P800

suejb2

I have very basic knowledge of tax!

My husband received a P800 stating he paid too little tax 18/19 and owes £52.80. I know in the grand scheme of things it’s only £1 a week, but we don’t know why.
He has my marriage allowance and uniform cleaning bit .
His tax code 18/19 was 1316M/O and is now 1387M/O for 19/20.
Can anyone offer any advice please?

Dazed_and_confused

What income was included in the calculation?

suejb2

£23886

I have just found a piece about week 53. Husband is paid weekly on a Friday and 18/19 had 53 Paydays. If that’s the case here why hasn’t every employee paid weekly on a Friday had a P800?

Dazed_and_confused

The impact of a week 53 payment is partly dependent on the tax code involved.

As he has a higher than normal tax code he owes more than most people would.

How do you know other people with a week 53 payment haven't been sent a P800?

unholyangel

suejb2 wrote: »

£23886

I have just found a piece about week 53. Husband is paid weekly on a Friday and 18/19 had 53 Paydays. If that’s the case here why hasn’t every employee paid weekly on a Friday had a P800?

Tell your husband to ask his colleagues. Some may not have received theirs yet, some may be unaffected (depending on earnings/if they'd overpaid previously) but there will definitely be others in the same boat. Everyone who is paid on a weekly, fortnightly or 4 weekly basis is will be affected by this at some point if earning more than their tax code allowance.

I really don't know why, with it all going electronic/digital, they can't have an algorithm in place to detect when the tax leap year will occur or just have one in place to always work out how many pay periods will be in a year and split accordingly. Would be a lot smoother & completely cut out underpayments arising for this reason (along with the administration costs that it creates).

chrisbur

Due to the way that PAYE is calculated just about everyone who is on the correct tax code actually underpays tax a little bit. HMRC do not try to collect this underpayment so there is a minimum figure of underpaid tax that is ignored. I have not seen anything official that defines this minimum figure but have seen it suggested that £50 is the figure eg ....
https://taxaid.org.uk/guides/taxpayers/tax-debt/paye
If this is correct then most who are on the standard tax allowance would probably fall just under this and so avoid repayment.

badmemory

unholyangel wrote: »

I really don't know why, with it all going electronic/digital, they can't have an algorithm in place to detect when the tax leap year will occur or just have one in place to always work out how many pay periods will be in a year and split accordingly. Would be a lot smoother & completely cut out underpayments arising for this reason (along with the administration costs that it creates).

It is an absolute disgrace that this is still going on. There is an old thread on here which showed that every employee of Asda who worked more than three days a week got a tax bill because they had underpaid. Although I believe that £25 was the figure at the time. Smaller earners didn't get a bill simply because they owed less than the £25.


HMRC I believe authorise the use of various payroll systems. It is time they did their job properly & made sure that any employer paying other than 12 months per year had to use a payroll system that took that into account. It stinks, but I'm not holding my breath on them ever sorting this!

nick74

badmemory wrote: »

HMRC I believe authorise the use of various payroll systems. It is time they did their job properly & made sure that any employer paying other than 12 months per year had to use a payroll system that took that into account. It stinks, but I'm not holding my breath on them ever sorting this!

It does seem a little archaic, but that's just how the PAYE system works. Any changes would need to be instigated by HMRC. Payroll software companies cannot do anything about it without HMRC's approval. If software companies took it upon themselves the 'fix' this then they would, ironically, no longer be following the PAYE rules and cease to be authorised by HMRC!

To say 'it stinks' is surely going a bit far? All that happens is that the underpaid tax leads to a coding adjustment and is repaid over 52 interest free instalments, starting in a years time!

badmemory

nick74 wrote: »

To say 'it stinks' is surely going a bit far? All that happens is that the underpaid tax leads to a coding adjustment and is repaid over 52 interest free instalments, starting in a years time!

Doing it over 52 weeks may be the way they are doing it now, but with the Asda employees it was a "pay it now" tax bill.


Also if for some reason you have to stop working you will then have a bill.


It does stink because the people who land up with this problem are generally lower earners. Any programmer with a modicum of knowledge could write this in. 40 years ago I could have done it myself & I never was a real programmer!