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Mistake by payroll department with Tax Code

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Comments

  • penners324
    penners324 Posts: 3,521 Forumite
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    Have they logged in to their personal hmrc account?

    Their tax code will be on their.

    Payroll's response indicates they've had an update from hmrc that makes the tax code 32L. Some / most payroll systems now get automatic updates of tax codes from HMRC.
  • jem16
    jem16 Posts: 19,649 Forumite
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    Have they logged in to their personal hmrc account?

    Their tax code will be on their.

    Payroll's response indicates they've had an update from hmrc that makes the tax code 32L. Some / most payroll systems now get automatic updates of tax codes from HMRC.
    Still showing 32LX. The problem lies with the Tax Basis that was used as opposed to the Tax Code itself. 

    Latest news is that payroll has finally listened to what has been explained to them. Apparently they have told my friend that they are raising an F1(or F2) with the tax office. Does anyone know what that means?
  • jem16
    jem16 Posts: 19,649 Forumite
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    Wires slightly crossed unfortunately. Payroll still don’t appear to understand that they’ve used the Tax Code issued by HMRC wrongly. All they’re doing is checking P6 and P9 notices.

    i think my friend is going to have to contact HMRC and ask for a cumulative code to sort the mess. 
  • LITRG
    LITRG Posts: 90 Organisation Representative
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    Hello, totally appreciate the cash flow issue, but your friend should rest assured that any over deducted tax should come back to her automatically: https://www.litrg.org.uk/tax-nic/how-tax-collected/pay-you-earn-paye/paye-end-tax-year#2
    If for whatever reason, there is an underpayment due to this issue, then you may find our guidance on 'employer error' helpful: https://www.litrg.org.uk/tax-nic/how-tax-collected/pay-you-earn-paye/paye-underpayments#7 
    Official Company Representative
    I am an official representative of LITRG (Low Incomes Tax Reform Group) part of the Chartered Institute of Taxation who are an educational charity. We are not part of MSE or HMRC. MSE has given permission for me to post on the Forum but this does NOT imply any form of approval of my organisation or its products by MSE. We can’t give individual advice, but if you require further help, we recommend that you contact a tax adviser, HMRC or one of the tax charities where relevant. You can find more information about where to get help with tax here. If you believe I am posting inappropriately please report it to forumteam@moneysavingexpert.com This does NOT imply any form of approval of my company or its products by MSE"
  • jem16
    jem16 Posts: 19,649 Forumite
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    LITRG said:
    Hello, totally appreciate the cash flow issue, but your friend should rest assured that any over deducted tax should come back to her automatically: https://www.litrg.org.uk/tax-nic/how-tax-collected/pay-you-earn-paye/paye-end-tax-year#2
    If for whatever reason, there is an underpayment due to this issue, then you may find our guidance on 'employer error' helpful: https://www.litrg.org.uk/tax-nic/how-tax-collected/pay-you-earn-paye/paye-underpayments#7 
    Yes we know it will be refunded eventually but that’s almost a year away by the time the tax year ends and reconciliation takes place. 
  • chrisbur
    chrisbur Posts: 4,258 Forumite
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    edited 6 August at 9:56PM
    jem16 said:
    Wires slightly crossed unfortunately. Payroll still don’t appear to understand that they’ve used the Tax Code issued by HMRC wrongly. All they’re doing is checking P6 and P9 notices.

    i think my friend is going to have to contact HMRC and ask for a cumulative code to sort the mess. 
    The P6 will have both the tax code and the tax basis so should confirm that the code is to be applied on a non-cumulative basis.  Just amending the tax code to a non-cumulative basis though will not correct the extra tax taken while it was on a cumulative basis, that will require a manual adjustment.
    Not sure why they are looking at the P9 (I am assuming they mean the P9X) which only has any relevance at the start of the tax year.
  • jem16
    jem16 Posts: 19,649 Forumite
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    chrisbur said:
    jem16 said:
    Wires slightly crossed unfortunately. Payroll still don’t appear to understand that they’ve used the Tax Code issued by HMRC wrongly. All they’re doing is checking P6 and P9 notices.

    i think my friend is going to have to contact HMRC and ask for a cumulative code to sort the mess. 
    The P6 will have both the tax code and the tax basis so should confirm that the code is to be applied on a non-cumulative basis.  Just amending the tax code to a non-cumulative basis though will not correct the extra tax taken while it was on a cumulative basis, that will require a manual adjustment.
    Not sure why they are looking at the P9 (I am assuming they mean the P9X) which only has any relevance at the start of the tax year.
    Yes the P6 should confirm that they have used the wrong Tax Basis for July and August although they managed to use it correctly for June. It’s getting someone to actually understand that which is the issue as whoever is replying certainly doesn’t appear to.

    As you say the problem is that even using it correctly from now on won’t fix the problem. She’s going to phone HMRC tomorrow morning.
  • penners324
    penners324 Posts: 3,521 Forumite
    Sixth Anniversary 1,000 Posts Name Dropper
    So the payroll department are incompetent?
  • jem16
    jem16 Posts: 19,649 Forumite
    Part of the Furniture 10,000 Posts Name Dropper Photogenic
    So the payroll department are incompetent?
    So far they appear to be.
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