Back dating tax code

kmslidka

I recently changed jobs on 20th June and from 20th June to 27th July was placed on a D0 emergency tax code. As I am only on a secondment from my original job they did not issue a p45 and have placed me on a "career break". For this reason I had to ask HMRC to apply my allowance and usual tax code (1247L) to my current employer.

My current employer says they will only apply this code from 3rd August when they received thr contact from HMRC as they were not instructed to backdate it to 20th June. HMRC say they do not tell employers to back date tax codes but it will automatically calculate and refund my overpaid tax this month as it looks at the period between the previous April and the payment date each month.

One of them must be wrong but I am struggling to find out anywhere if it is indeed necessary for HMRC to explicitly tell an employer to back date a tax code or if this is automatic. I am aware I will get the money back eventually but after being taxed ~£800 more than I should have been last month I'm keen to get this back sooner rather than later.

So my question is do HMRC instruct employers to back date tax codes? If not how can I claim back my overpaid tax before April 2023?

Thanks!

chrisbur

There are two ways of applying a tax code.  It can be applied as a cumulative code when the code is applied backdated to the start of the tax year or non-cumulative when there is no backdating and each payday is taxed in isolation.  HMRC can use either of these depending on the circumstances.  To issue the code on a cumulative basis HMRC would also have to advise the new employer of all earnings and tax paid in old employment, if these details are not known when the code is issued a non-cumulative code would be issued.  As your "old employer" appears to still be showing you as employed it is possible that a non-cumulative code is being used you will be able to tell from your first payslip as non cumulative codes usually have something like X NC non-cumulative 1 month 1 after them and your taxable pay to date will just be earnings in this employment. 
 
Edit   Do you know if your old employer is still processing you on the payroll:  as if they have 1247L cumulative and use this to make tax refunds you are in danger of under-paying tax.

kmslidka

Hi 

Thanks for your reply. My old employer has put me as on a career break so not receiving any payments from them and havent had any payslips or anything from them since I stopped that job. When I called HMRC they also marked that job as inactive so I would hope that should be safe enough.

My first payslip from the new job was in July and I was on a D0 code so I guess I wont't know until August's pay whether it is cumulative or non-cumulative(?). I was hoping the excess tax paid due to being on the D0 code from 20/06 - 27/07 would be refunded in my August pay.

chrisbur

kmslidka said:

Hi 

Thanks for your reply. My old employer has put me as on a career break so not receiving any payments from them and havent had any payslips or anything from them since I stopped that job. When I called HMRC they also marked that job as inactive so I would hope that should be safe enough.

My first payslip from the new job was in July and I was on a D0 code so I guess I wont't know until August's pay whether it is cumulative or non-cumulative(?). I was hoping the excess tax paid due to being on the D0 code from 20/06 - 27/07 would be refunded in my August pay.

You could try asking your payroll dept if the code notice they received from HMRC included figures for previous pay and tax.  If there were no figures for previous pay and tax then the code should be non-cumulative and so not back-dated.

Dazed_and_C0nfused

I don't think PAYE is sophisticated to Dela with this situation.

The op hadn't left their original job so no P45 would exist.

I think 1247L on a non cumulative basis is as good is it's going to get to be honest.

If the original employer ever processed payroll again in the current tax year a significant tax refund could be paid which would make life even more complicated!

Penguin_

If you are on a career break & you haven't been terminated by your original employer, this would make me think they are reporting you as a live employee who hasn't worked at all in the month. I would assume from there you would get a pro rata'd refund of PAYE that you have paid from the start of the financial year.

Dazed_and_C0nfused

It looks they are omitting them from the payroll run at the moment.  Which is probably a good thing in the circumstances.

Thanks for your reply. My old employer has put me as on a career break so not receiving any payments from them and havent had any payslips or anything from them since I stopped that job.

kmslidka

Just wondering why I would be at risk of underpaying tax if I have remain on the same 1247L taxcode with the two employers in turn? I will never be working/ paid for the two roles simultaneously as the current one started the day after the original job put me on a "break" and I will not be going back to the original job until the current post ends. 
I won't be getting any payments from the original job until August 2024 when I go back to it. They advised me that this was the best way to handle the secondment rather than processing a p45 and then making me resubmit all my new start paperwork again in 2024.

Dazed_and_C0nfused

It's if they do, for whatever reason, process payroll for you, that would be the issue.

You would then be getting the benefit of two lots of tax code allowances.

sheramber

While not working for two employers at the same time you are on the payroll with two employer at the same time, albeit one is , hopefully, not operating the payroll

If your original employer carries forward your pay and tax to each month and operates  the code 1247L a tax refund will arise as you have not had any more pay.  if that continues each month you will be refunded tax each month. But you are not due to get that tax refunded as it has been correctly charged.

That would result in tax underpaid at the end of the year.

kmslidka

sheramber said:

While not working for two employers at the same time you are on the payroll with two employer at the same time, albeit one is , hopefully, not operating the payroll

If your original employer carries forward your pay and tax to each month and operates  the code 1247L a tax refund will arise as you have not had any more pay.  if that continues each month you will be refunded tax each month. But you are not due to get that tax refunded as it has been correctly charged.

That would result in tax underpaid at the end of the year.

Thanks for explaining this as that makes more sense. I'm pretty sure they won't be processing me and have kept my account inactive for the 2 years that I will be away. I can call them anyway to make 100% sure that is the case!