HMRC incorrectly removed my personal allowance

Fletchasketch

I've just received a letter to say my personal allowance has been removed and that I have underpaid tax. Having logged onto the HMRC portal I can see that they are basing this on an estimated income of £133K which is waaay over what it should be. I expect that this has been skewed by a bonus payment in April. I can't get through to HMRC as it's a Saturday, but have requested online to correct my estimated income for 2021/22 to a realistic level. 

My question is, what are the chances of this being updated in time for pay day in 9 days time?! I'll be hundreds of pounds out of pocket if they keep the tax code as it is and won't be able to meet my expenses for next month. What is the quickest way to get HMRC to correct their mistake?

MovingForwards

https://www.gov.uk/government/organisations/hm-revenue-customs/contact/income-tax-enquiries-for-individuals-pensioners-and-employees

They are open 7 days a week, just need to wait in the queue or try live chat.

They might be able to get it sorted out, but it's whether your employer receives the notification and updates in time for payroll cut off which has probably already gone.

Perhaps using a CC or quickly getting an overdraft will get you through the month and hopefully it's all sorted next payday and the overpaid tax is refunded.

Fletchasketch

Thanks. Took an hour, but managed to get through on the chat and have been assured that previous tax code has been reinstated. Heart attack over!

Savvy_Sue

Fletchasketch said:

Thanks. Took an hour, but managed to get through on the chat and have been assured that previous tax code has been reinstated. Heart attack over!

I really don't want to worry you unnecessarily, but I would definitely - if you can - speak to your payroll dept and tell them that a new tax code is on its way, please can they confirm that they will be able to implement it for your June salary.

I do the basics of our company's payroll, and we haven't received a new tax code notice for anyone for several months - despite KNOWING there should be at least one, ie mine! It's taken several phone calls to resolve this, and I have no idea why they stopped arriving - we've changed nothing at our end, but apparently our company's tax reference became 'misaligned' on the HMRC system ...

Marcon

Savvy_Sue said:

Fletchasketch said:

Thanks. Took an hour, but managed to get through on the chat and have been assured that previous tax code has been reinstated. Heart attack over!

I really don't want to worry you unnecessarily, but I would definitely - if you can - speak to your payroll dept and tell them that a new tax code is on its way, please can they confirm that they will be able to implement it for your June salary.

...but bear in mind they almost certainly won't be able to confirm it, since they can only change your tax code once they receive direct instructions from HMRC to do so - whatever you've been told/shows up in your personal tax account doesn't give them the necessary authority. The chances of the code arriving hot on the heels of your phone call to HMRC, and in time for the payroll cut off date, must be very slim.

Dazed_and_C0nfused

Fletchasketch said:

I've just received a letter to say my personal allowance has been removed and that I have underpaid tax. Having logged onto the HMRC portal I can see that they are basing this on an estimated income of £133K which is waaay over what it should be. I expect that this has been skewed by a bonus payment in April. I can't get through to HMRC as it's a Saturday, but have requested online to correct my estimated income for 2021/22 to a realistic level. 

My question is, what are the chances of this being updated in time for pay day in 9 days time?! I'll be hundreds of pounds out of pocket if they keep the tax code as it is and won't be able to meet my expenses for next month. What is the quickest way to get HMRC to correct their mistake?

It's not a mistake.  HMRC have based your tax code on the latest information available to them.

Nothing wrong with you providing new information but tax codes are based on what you could be expected to earn so if after month 1 of the tax year you have earned c£11k then that is annual earnings of £133k

Fletchasketch

Savvy_Sue said:

Fletchasketch said:

Thanks. Took an hour, but managed to get through on the chat and have been assured that previous tax code has been reinstated. Heart attack over!

I really don't want to worry you unnecessarily, but I would definitely - if you can - speak to your payroll dept and tell them that a new tax code is on its way, please can they confirm that they will be able to implement it for your June salary.

I do the basics of our company's payroll, and we haven't received a new tax code notice for anyone for several months - despite KNOWING there should be at least one, ie mine! It's taken several phone calls to resolve this, and I have no idea why they stopped arriving - we've changed nothing at our end, but apparently our company's tax reference became 'misaligned' on the HMRC system ...

Thanks for the advice. Having logged into HMRC I can see my June salary is already there- with an extra £638 tax deducted. Ouch!

Very annoyed that I will have to go into the red for this having always managed my money well. Either that or cash in premium bonds which would be very annoying! 

@D@Dazed_and_C0nfused I take your point, but I've received a bonus for the past four years from vested shares in Aprilwhich pushes my salary up temporarily and this is the first year they've changed the tax code. If they did it at the start of the month and gave you time to correct it that would be one thing, but doing it at exactly the time payroll is run is very harsh!

Savvy_Sue

Fletchasketch said:

@D@Dazed_and_C0nfused I take your point, but I've received a bonus for the past four years from vested shares in Aprilwhich pushes my salary up temporarily and this is the first year they've changed the tax code. If they did it at the start of the month and gave you time to correct it that would be one thing, but doing it at exactly the time payroll is run is very harsh!

HMRC neither know nor care when your company runs its payroll ... there is no malice in what has happened!

Fletchasketch

Savvy_Sue said:

Fletchasketch said:

@D@Dazed_and_C0nfused I take your point, but I've received a bonus for the past four years from vested shares in Aprilwhich pushes my salary up temporarily and this is the first year they've changed the tax code. If they did it at the start of the month and gave you time to correct it that would be one thing, but doing it at exactly the time payroll is run is very harsh!

HMRC neither know nor care when your company runs its payroll ... there is no malice in what has happened!

No, sure- but doing it at the beginning of the month would help most people. A loss of over £600 is a lot to juggle!