HMRC mistake?

daveaspy

I changed jobs 3 months through this tax year, I've just got my P60 which doesn't show the previous employment and thus my payroll dept have taken around 700 less tax than they should have over the rest of the year.

HMRC informed my current employer in August of my tax code and that I had no previous earnings in this year, its all there in my online gov tax account though! (I was told they didn't need a P45 these days as HMRC do it electronically ). Are they going to expect me to pay that back in one lump when I do my SA, or would they scrape that much back through the following years tax code (24/25?)

Dazed_and_C0nfused

If you complete a Self Assessment and want to delay payment for as long as possible then you need to file the return by 30 December at the very latest.

And make sure you tick, or don't tick, whichever way round it is, the box relating to having tax owed for 2022:23 collected via your tax code.

Assuming you earn enough (on PAYE) for this to be a valid option then you will pay the tax across the 12 months from 6 April 2024 to 5 April 2025.

If the total owed is £3000 or more that won't be an option but £700 should be coded most of the time.

p00hsticks

Did your current employer not ask you to either provide your P45 from your previous employer or to fill in a new starters checklist ? 
Starter checklist for PAYE - GOV.UK (www.gov.uk)
This should have picked up that you had three months previous earnings to be taken into account. 

daveaspy

p00hsticks said:

Did your current employer not ask you to either provide your P45 from your previous employer or to fill in a new starters checklist ? 
Starter checklist for PAYE - GOV.UK (www.gov.uk)
This should have picked up that you had three months previous earnings to be taken into account. 

my previous employer never sent me a P45 and when I mentioned this to my current employer they said it doesn't matter, HMRC will send us what we need electronically, which they did, but it was incorrect.

On the bright side, I guess I got a bit of an interest free loan if I can delay repaying it until 2024

TheBanker

Given you didn't get a P45, and HMRC doesn't seem to be aware of your previous earnings, is it possible your employer never declared them and passed the tax onto HMRC? 

If I was you, I would be double checking that my National Insurance record was correct, due to the impact of gaps on pension eligibility. And also checking that the previous employer correctly passed on any pension contributions etc to the relevant party!

sheramber

Did you complete a new starter form stating you had had another since 6 April but did not have a P45?.

daveaspy

TheBanker said:

Given you didn't get a P45, and HMRC doesn't seem to be aware of your previous earnings, is it possible your employer never declared them and passed the tax onto HMRC? 

If I was you, I would be double checking that my National Insurance record was correct, due to the impact of gaps on pension eligibility. And also checking that the previous employer correctly passed on any pension contributions etc to the relevant party!

thanks, everything is present and correct in my online gov tax account, all earnings from both employments, tax and NI up to date, and pension contributions visible from prev employment - nothing dodgy gone on there. The only error seems to be when HMRC sent my tax code and "previous earnings" to my current employer, a glitch in the system I guess, and that set their PAYE parameters wrong. You'd think a previous earnings of zero would be questioned by my payroll dept, I'd think that was quite rare unless you start in April and worth double checking with the employee.

MalMonroe

Hi, I see that everything is okay in your online HMRC account so that's great.

But HMRC can, and do, make mistakes.

When I retired they made a big mess of my tax codes and it took me over 12 months to get that sorted out. They kept arguing that I was in the wrong but I was in the right and they ended up refunding me £650. It was at that time when a lot of pensioners had been allocated incorrect codes so I wasn't the only one but they wouldn't give the refund without a good fight!

They charged me tax last year and the year before, too. I was able to message them each time and they corrected the errors, which meant giving one of my (small) private pensions a different tax code each time, so I did get a refund. But if I hadn't kept an eye on my HMRC account I'd have been paying tax I shouldn't have been paying. 

In my experience (and that of many others), a company's payroll department just does what HMRC tells them to. So you can't blame them. 

I always think if you suspect that something's wrong, challenge it because nobody's perfect, not even our government (cough). If it's not wrong, you've lost nothing. 

Glad that it's all sorted out now. 

Pennywise

daveaspy said:

TheBanker said:

Given you didn't get a P45, and HMRC doesn't seem to be aware of your previous earnings, is it possible your employer never declared them and passed the tax onto HMRC? 

If I was you, I would be double checking that my National Insurance record was correct, due to the impact of gaps on pension eligibility. And also checking that the previous employer correctly passed on any pension contributions etc to the relevant party!

thanks, everything is present and correct in my online gov tax account, all earnings from both employments, tax and NI up to date, and pension contributions visible from prev employment - nothing dodgy gone on there. The only error seems to be when HMRC sent my tax code and "previous earnings" to my current employer, a glitch in the system I guess, and that set their PAYE parameters wrong. You'd think a previous earnings of zero would be questioned by my payroll dept, I'd think that was quite rare unless you start in April and worth double checking with the employee.

An employer has no power/right to contact HMRC to question a tax code.  HMRC would have ignored any contact by your employer unless you'd appointed them as your tax agent.

When HMRC issued the wrong tax code details, why didn't you notice and question it?  You'd have been sent a copy of it showing zero previous pay or it would have been on your online personal tax account.

p00hsticks

Pennywise said:

When HMRC issued the wrong tax code details, why didn't you notice and question it?  You'd have been sent a copy of it showing zero previous pay or it would have been on your online personal tax account.

From the way the OP describes it, I'm not sure they had the wrong tax code though. 

It sounds to me as if they were on the standard 1257L or similar, but the problem has arisen because the current employer didn't take account of any previous earnings that year. Therefore for the first few months there would have been little or no tax deducted, as payroll would have assumed that there was more unused allowance available from the first few months than there actually was. 

I agree that  if the OP had been checking their payslip though, they should have noticed that there was little or no tax being deducted in the first few months of their new employment and querying the reason then. 

daveaspy

Tax code was standard so HMRC didn't send me anything about previous earnings, they only sent that to my employer. I wasn't thinking about payroll double checking with HMRC, but with me - "We've had no P45, no new starter checklist, is this number HMRC have given us right?". In some cases it will be right, in most cases its probably odd someone didn't earn anything for three months, and HR knew I'd been working right through.

Looking back at my payslips the first month of new employment was about what I expected tax wise, the second month was almost nothing (odd, but early days), then the third month it went up higher than the first month and stayed like that for the rest of the year. It always seems to take a couple of months to settle after changing jobs so I assumed that's what was going on, it wasn't like they didn't take any tax for three months!