P45 was incorrect, now P60 will be wrong so my (correct) tax return won't match it...

pinkteapot

Tl;dr: Old employer gave incorrect figures on P45, so now YTD numbers on payslips from new employer are wrong, and P60 will be too. Am I right in thinking I ignore the P60 and put in the numbers I know are correct on my tax return? 

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My only income is from monthly PAYE work. I changed jobs recently, finishing at my old place in mid December 2021 and starting the new job on 4 Jan 2022 (both jobs on salaries around £22k, so basic rate taxpayer). My old place gave me a P45 which I gave to my new place. When I got paid by the new place at the end of Jan, I hadn't been given a tax-free allowance that month (I'd paid 20% on the full amount earned). So I looked into what had gone wrong...

I then realised that the P45 was incorrect. The reason I'd lost my tax-free allowance is that it said I left in month 10, when it should have been month 9. Consequently, new employer thought I'd already been paid by old employer in January so had already had a tax-free allowance. I'm therefore down about £200 (I think), but know it'll come back after the end of the tax year when I do my tax return. 

Furthermore, the P45 showed the wrong amount of earnings and tax paid YTD(!). 

Old employer apologised and issued me a new P45. I've given this to new employer but they can't use it. Their finance system doesn't allow them to change figures from a P45 once it's been entered. 

So now the problem is that that my payslips from the new place are showing incorrect figures for pay and tax YTD (tax year to date), and presumably the P60 they issue will also be incorrect, because they're taking incorrect figures from the P45, plus whatever they pay and tax me. New employer is aware but there's nothing they can do. 

I will check with HMRC before I do my tax return, but I assume I should complete my return using the correct figures which I'll calculate myself? I'm getting stressed that HMRC will challenge me on my why my reported figures don't match my P60. 

But then I read this which certainly suggests I should put in the figures I know to be accurate! https://www.accountingweb.co.uk/tax/hmrc-policy/taxpayer-penalised-for-employers-mistake-on-p60 

Before anyone says it, I am KICKING MYSELF for not checking the P45. I've changed jobs 8 or 9 times and have just never had an issue like that. The old employer said they don't know how it happened! I glanced at the figures for salary received and tax paid and they weren't totally ridiculous and I just didn't think to check them fully.  

Also, I know I don't have to wait for tax return time to get the overpaid January tax back. I did phone HMRC as soon as I knew what had happened. They said they'd issue a new tax code so I'd get the money back in Feb. However, the code they then sent was identical to my old code, so while my Feb net pay is correct, I haven't had a tax refund. I can't face phoning them again - I'll just let it come back via self-assessment! 

pinkteapot

p.s. I have all my payslips, the incorrect and correct P45s, and an email from old employer saying "Sorry - here's your corrected P45", so I am assuming that'll be sufficient evidence if/when HMRC ask questions. 

Dazed_and_C0nfused

I think you are over thinking this.

Your tax return, in respect of these two jobs, will be based on two sets of facts.

The actual pay and tax from job 1.  Which presumably will be reflected on the new P45 they provided?

The actual pay and tax from job 2.  The fact that you may think the tax was wrong doesn't later the fact that what they paid you and deducted in tax has happened.  

The P60 job 2 provides should have these facts in the "pay from this employment" boxes.

You can safely ignore the "pay from previous employments" boxes on your P69.  For two reasons,

1.  You know they were wrong 
2.  They are irrelevant for a tax return as they could, for some people, be made up of income from numerous jobs i.e. job 1 April - June followed by job 2 July - Sept followed by job 3 Oct - Feb and job 4 (that generates the P60) March and early April.

What I think would be prudent would be to check your Personal Tax Account to ensure your old employer has filed an updated Real Time Information report to correct the original figures i.e. the end result matches the new P45 you have received (and presumably agree with).

pinkteapot

Yep - 'previous employment' figures will be from the correct P45, and 'this employment' from either payslips or the 'this employment' P60 section. I'm happy with that. I was just worried that HMRC would start some sort of investigation into my tax affairs because the total figures on my tax return won't match my P60. I'm scared of HMRC haha!

(No reason to be scared - all my affairs are in order)

Dazed_and_C0nfused

HMRC don't receive a copy of your P60 so not sure how you think they would know your return wouldn't match a form they don't see?

pinkteapot

Dazed_and_C0nfused said:

HMRC don't receive a copy of your P60 so not sure how you think they would know your return wouldn't match a form they don't see?

Oh!! I assumed they did - hence my concern. Mind at rest then. Thank you.  

Sorry - I didn't answer one of your other points. My old employer said the revised P45 will go to HMRC with their next RTI (so I would assume it's gone by now, or certainly will have by the end of the tax year). 

Dazed_and_C0nfused

It's the RTI information HMRC get (which stopped the need for a copy of the P60 to be sent) so providing that's submitted then everything will be in order.