Underpaid Tax Disaster

JJDebs

Hi there, Firstly- I’m a nurse, I know a lot about nursing. Tax not so much!! 

I had letters galore from HMRC saying I paid incorrect tax in 2 previous years. They think it will also affect this tax year just ended but no calculation just yet. I am paying them £320 a month for 2022-3, plus this month they changed my tax code and took £500 of arrears from what they think I owe for 2024/5. They have now said I also owe £7k for 2023-4. 

The issue is this-
1. I had a work benefit which my employer did not inform HMRC of for 2 years so I was not taxed on it. 

2. HMRC had 2 separate jobs listed for me, however they have advised me that their system usually puts the personal allowance on one job and automatically puts second job on BR tax. Unfortunately this didn’t happen so my second job was never taxed at BR but some random personal allowance code. 

So I’m in a mess! And can’t see it ending. Now I am a bit more aware I have already had to speak to them 3 times since January due to errors on my account- 2 random changes of tax code, and wrongly ending an employment (!). I’m at a loss how they keep just changing my account, with no obvious reason. 

Can I contest any of this at all due to their errors? Every time I speak to them they tie me up in knots because I end up with no clue what they are talking about! Help! 

Hoenir

JJDebs said:

Can I contest any of this at all due to their errors? Every time I speak to them they tie me up in knots because I end up with no clue what they are talking about! Help! 

Might be worth spending some time with a tax expert and get them to go to the bottom of everything for you. 

eskbanker

JJDebs said:

Hi there, Firstly- I’m a nurse, I know a lot about nursing. Tax not so much!! 

I had letters galore from HMRC saying I paid incorrect tax in 2 previous years. They think it will also affect this tax year just ended but no calculation just yet. I am paying them £320 a month for 2022-3, plus this month they changed my tax code and took £500 of arrears from what they think I owe for 2024/5. They have now said I also owe £7k for 2023-4. 

The issue is this-
1. I had a work benefit which my employer did not inform HMRC of for 2 years so I was not taxed on it. 

2. HMRC had 2 separate jobs listed for me, however they have advised me that their system usually puts the personal allowance on one job and automatically puts second job on BR tax. Unfortunately this didn’t happen so my second job was never taxed at BR but some random personal allowance code. 

So I’m in a mess! And can’t see it ending. Now I am a bit more aware I have already had to speak to them 3 times since January due to errors on my account- 2 random changes of tax code, and wrongly ending an employment (!). I’m at a loss how they keep just changing my account, with no obvious reason. 

Can I contest any of this at all due to their errors? Every time I speak to them they tie me up in knots because I end up with no clue what they are talking about! Help! 

Tax codes are only ever a provisional attempt to collect expected tax liabilities via PAYE deductions, and in themselves they don't dictate what those liabilities actually are, so the best bet will be to review your correspondence from HMRC and/or the data presented within your online personal tax account, in order to identify your total taxable income (and benefits) for each of these tax years and how much tax you've actually paid.  Feel free to share the figures on here....

silvercar

If you can search out (from your P60 is easiest) the total amount earned and the amount of tax paid for each employment in each tax year, people can then work out what tax you should have paid. That would be a good starting point.

Bookworm225

JJDebs said:

Can I contest any of this at all due to their errors? Every time I speak to them they tie me up in knots because I end up with no clue what they are talking about! Help! 

so you have been told you underpaid tax in previous years
HMRC have written to you explaining how much and why 
Does one of the letters contain a payment plan showing how they will recover what you owe?

What caused the problem is secondary to the fact you should have noticed what was going on with your own pay at the time it happened. You cannot assume that a split tax code compared to a BR tax code when you have 2 jobs is automatically HMRC's "error", the taxpayer has to take some responsibility for their own tax affairs.

As you are struggling to understand what they are telling you then you need to either pay someone to look at it and explain it or you need to put your full info on here, otherwise no one can answer your question

Albermarle

Have you registered to be able to see your online personal tax account ?

This will not solve all confusion/issues, but it is useful to be able to see it.

Unfortunately HMRC do make errors; employers sometimes send them the wrong info and employees do not check the details properly. So everybody is at fault really.

savergrant

"The issue is this-

1. I had a work benefit which my employer did not inform HMRC of for 2 years so I was not taxed on it. "

Did you think you were being taxed on it, or that no tax was due?
It might help if you gave more detail.