Mistake by payroll department with Tax Code

penners324

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

penners324 said:

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

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

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 

jem16

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

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

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

So the payroll department are incompetent?

jem16

penners324 said:

So the payroll department are incompetent?

So far they appear to be.