HMRC underpaid tax

cat138

When I started with my current job I was paid £600 holiday pay from my previous job. I was technically still employed by my previous job because I was using my holiday to work the rest of my notice period, if that makes sense. Because of this I assumed I would owe some money to HMRC. When they sent me a letter saying how much I owed (which I cannot find for the life of me now) I called them and asked what was going on. A very helpful man advised me that I owed around £300 and they would take it bit by bit monthly. So for the past 6 months I have been getting around £100 less than my colleagues who are  earning the same as me because of my tax codes. I have had 4 different tax codes since I started here. I assumed I would have paid what I owed off by now but I contacted them lately and they're saying I owe a further £600 or so and according to the HMRC app I still owe £265. I'm so confused and I really thought I'd be getting a rebate at the rate they were taxing me. I can provide figures if it would help. Sorry if this seems rambling.

spadoosh

Whilst you can share the numbers etc on here the only solution from this will come in the form of speaking to HMRC. So its probably just easier giving them the figures and then have them give you the correct answer. We will be working on some assumptions where as HMRC should have more of the critical information (things like monies owed from previous years etc). 

cat138

I've spoken to HMRC and 2/3 advisors I've spoken to don't seem to know how to explain what's happened. The last time I spoke to someone I questioned why the amount I owed is increasing if I'm being taxed more and she came out with this new £600 figure. This is the first time I've ever owed money to HMRC

spadoosh

Right in that case can you provide earnings (all incomes) and tax paid for the last 3 years. Your main tax code for each year. Your personal allowance for each year. Any taxable benefits youve received. And the figure as to how much tax you had underpaid and for what period. 

(i did say it was probably easier ringing them..... If the HMRC advisors dont know how to explain, ask for someone who does  know how to explain.)

Its just we can offer a bit of insight, work out a few calculations but we cant know if the numbers you are giving us are accurate (not saying youd lie), as such any help we offer is only as useful as the information we have, it sounds like you dont know the information so any insight will be purely arbitrary and not applicable to you specifically. 

There calculators you can use that are pretty straight forward, but again, if you dont know all the information, youre not going to come up with the right answer. 
https://www.moneysavingexpert.com/tax-calculator/

chrisbur

Can you give from your P45 part 1A
Gross to date
Tax to date
Gross this employment
Tax this employment
Tax code
Is there an X after tax code
Week or month number

Then from your first and latest payslip in new employment
Taxable gross
Tax paid
Tax code/basis
The week/month number or date paid
Taxable gross to date
Tax paid to date
Previous gross
Previous tax

Dazed_and_C0nfused

Spadoosh is spot on.  In the op there is no information about which tax year(s) are involved, what the letter said you owed, why you needed to phone to ask them about it, whether the different tax codes are actually anything to do with the money owed.

Impossible to know anything with so little to go on.  If the letter was advising of tax owed for the previously tax year (2018:19) then it normally won't be until the next tax year (2020:21) that any extra starts to be paid to clear that tax underpayment.

More questions than answers at this stage.

cat138

From my P45 from last employer 
Dated: 16/07/2019
Gross: 4447.68
Tax paid : 121.40
There's no other amounts listed on the 1A such as Total pay in this employment is states it's all listed as above 
Tax code was: 1250L 
No X after the tax code
These amounts include the holiday pay I was paid after I started working with my new employer. I do know looking from the holiday pay wage slip I was meant to pay £93.40 in tax but didn't for some reason I acknowledge I did owe this in tax.
First wave slip from new employment;
Taxable gross 730.25
Tax paid: 1.35
Tax code: 1250L M1
Tax period 03, paid on 28/06/2019
This pay this came before I got my P45 from my last job
Tax and pay to date would be the same as above
My latest wage slip from my current employer;
Taxable gross: 12,540.94
Tax paid to date: 1,164.60
Taxable pay this period: 1714.32
Tax paid this period: 175.40
Tax code: 1003L M1 (this is the newest one I have had 4 different tax codes in this new employment)
Tax period 10, paid on 28/01/20
On 27 June 2019 I received a letter from HMRC advising I owed £147.80 and that my tax code was changing to 1154L X. On the 25 July 2019 I received a letter from HMRC advising I owed £356.40 and that my tax code was changing to 995L X. On August 28 2019 I received a letter from HMRC advising I owed £298.02 and that my tax code was changing to 1003L X. 
I have stayed on code 1003L M1 since then. 

Dazed_and_C0nfused

So for tax purposes you did effectively have two jobs at the same time. 

You were paid by the original employer until month 4 of the tax year.  

And the new employer paid you from month 3 so a two month overlap as far as tax code allowances being used are concerned.

I would say the best thing to do now we are so close to the end of the tax year is do nothing.

Leave your new employer to use 1003L at the end of February and March and then you should find that you tax code revert to 1250L from the end of April pay.

Once you have your P60 you can check the total tax due using your P45 and P60 figures and compare that to the tax paid.  In theory it should be correct to within a pound of two as the lower tax code you have had this year is attempting to collect an extra £298.

chrisbur

As advised by Dazed_and_COnfused it is best left to the tax year end now but there is something that might be worth checking.
The two months that overlapped were your first two payments from your new employer
£730.25 on which no tax was paid (the tax paid £1.35 that you quoted was actually national insurance) and the second payment which I assume was high enough to pay tax on.  This meant that you owed tax on £730.25 which would be about £146 and the tax allowance for the second which would be about £208.50 ( tax owed on full months allowance) to give a total of about £354.50  This suggests that HMRC issued an adjusting code when they became aware of the £146 underpaid and then revised it when they became aware of the increase to £354.50.  My figures are based on PAYE calculations which very slightly under-tax so the figures they worked would be just a little higher than these.
If I understand the figures you have given correctly you appear to have earnings of £12540.94 from currant job and £4447.68  from your old job so £16988.62 as at month 10
Tax allowance assuming 1250L is still your correct tax allowance code would be about £10417 so tax due about £1315
Tax paid is £121.40 old job and £1164.60 new job so total £1286.00
Tax still owing about £29
The reduction of code from 1250L to 1003L is deducting aprox £40 a month extra so it appears you will have paid back a bit extra.  
One thing I cannot quite understand is the tax figure on your P45.  I have checked this pay of £4447.68 and tax of £121.40 and cannot see how this exact figure was arrived at so it would be worth checking on your personal tax account and adding up tax paid on your payslips to see if they all agree.
https://www.gov.uk/personal-tax-account?utm_source=HMRCPTApage&utm_medium=GOVUK&utm_campaign=PTA

ffacoffipawb

chrisbur said:

As advised by Dazed_and_COnfused it is best left to the tax year end now but there is something that might be worth checking.
The two months that overlapped were your first two payments from your new employer
£730.25 on which no tax was paid (the tax paid £1.35 that you quoted was actually national insurance) and the second payment which I assume was high enough to pay tax on.  This meant that you owed tax on £730.25 which would be about £146 and the tax allowance for the second which would be about £208.50 ( tax owed on full months allowance) to give a total of about £354.50  This suggests that HMRC issued an adjusting code when they became aware of the £146 underpaid and then revised it when they became aware of the increase to £354.50.  My figures are based on PAYE calculations which very slightly under-tax so the figures they worked would be just a little higher than these.
If I understand the figures you have given correctly you appear to have earnings of £12540.94 from currant job and £4447.68  from your old job so £16988.62 as at month 10
Tax allowance assuming 1250L is still your correct tax allowance code would be about £10417 so tax due about £1315
Tax paid is £121.40 old job and £1164.60 new job so total £1286.00
Tax still owing about £29
The reduction of code from 1250L to 1003L is deducting aprox £40 a month extra so it appears you will have paid back a bit extra.  
One thing I cannot quite understand is the tax figure on your P45.  I have checked this pay of £4447.68 and tax of £121.40 and cannot see how this exact figure was arrived at so it would be worth checking on your personal tax account and adding up tax paid on your payslips to see if they all agree.
https://www.gov.uk/personal-tax-account?utm_source=HMRCPTApage&utm_medium=GOVUK&utm_campaign=PTA

P45 may be explained if weekly paid with 16 weeks worth of personal allowance gets close.

(4447.68 - 12500 x 16/52 ) x 0.20 = £120.31 tax.

chrisbur

ffacoffipawb said:

chrisbur said:

As advised by Dazed_and_COnfused it is best left to the tax year end now but there is something that might be worth checking.
The two months that overlapped were your first two payments from your new employer
£730.25 on which no tax was paid (the tax paid £1.35 that you quoted was actually national insurance) and the second payment which I assume was high enough to pay tax on.  This meant that you owed tax on £730.25 which would be about £146 and the tax allowance for the second which would be about £208.50 ( tax owed on full months allowance) to give a total of about £354.50  This suggests that HMRC issued an adjusting code when they became aware of the £146 underpaid and then revised it when they became aware of the increase to £354.50.  My figures are based on PAYE calculations which very slightly under-tax so the figures they worked would be just a little higher than these.
If I understand the figures you have given correctly you appear to have earnings of £12540.94 from currant job and £4447.68  from your old job so £16988.62 as at month 10
Tax allowance assuming 1250L is still your correct tax allowance code would be about £10417 so tax due about £1315
Tax paid is £121.40 old job and £1164.60 new job so total £1286.00
Tax still owing about £29
The reduction of code from 1250L to 1003L is deducting aprox £40 a month extra so it appears you will have paid back a bit extra.  
One thing I cannot quite understand is the tax figure on your P45.  I have checked this pay of £4447.68 and tax of £121.40 and cannot see how this exact figure was arrived at so it would be worth checking on your personal tax account and adding up tax paid on your payslips to see if they all agree.
https://www.gov.uk/personal-tax-account?utm_source=HMRCPTApage&utm_medium=GOVUK&utm_campaign=PTA

P45 may be explained if weekly paid with 16 weeks worth of personal allowance gets close.

(4447.68 - 12500 x 16/52 ) x 0.20 = £120.31 tax.

I said in my post that I could not "see how this exact figure was arrived at" 
By following the PAYE rules you can tell exactly to the penny what tax is due for any taxable gross, in this case for a code of 1250L as at week 16 you would find the tax allowance from table A  
https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/783933/Tables_A_Pay_adjustment.pdf
This is £3849.12 which is 16/52 of £12509.64 which is the tax allowance given for the year for code 1250L
From the £4447.68 you deduct the £3849.12 to get £598.56  
Tax is then due on the full pounds of this; you ignore the pence so
20% of £598 is £119.60
Anything else however close is the wrong answer, and should not be used by a new employer.