Wrong tax code, P45 and old employer

idrewuk

Hi everyone, I could do with some advice.

I left my old employment at the beginning of September, and started a new job (and only job) a couple of weeks later. However I didn't get my printed P45 in time for payroll cut off, so my first new employment pay was on an emergency tax code.

I since handed in my printed P45 so was expecting my second pay - end of October - to be back to normal. However, I paid a huge amount of tax again and I got a shock because I was expecting things to do back to normal.

I called HMRC and they confirmed that my old employer hadn't provided details of my final pay yet. I didn't even know this was a requirement, I thought handing my P45 in was enough.

I've emailed my old employer to try and nudge them firmly so they do whatever it is they need to do as I should theoretically be on the same tax code I was on in my previous employment.

So I'd like to know, what is it that my old employers send to HMRC? Can they do this straight away? Will that automatically make things clearer so my tax code can be amended to what it should be? And, finally, how do I go about getting back any overpayments as quickly as possible?

Thanks for any advice. This is quite stressful overpaying two months in a row.

chrisbur

idrewuk wrote: »

Hi everyone, I could do with some advice.

I left my old employment at the beginning of September, and started a new job (and only job) a couple of weeks later. However I didn't get my printed P45 in time for payroll cut off, so my first new employment pay was on an emergency tax code.

I since handed in my printed P45 so was expecting my second pay - end of October - to be back to normal. However, I paid a huge amount of tax again and I got a shock because I was expecting things to do back to normal.

I called HMRC and they confirmed that my old employer hadn't provided details of my final pay yet. I didn't even know this was a requirement, I thought handing my P45 in was enough.

I've emailed my old employer to try and nudge them firmly so they do whatever it is they need to do as I should theoretically be on the same tax code I was on in my previous employment.

So I'd like to know, what is it that my old employers send to HMRC? Can they do this straight away? Will that automatically make things clearer so my tax code can be amended to what it should be? And, finally, how do I go about getting back any overpayments as quickly as possible?

Thanks for any advice. This is quite stressful overpaying two months in a row.

Cannot give any definite answer to this as none of the important details have been given; but sounds to me as if you have perhaps received two payments in one tax period. To give a proper answer you need to give the following details....
From the P45 The total gross to date, total tax paid to date, tax code and if any X follows it, month number and total gross and tax in this employment if these figures are on your P45.
From your first payslip taxable gross, tax paid, month number and tax code.
From your second payslip same details as first payslip plus taxable gross to date and tax paid to date.

Dazed_and_confused

You do realise that the so called "emergency" tax code is the same as the standard tax code most people have, the only difference is that it is used on a special basis which doesn't consider what happened earlier in the year.

So being taxed on the emergency code wouldn't result in any extra tax being paid.

As you have now handed in your P45 it is immaterial what HMRC do, your new employer has your (presumably) correct tax code and prior earnings details so this month's tax is likely to be correct.

The reason for any extra tax being paid now is probably exactly as chrisbur has explained, because you have been paid twice in one tax month, once by your old employer and once by your new employer.

What you would be best of doing is using this link to check what will happen next month. Estimate your taxable salary and include the relevant details about what's already been paid (the year to date figures from your latest payslip which should reflect both jobs) and chances are your tax will be back to normal levels next pay day.

http://payecalculator.hmrc.gov.uk/PAYE0.aspx

Alternatively post up the details chrisbur suggested.

Hama4075

It's possible that your old employer forgot to process you as a leaver when they did the September payroll, so HMRC didn't know that you had left them. The old employer might then have done the leaver processing and produced a P45 which they sent you during October, but probably wouldn't provide this information to HMRC until their usual HMRC filing at the end of the month (perhaps today).

If you got your P45 but HMRC didn't know yet that you'd left the company, that might explain it - if so, the old company should have filed their October payroll (ie sent the pay information to HMRC electronically) by now and your P45 information should have been included.

So hopefully HMRC now have the information they need. I'd check with them again before chasing the old employer for anything.

Did your new employer ask you to complete a starter declaration? If so, and you answered that you'd had another job since last 6 April but this was now your only job, you should have been put on the standard tax code for your salary, applied month to month until more information is available.

If your new employer didn't ask you to make a declaration, or there was some sort of mix up, they might have put you on the 0T tax code, where your whole pay will be taxed as if you have no tax-free allowance. Is that what you mean by emergency tax code?

I'd start with HMRC again and see if they have all the details now and can issue a new, corrective, tax code to your new employer. The earlier you do this in the month, the better, to ensure it will reach your new employer in time for their payroll. If HMRC issue a new tax code they'll tell you. It's worth checking a couple of times with your Payroll department to make sure they receive this and apply it in November (they will receive their own notification direct from HMRC - you can't just give them your own letter).

If HMRC are still waiting for something, you may need to make sure your Payroll department do a new starter declaration with you so you can at least get onto a regular tax code in the interim. What is the tax code on your October payslip?

chrisbur

Hama4075 wrote: »

I'd start with HMRC again and see if they have all the details now and can issue a new, corrective, tax code to your new employer. The earlier you do this in the month, the better, to ensure it will reach your new employer in time for their payroll. If HMRC issue a new tax code they'll tell you. It's worth checking a couple of times with your Payroll department to make sure they receive this and apply it in November (they will receive their own notification direct from HMRC - you can't just give them your own letter).

If it is the case that two payments have been made in the same pay period then there is nothing to correct. Until the OP supplies the details there is no way of being certain what has happened.

Hama4075

Hi chrisbur, I don't think two payments in the same pay period are the potential issue. It would be if the 0T tax code had been used unnecessarily that there would be something to correct.

I agree we need details from the OP, who doesn't seem to be returning. Hopefully because it's all resolved.

molerat

Hama4075 wrote: »

Hi chrisbur, I don't think two payments in the same pay period are the potential issue. It would be if the 0T tax code had been used unnecessarily that there would be something to correct.

I agree we need details from the OP, who doesn't seem to be returning. Hopefully because it's all resolved.

Of course there could be an issue. In mid September old employer uses 1150L at month 6 and at end of September new employer uses 1150LM1 leading to an underpayment of at least £191.80 to be collected in October.

Dazed_and_confused

Agree with molerat, this is a common problem compounded by the person involved usually only having actually worked for one employer at a time.

When you worked is really irrelevant it's the payment by two employers in the same tax period, both giving a months worth of the tax code allowances, which causes the underpayment of tax.

No one is necessarily doing anything wrong and it will be corrected once the P45 is used by the new employer (assuming it's a cumulative tax code).