Overpayment query

Baled

Hi

I left my last employer on November 29th but some !!!!!! up occurred and they paid me a normal wage for December.  I contacted a manager straight away to let them know.

I started my current job on December 1st so my tax allowance 1257L was applied in December by my previous employer and current employer on the respective payslips.

I've since received a letter from HMRC saying I owe £145 tax and they will adjust my tax code for 2022/2023 to recover it.

The P45 issued by my previous employer has a leaving date of 3rd December, Month number 9, total pay to date 14,430.36, total tax to date 999.20 yet my November payslip figures are taxable pay to date 14197.86, tax paid to date 1162.20

I think my P45 figures should match my November payslip figures as my deductions were correct up to that point?

My previous employer has generated a January 'payslip' which I think is for tax/NI purposes but in the deductions column it states tax paid minus 310 but the tax deducted on the December payslip is 147.

I haven't given the P45 to my current employer as I only found out about it yesterday and I don't think it's correct.

Any help/advice would be appreciated.

TELLIT01

The overpayment by your employer and the letter from HMRC are not connected.  The HMRC letter will be referring to tax paid in the year 2020/21 as 21/22 is the current year so no under/over payment for that period can have been calculated.

Baled

The letter is a tax code notice for 2022/2023. I'm pretty sure the amount in question doesn't relate to any previous year. 

Exodi

I'm confused that HMRC would say that you've underpaid tax during a current tax year, where they would normally just update your current tax code to reclaim it.

Your payslip numbers seen a bit messy, could you just list

Period, Gross TD, Tax TD
November £14197.86 £1162.20
December £14430.36 £999.20
January, £?, £?

Baled

We were issued new payroll numbers in September so gross to date figures only apply from then that's why i quoted taxable pay to date figures

November 21 - £14197.86 £1162.20
December 21 - £15980.36 £1309.20
January 22 - £14430.36 £999.20

The figures on the January slip have been used for my P45

Exodi

As the amounts differ - what have you physically received?

Between Nov-Jan there is a gross £232.50 income difference and a tax difference of £163.00

Have you physically got this additional £395.50 difference back since your November pay slip (after what you've returned in overpayment)?

I'm unsure why your tax has dropped between Nov-Jan, but this looks to explain why HMRC want £145 as it seems to have been randomly deducted.

Dazed_and_C0nfused

TELLIT01 said:

The overpayment by your employer and the letter from HMRC are not connected.  The HMRC letter will be referring to tax paid in the year 2020/21 as 21/22 is the current year so no under/over payment for that period can have been calculated.

HMRC have started to do that now.

I think it's when a new tax code is calculated towards the end of the tax year.

They calculate the tax owed and include the amount owed in the tax code of the forthcoming tax year.

They will still review things after the tax year ends and if the op didn't owe as much as £145 then they will revise the amount of tax owed in the 2022:23 tax code.

If more is owed (small extra amounts tend to be ignored) then it will usually be collected by adjusting the 2023:24 tax code.

First step for the op would be to compare their payslips with what has been paid and see if the January figures are in fact correct or not?

Baled

I spoke to the tax office and the amount owed is definitely for this current tax year as I thought.

I wasn't due any wages from my previous employer in December but they paid me a normal wage.
I haven't been paid anything for January - the payslip is a correction which has compounded the mistake even more to me.

November payslip:



December payslip:



January claim slip:



The NI cumulative figures on this January claim slip match my November payslip but I honestly don't know what they're doing with the tax.  If it makes sense to anyone else please let me know.

chrisbur

It appears from these figures that there was some money due to you in December.  
You were paid £1782.50  but should have been paid £232.50
These figures are based on your salary adjustment and your pension adjustment.
Salary paid was 1916.67 but deducted was 1666.67 so £ 250 remained as paid from which 7% was non-taxable pension to leave £232.50 as paid salary.  
This was adjusted as an adjustment to the December payment so was done on tax month 9 and the figures for taxable pay and tax paid of 14430.36 and 999.20 agree with this.
I am assuming that the ""Claim 1121.74" is the amount repaid to your first employer though no idea why it is in the section so that it appears to be gross pay. But on my assumption of some pay owing which reduced the amount to be repaid the cumulative figures are now correct on the January payslip.

The moving forward of your tax month does raise the possibility that you now have an overlap of tax allowances.  
To clarify that can you advise details of first payment from your new employer 
Taxable gross
Tax paid
Month number or date paid

EDIT
Just an afterthought; if HMRC plan to correct next year then I would assume that they have put you onto a non-cumulative tax code and have not advised your new employer of your pay and tax figures so the pay/tax year to date for new employer are same as pay/tax in new employment.

Baled

All of those payslips are from my previous employer. My pension deduction was 7% salary sacrifice so it shouldn't figure in any taxable amounts? Pension was matched at 5% by my employer - that is a total of £230 by my reckoning. 

Is it right that my previous employer can state my taxable is higher because  a pension payment was processed by their error? 

And how can my tax paid to date drop by £163?

My current job pay details for December:

Date: 31/12/2021
Taxable gross: 1518.21
Tax paid: 110.00

Payroll at my current place had the completely wrong annual salary figure for me so I'm due back pay this month.

Fun and games. 

chrisbur

Baled said:

All of those payslips are from my previous employer. My pension deduction was 7% salary sacrifice so it shouldn't figure in any taxable amounts? Pension was matched at 5% by my employer - that is a total of £230 by my reckoning. 

Is it right that my previous employer can state my taxable is higher because  a pension payment was processed by their error? 

And how can my tax paid to date drop by £163?

My current job pay details for December:

Date: 31/12/2021
Taxable gross: 1518.21
Tax paid: 110.00

Payroll at my current place had the completely wrong annual salary figure for me so I'm due back pay this month.

Fun and games. 

Sorry not quite sure what you mean in the first two lines but regarding the reduced tax paid figure....
The adjustment of your salary down to £232.50 taxable gross was done on month 9 so your taxable gross was adjusted to £14430.36  As this was a month after your salary for November it was done on month 9 whereas your November salary was done on Month 8 so you now had another month's tax allowance.  The allowance on 1257L for a month is £1048.25.  Your payment of £232.50 was ££815.75 below this figure so 20% of that was rebated to you. This would be aprox £163.00.  This is the amount that your tax paid to date has gone down by.

I am unable to see where the tax figure came from for your new employment as no tax code provided.  Also would help if you could advise the taxable gross to date and tax paid to date if they differ from the figures given above.
Either way you have definitely underpaid tax as both employers have used your tax allowance for month 9 though I cannot see where HMRC's figure of £145 comes from.  Have they given you a breakdown of the calculation they used? 


Tax of £110.00 with tax code of 1257L would suggest a taxable gross of around £1598  Could it be a mis-type or possibly a pension that is paid from net pay.
Just guessing here with the code and to date figures if different should be able to work it out.