Incorrectly Taxed due to 2 different payslips from different periods, paid at the same time. EDIT.

IndigoPlateau

Hi Everyone,

I work for an employer through an Agency in the UK. Recently, I submitted 2 timesheets - one for my current week, and another timesheet that I forgot to submit about 4 weeks back.

I recently received  2 payslips as a result. On one of them them, I have been taxed normally and the other I have been taxed quite significantly. I think it is because both of the payslips show the same period?

I asked an explanation from my agency and they said the following:

"Due to late submittal of one of your timesheets, I can see you have 2 payslips for 07/05/2020, and both are paid on period 5/2020. You are on a cumulative tax code, so the tax code will have taken the gross amount you were paid and assumed that you would be paid this amount for each period moving forward, so you would earn more money over the course of the year, and need to pay more tax, so you have been taxed more heavily and thus left with a smaller amount."

They then asked me to contact the HMRC to resolve this, and I did. However, the HMRC then informed me that my employer should correct this as they cannot see any errors with the tax code, or other information on my tax profile.

Would appreciate some advice on what I should be doing and whether my employer agency or the HMRC should be correcting the above.

Thanks!

EDIT - Payslip pictures attached:

The first payslip with £353.84 is the one I have assumed to be excessively taxed. The second one is the payslip which matches with my previous pay.

Dazed_and_C0nfused

Why do you think there is anything to correct?

On a cumulative tax code the tax is worked out to that point in the year (7 May) .

Have you checked if the tax is correct to whatever week or month in the tax year your pay was calculated.

Not much more anyone can say in the absence of some actual figures from the payslips.

chrisbur

The "explanation" from your employer is rubbish.
PAYE deducts tax that is due on your earnings to date; it makes no assumptions about any future earnings.
Sometimes under these circumstances employers do deduct the wrong amount of national insurance so if you decide to put up your payslip figures for checking I would recommend that you include the NI figures as well as tax.

IndigoPlateau

chrisbur said:

The "explanation" from your employer is rubbish.
PAYE deducts tax that is due on your earnings to date; it makes no assumptions about any future earnings.
Sometimes under these circumstances employers do deduct the wrong amount of national insurance so if you decide to put up your payslip figures for checking I would recommend that you include the NI figures as well as tax.

Dazed_and_C0nfused said:

Why do you think there is anything to correct?

On a cumulative tax code the tax is worked out to that point in the year (7 May) .

Have you checked if the tax is correct to whatever week or month in the tax year your pay was calculated.

Not much more anyone can say in the absence of some actual figures from the payslips.

Hey both,

Payslip attached.

Hope that helps!

Thanks

greatkingrat

Based on earnings of £1062 per week and a tax code of 1035L, you should be paying about £201 per week, so if you have paid £1004 in total from 5 weeks earnings, that looks right. While you may have paid more tax than normal in one payslip, presumably you will have paid less tax than normal in previous payslips so overall it evens itself out.

Dazed_and_C0nfused

Tax looks spot on for tax code 1035L.

If your next weekly payslip showed taxable pay of £1062 again you would only pay c£200 tax.

chrisbur

I think that you need to also look at your payslip for period 4/2020.  You should see that for that period when you had no earnings you received a tax rebate.  If you deduct that tax rebate from the tax you paid on these two payslips and then divide that by two you should come back to something very close to your normal weekly tax figure.
Good news about the NI your employer followed the rules and treated these payments as seperate payments and deducted NI as if they were paid in separate pay periods, so nothing over-deducted here.

Unfortunately they were not as generous with your student loan calculation.  This has been calculated as if both payments were just one payment, with the result that an extra £33 has been deducted compared to the deduction that would have been made over a two week period.
I have looked into this in the past and have not been able to find any ruling for how student loans should be deducted in these cases so you may not have a lot of luck in getting the £33 back.  If anyone has come across a ruling for this I would be very interested in a link. 

EDIT
See post following from Dazed_and_COnfuse  
This should have been treated in same way as NI so £33 has been over-deducted.

Dazed_and_C0nfused

Does employees not paid on their  usual pay day here help?

https://www.gov.uk/hmrc-internal-manuals/collection-of-student-loans-manual/cslm17070

chrisbur

Dazed_and_C0nfused said:

Does employees not paid on their  usual pay day here help?

https://www.gov.uk/hmrc-internal-manuals/collection-of-student-loans-manual/cslm17070

Yes indeed many thanks have bookmarked that.