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Tax issue leaves me with no wage

edited 30 November -1 at 1:00AM in Basic rights at work & Redundancy
5 replies 25.8K views
shaun_2012shaun_2012 Forumite
19 Posts

I am looking for a bit of advice I am working for an agency at the moment called HR Consultancy and have been on assignment with them since 12th October 2012.

I have been on Tax code 810L W1 until this week when they received a coding notice from HMRC to change me to 810L – when they have done this their system has advised them I owe £188.80 tax – leaving me £14.99 as a week’s wage. I wasn’t notified of this until 9.30am this morning after payroll had been run leaving me no time to fix the error.

I called the HMRC who advised that they hadn’t told my employer to claim any Tax back and hadn’t done any Tax Calculation to work out I owed £188.80 – and they advised me what the agency had done was incorrect and to advise them to re-run my payroll on a W1 basis this week to allow me to get wages whilst they figured out how the agency had come to get these figures as they aren’t correct, and even if I did owe them money it would be April when they collected it back by amending my tax code to collect some back each week/month

The agency refused and stated it’s done we can’t change it.

What is my position here – the HMRC is saying what has been done is wrong and the agency have left me with £14.99 for a week to live on – which doesn’t cover my direct debits or even give me enough money to get to work.



  • CAB_Malvern_Hills_representativeCAB_Malvern_Hills_representative Organisation Representatives - Private Messages may not be monitored
    153 Posts

    What they have done to you may constitute an unauthorised deduction of wages. The adviceguide factsheet - Employer withholds your pay explains how you should approach this issue. Whilst deductions can legitimately be made for the correct amount of Tax/NI it is unlikely that they can make such a large deduction in one go especially since the Inland Revenue appear to have said this should not have happened.

    Follow the link below to the factsheet :

    If you have a problem with your tax that is contributing to this situation you will need to get advice from the Inland Revenue about it .see below :
    Official CAB Representative
    I am an official representative of CAB. MSE has given permission for me to post in response to questions on the CAB Board. You can see my name on the companies with permission to post list. If you believe I’ve broken any rules please report my post to [email protected] as usual"
  • peliroccopelirocco Forumite
    8.2K Posts
    Part of the Furniture 1,000 Posts Name Dropper
    I called the HMRC who advised that they hadn’t told my employer to claim any Tax back and hadn’t done any Tax Calculation to work out I owed £188.80

    Actually I would say HMRC have done just this by issuing a new coding notice , the agency payroll dept would have enterred the new coding and it would have worked out you have underpaid tax and calculated a wage based on this .

    Not sure this counts as unlawful deduction of wages tho?

    Whats the employer to do ? , HMRC have issued the notice , the employer cannot overide it unless they issue a new one , they are responsible for deducting and ultimately paying over the tax to HMRC
    Vuja De - the feeling you'll be here later
  • peliroccopelirocco Forumite
    8.2K Posts
    Part of the Furniture 1,000 Posts Name Dropper
    Thinking on it , I assume you didnt hand a p45 in to the agency when you started work ? , they should have for you to fill in a p46 to get you a more realistic code , I would guess the week 1 bit has meant you havent been paying any tax ?
    Vuja De - the feeling you'll be here later
  • As soon as payroll received your new coding from HMRC they have to action it. Removing the week 1/month1 indicator will automatically work out the new rate you should have paid tax for the whole tax year to date. April 6th 2012 to now. On the bottom of the tax coding from the revenue to the company it will also show any figures they want input as your todate pay for 2012 - so anything you earnt in tax yr 2012/2013 prior to starting with them in October. They will have used all this information and their system will calculate what you should have paid this year correctly and deduct accordingly if money is owed to HMRC or as it would have refunded you had you overpaid! If there was enough in your pay for all tax to be deducted that was owed it would take it to ensure your liability is correct going forward. It probably would have highlighted that a large percentage of your wage was being taken and at that stage the payroll clerk could have contacted the revenue and said they didnt want to action the new coding as the effect it would have. However, it is technically not their responsibility to do that. They are only obligated to action the coding as instructed. HMRC saying they hadnt instructed the payroll to reclaim any tax isnt true, by issuing a tax code adjustment this is exactly what they have done. Removing a week1 indicator will do exactly that! As for the payroll withholding your wage unlawfully in my opinion they havent. They have followed an instruction issued by a legal department which they have to do! However, as I said under the circumstances they do have the abillity to check with the revenue that they really want that step taken due to implications to the individual but they dont have to they only have to do as told by HMRC and in this case it was remove the week 1 indicator! As for rerunning the payroll this isnt a possibility once a computerised payroll is finished and bacs released you cant just rerun. What they could do is next week put you back on week1 but without instruction from the revenue it is unlikely they will do that and to be honest it isnt in your interest. Putting you back on a week 1 now after a deduction has taken place will not give you a refund or monies back as no previous earnings or tax liability are taken into consideration for a week 1. Obviously this doesnt help you right now. The payroll clerk has done as instructed and unless they made a typo on previous earnings etc (which you should be able to see from the side of your payslip where it shows your todate figures! do these look right?) they are within their right to say no to doing anything they have a piece of paper from HRMC to say they have acted lawfully.
  • edited 14 December 2012 at 3:31PM
    lijaloolijaloo Forumite
    265 Posts
    Part of the Furniture Combo Breaker
    edited 14 December 2012 at 3:31PM
    I deal with payroll on a daily basis. The situation can arise that no wages are due because of a change from W1 to cumulative. When that has happened I have spoken to HMRC to confirm the change and explain that doing so would leave nil or just a small amount due. In every case HMRC have advised to keep deducting tax on a W1 basis. I would therefore suggest that the OP asks HR to contact HMRC for confirmation of the change and maybe make an advance to tied you over until such time as they can redo your payslip and make the payment
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