Why would someone constantly get letters saying they've underpaid on tax?

I've been in full time employment for over 20 years and not once have I ever received a letter saying I've underpaid on tax. Unfortunately I've never received a letter saying I've overpaid either.

My wife last year received a letter saying she'd underpaid but this was due to some balls up with paperwork as her change in job was somewhere around the new tax year so basically they thought she was working 2 jobs when she wasn't. Anyway, it got sorted.

Relative of mine never received a single letter while working for the same employer as me. Has been in their current employment for 3 years and for 3 years they've received letters saying they've underpaid on tax. 

Seems a bit suss to me. Are their (employer) accounts team likely doing something wrong?

Comments

  • I've been in full time employment for over 20 years and not once have I ever received a letter saying I've underpaid on tax. Unfortunately I've never received a letter saying I've overpaid either.

    My wife last year received a letter saying she'd underpaid but this was due to some balls up with paperwork as her change in job was somewhere around the new tax year so basically they thought she was working 2 jobs when she wasn't. Anyway, it got sorted.

    Relative of mine never received a single letter while working for the same employer as me. Has been in their current employment for 3 years and for 3 years they've received letters saying they've underpaid on tax. 

    Seems a bit suss to me. Are their (employer) accounts team likely doing something wrong?
    Does your relative have taxable income other than which they receive from this employer?  Another job?  Interest?
  • I've been in full time employment for over 20 years and not once have I ever received a letter saying I've underpaid on tax. Unfortunately I've never received a letter saying I've overpaid either.

    My wife last year received a letter saying she'd underpaid but this was due to some balls up with paperwork as her change in job was somewhere around the new tax year so basically they thought she was working 2 jobs when she wasn't. Anyway, it got sorted.

    Relative of mine never received a single letter while working for the same employer as me. Has been in their current employment for 3 years and for 3 years they've received letters saying they've underpaid on tax. 

    Seems a bit suss to me. Are their (employer) accounts team likely doing something wrong?
    There is nothing unusual about someone who is employed owing tax.

    It could be for countless different reasons and without having details of the calculation it's impossible to even know what the reason could be.  

    It might be their employer is, to some degree, at fault but equally it could be totally unrelated.
  • tealady
    tealady Posts: 3,735
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    I underpaid tax last year due to my state pension starting.
    I was offered either to have this years code adjusted or to pay HMRC in one go.
    Nothing "sinister" just a change if circumstances 
    Find out who you are and do that on purpose (thanks to Owain Wyn Jones quoting Dolly Parton)
  • Ksw3
    Ksw3 Posts: 328
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    Benefits in Kind I.e company car or health insurance are taken into account when  considering the tax due. Mine were accounted for by adjusting my tax code but I used to get letters every year saying I had tax to pay.
  • B0bbyEwing
    B0bbyEwing Posts: 1,176
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    I've been in full time employment for over 20 years and not once have I ever received a letter saying I've underpaid on tax. Unfortunately I've never received a letter saying I've overpaid either.

    My wife last year received a letter saying she'd underpaid but this was due to some balls up with paperwork as her change in job was somewhere around the new tax year so basically they thought she was working 2 jobs when she wasn't. Anyway, it got sorted.

    Relative of mine never received a single letter while working for the same employer as me. Has been in their current employment for 3 years and for 3 years they've received letters saying they've underpaid on tax. 

    Seems a bit suss to me. Are their (employer) accounts team likely doing something wrong?
    Does your relative have taxable income other than which they receive from this employer?  Another job?  Interest?
    See that's the thing - no. All the reasons given in this thread don't apply.

    They don't have another job, they don't have mass savings that mean they're going over the threshold in interest. They have no company perks like cars or anything like that. 

    I'm not saying anything is 'sinister', what I'm saying is it's strange. They go from one job where this doesn't happen to another job earning the same kind of money where it does. Nothing else has changed in their circumstances, just different employer. Even what they earn is basically the same - so instead of £450 a week after tax they get £500 a week after tax. Ok it's more but surely that shouldn't be the reason? It's not like they've shifted to a higher rate tax.
  • chrisbur
    chrisbur Posts: 4,013
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    edited 24 October 2023 at 5:15PM
    The only way to see what is causing this is with accurate information of the payments involved....
    For each payslip 
    Taxable gross
    Tax paid
    Week no
    Tax code
    Taxable gross to date
    Tax paid to date

    From P45 1A
    Gross
    Tax
    Tax code
    Week/month

    I would guess that the person concerned is unlikely to give these details so it must remain a mystery, but I would guess it involves the job change in some way.

  • sheramber
    sheramber Posts: 18,622
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    A change of employer can cause an underpayment if two pays are paid out in the same tax month. First employer pays for part of the month and charges tax for the current tax month eg paid up to 20 th of month. New employer pays out at the end of the same month and also charges for the current month. This results in the employee getting personal tax allowances twice for the  same month which results in the tax for that month being underpaid. 
  • B0bbyEwing
    B0bbyEwing Posts: 1,176
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    sheramber said:
    A change of employer can cause an underpayment if two pays are paid out in the same tax month. First employer pays for part of the month and charges tax for the current tax month eg paid up to 20 th of month. New employer pays out at the end of the same month and also charges for the current month. This results in the employee getting personal tax allowances twice for the  same month which results in the tax for that month being underpaid. 
    But would that impact the next year & the year after that too?
  • chrisbur
    chrisbur Posts: 4,013
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    edited 25 October 2023 at 7:49AM
    The answer will be in the actual figures as I said above either you can get the details of these payslips with the different net pays
    IE " so instead of £450 a week after tax they get £500 a week after tax."  
    or you will never know.
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