands. If this happened to me I would be beyond furious.
I like how they state "you have paid too little tax". I have absolutely no control over my tax payments, my employer deducts this from my pay. So can employers be liable for tax bills that they should have had right in the first place? If not, how do I avoid coming a cropper?

The amount of tax I pay is close to what it says I should pay here:
https://listentotaxman.com/

However I just checked 2 payslips. I earned the same wage both weeks, but there is a 20 pence difference in the tax paid. What the??[/QUOTE]


I think you'll find it's called rounding up/ down, quite simple, but if you want to think that HMRC are fiddling you out of the cost of an envelope then carry on ?

The other post with the numbers explained the gist of that bit. Anyway I went online and paid the whole thing off. I see no point paying £70 off in bits over the course of a year, altho I'm kinda glad that option is available because if I was on the dole, I'd be f!cked. I put this down to multiple employers in a particular period. I feel a mistake was more inevitable than fault in this particular case based on what I have read here.