P800 notice - who is at fault here and how can I ensure this doesn't happen again?

wageslave23

Please be patient, I am highly anxious right now and looking at a roughly £400 deficit each month for something I have no control over.

I have had one job, part-time for nearly six years. This has always been minimum wage.

In March 2022 I started another job, also at minimum wage, to take me to full-time hours. Total hours worked since March 2022 is 41 a week a across two jobs.  The split is 25hrs in newer job, 16hrs in older job a week.

When I started that job I filled out the new starter checklist, checking the relevant box that said I do not have a P45 because this is my second job or whatever the wording is.

I then, as expected as I would now be over the personal allowance, started having tax taken off my monthly pay. This was taken off my new job, but none off the old job.

Last Friday I received a notice that I owe over £1000 for the tax year 22/23.

I  checked my tax account and saw that the job I have had for nearly 6 years was missing and it was showing the new job as the only employment. I certainly didn't remove it myself, I don't even think I could.

I, like a lot of people do not have that amount of money just laying around, so I dutifully spent 45 minutes waiting to get through on the phone to HMRC.

The gentleman told me that both employers had been using the personal tax code, which isn't allowed of course. I have no way of checking this as I haven't received a payslip from original job in a long time.

He then told me that I'm already over £500 tax short for this tax year.

Then he added my original employer onto the tax account and changed the tax codes to be correct, making my personal allowance this year less than £9000 to reclaim the tax. This only corrects this tax year, not last years. This will also mean that my NI contributions will increase.

He told me I had 3 options to repay the tax from last year. 1, to pay in one go by January. 2, to call the simple assessment team and ask them to set up a direct debit, which can be over however long I need. 3, to pay it manually myself, bit by bit, but that I need to keep track of it because if I miss a payment I'll get debt letters etc etc.

I asked him who was at fault here and how I can stop this happening again and he said nobody and it's tough. I asked him how I can possibly budget not knowing who is going to pay me what or if they are going to tax me correctly or not. Again, tough, out of my hands.

So, next phone call to the simple assessment team. The lady immediately told me that the man had been wrong, that while it's not due until Jan 2024, I need to start making payments and she can't set up a direct debit. I got a bit emotional here, I just cried a bit and apologised profusely because I know it's not her fault but I'm already looking at at least £300 month less than I'm used and my leeway is like £75 each month, so where am I supposed to get money to 'chip away' at it? Anyway, she then says she can set up a direct debit, but not until January. Right. Then she told me to go online to sort it out and clearly wanted me off the phone.

I have how had a panic attack and am falling behind on my hours because I absolutely cannot work in this state.

To summarise, my question is, who shouldn't have been using the personal allowance tax code and do I actually have any recourse for someone else's error?

To be clear, I have no intention of avoiding tax, I actually believe everyone should be paying more!

chrisbur

Which box did you select on the starter checklist a b or c

wageslave23

chrisbur said:

Which box did you select on the starter checklist a b or c

Thank you for replying. C

Dazed_and_C0nfused

You will need to pay the tax but can take some time to pay this for 2022-23 as its not due for payment until January 2024.

Why do you think your National Insurance will change?

wageslave23

Dazed_and_C0nfused said:

You will need to pay the tax but can take some time to pay this for 2022-23 as its not due for payment until January 2024.

Why do you think your National Insurance will change?

Thank you, do you know for sure that I'll be able to pay it slowly after Jan24? I'm a bit perturbed by the conflicting information given by HMRC.

Presumanly NI is calculated on my total earnings, and up to now it's believed my total earnings are roughly £9000 less than what they actually are?

Dazed_and_C0nfused

Unless they are connected jobs National Insurance is calculated separately on each employment.

p00hsticks

wageslave23 said:

To summarise, my question is, who shouldn't have been using the personal allowance tax code and do I actually have any recourse for someone else's error?

Unfortunately, there's no straightforward answer to that one. Where there's more than one employer, either can use the personal allowance tax code, with the other using BR or similar, or the allowance can be split into two separate codes over the two jobs.

The employers generally have no idea what - if any - other job or others sources of income you have, and have to simply use the appropriate code based on the new starter checklist unless and until HMRC provide them with something different. 

HMRC will eventually pick up if an individual is overpaying or underpaying tax - hence the P800 you've now received, but unfortunately are unlikely to do so until after the end of the tax year. 

It sounds like somewhere along the line an error was made when you started your second job, and you've been taxed as if it was your only job. But I suspect that it would be difficult to show over twelve months on whether that was the result of an error by you, your new employer or by HMRC. And as far as I'm aware whoever it was woudn't make any difference to the fact that you now owe additional tax as a result.  

We are all guilty of not paying too much attention what our payslips say, but you were really the only in a position to quickly see that the code was being applied to both sets of employment and could have queried it much sooner if you had spotted it. (I do have a lot of sympathy for the position you now find yourself in though).

wageslave23

p00hsticks said:

wageslave23 said:

To summarise, my question is, who shouldn't have been using the personal allowance tax code and do I actually have any recourse for someone else's error?

Unfortunately, there's no straightforward answer to that one. Where there's more than one employer, either can use the personal allowance tax code, with the other using BR or similar, or the allowance can be split into two separate codes over the two jobs.

The employers generally have no idea what - if any - other job or others sources of income you have, and have to simply use the appropriate code based on the new starter checklist unless and until HMRC provide them with something different. 

HMRC will eventually pick up if an individual is overpaying or underpaying tax - hence the P800 you've now received, but unfortunately are unlikely to do so until after the end of the tax year. 

It sounds like somewhere along the line an error was made when you started your second job, and you've been taxed as if it was your only job. But I suspect that it would be difficult to show over twelve months on whether that was the result of an error by you, your new employer or by HMRC. And as far as I'm aware whoever it was woudn't make any difference to the fact that you now owe additional tax as a result.  

We are all guilty of not paying too much attention what our payslips say, but you were really the only in a position to quickly see that the code was being applied to both sets of employment and could have queried it much sooner if you had spotted it. (I do have a lot of sympathy for the position you now find yourself in though).

Thank you for taking the time to clarify this for me and for your sympathy.

I have spoken to my older employer who says she thought it odd that I didn't get a new tax code when I started the new job. (Didn't think to question it...)

Now going through my various direct debits to work out what I can cancel to try and get closer to what I will actually be earning. Will have to save dealing with the big bit that I owe for another month.

I was thinking this week I should get a third job in a supermarket (neither current employer can offer me more hours) to make up a shortfall, but now I've been stung by this, adding another employer seems like a bad idea.

Funnily (or not) enough I'm also paying back UC overpayment from two years ago, a smaller amount, because of an employer not reporting my earnings on time.

It feels like I'm at the mercy of something, but not sure what.

molerat

I was thinking this week I should get a third job in a supermarket (neither current employer can offer me more hours) to make up a shortfall, but now I've been stung by this, adding another employer seems like a bad idea.

The tax system does usually work but the important thing to take home from this is that you need to check your on line tax account whenever something changes to make sure it has all gone smoothly and everything is in order. Any errors can then usually be rectified fairly quickly before they become a problem.  I currently have 3 income streams and the tax codes allocated are all correct ensuring the right amount of tax is deducted. I did have to contact them at the start of the tax year as there was an error which was sorted out there and then. The bottom line is that it is your responsibility to ensure your tax affairs are in order, the reason why when an accountant messes up the tax return it is you that gets the fallout from HMRC

Jeremy535897

If you believe you will have trouble paying tax by the due date, see:
https://www.gov.uk/difficulties-paying-hmrc/pay-in-instalments

sheramber

wageslave23 said:

Dazed_and_C0nfused said:

You will need to pay the tax but can take some time to pay this for 2022-23 as its not due for payment until January 2024.

Why do you think your National Insurance will change?

Thank you, do you know for sure that I'll be able to pay it slowly after Jan24? I'm a bit perturbed by the conflicting information given by HMRC.

Presumanly NI is calculated on my total earnings, and up to now it's believed my total earnings are roughly £9000 less than what they actually are?

You can pay it slowly over the rest of the year up to 31 January 2024 without any interest being added.

If you want a payment plan after 31 January you would need to request that and will be charged interest on all amounts outstanding  after 31 January 2024 until it is paid.