Tax codes/underpaid, recruitment agency not paying...

Hi, I was wondering if someone could advice. Help is much appreciated.
I work full time through recruitment agency, my tax code has always been 810L, and I always paid taxes.
On 4th Sept 2012 I started additional job, part time, about 20h a week.
I have received letter from HMRC informing me about tax code changes. I was expecting this as I know it is different if you have two jobs.
Suddenly last week I did not receive my week pay from agency. When I called them I was told that they have information I owe money to HMRC (?). Agency told me they paid this money (over £560) to HMRC, and now they will take this from my salary, which means I will not receive anything next week and week after.
I called HMRC, after providing them all information, I was advised there was a mistake and my code for agency stays 810L and part time job will be BR.
I told this to the agency, and was advised as soon as they receive information from HMRC, they will contact me.

My concern here is... Is this how it normally works? Does the agency have rights to do this? Is this legal? I thought if I owe money for some reason (underpaid in the past or whatever) I would receive letter from HMRC informing me about this, so I could contact them and arrange repayments, in convenient time so it does not affect me that much.
I had no idea I had my money taken, all my direct debits did not go through which means I have to pay £8 for each one.

I feel powerless, could someone advise what can I do?
Thank you very much

Comments

  • Wywth
    Wywth Posts: 5,079 Forumite
    edited 25 October 2012 at 4:46PM
    paulina wrote: »
    Hi, I was wondering if someone could advice. Help is much appreciated.
    I work full time through recruitment agency, my tax code has always been 810L, and I always paid taxes.
    On 4th Sept 2012 I started additional job, part time, about 20h a week.
    I have received letter from HMRC informing me about tax code changes. I was expecting this as I know it is different if you have two jobs.
    Suddenly last week I did not receive my week pay from agency. When I called them I was told that they have information I owe money to HMRC (?). Agency told me they paid this money (over £560) to HMRC, and now they will take this from my salary, which means I will not receive anything next week and week after.
    I called HMRC, after providing them all information, I was advised there was a mistake and my code for agency stays 810L and part time job will be BR.
    I told this to the agency, and was advised as soon as they receive information from HMRC, they will contact me.

    My concern here is... Is this how it normally works? Does the agency have rights to do this? Is this legal? I thought if I owe money for some reason (underpaid in the past or whatever) I would receive letter from HMRC informing me about this, so I could contact them and arrange repayments, in convenient time so it does not affect me that much.
    I had no idea I had my money taken, all my direct debits did not go through which means I have to pay £8 for each one.

    I feel powerless, could someone advise what can I do?
    Thank you very much

    No this isn't the way it normally works

    From the HMRC website:
    If HMRC knows about your underpayment during the year

    HMRC will adjust your current year's tax code right away so that you don't continue to pay too little tax and send you a 'PAYE Coding Notice' telling you what this new code is. This will be based on the latest information that HMRC holds and will make sure that you pay the correct amount of tax for the rest of the year. However, this adjustment will not collect your underpaid tax.

    HMRC will also give you an 'estimate' of how much tax you underpaid during the time when your tax code was too high and explain how they’ll collect it by adjusting your tax code for the next tax year

    Bear in mind that the amount HMRC tells you is underpaid is only an estimate - we are just part way through the year and other changes may occur. HMRC may have to amend the underpayment when they check it again at the end of the tax year. You'll get another PAYE Coding Notice telling you what you have to pay back.

    Tell your employer you want your wages and detailed pay slip indicating gross pay, all the separate deductions and resultant net pay.
    Also ask them to pay any losses you incur (e.g. bank charges) as a direct result of their failing.

    You may also want to alert your bank to this failing and hope they will act sympathetically towards you whilst this is resolved.

    More useful information can be found on the Citizens Advice self-help website www.adviceguide.org.uk or by calling the Citizens Advice Consumer Helpline (0845 4040506) or you could contact your local Citizens Advice Bureau which you can find at www.citizensadvice.org.uk.
  • zygurat789
    zygurat789 Posts: 4,263 Forumite
    First Anniversary Combo Breaker
    It would help if you could detail the tax code changes
    The only thing that is constant is change.
  • 00ec25
    00ec25 Posts: 9,123 Forumite
    Combo Breaker First Post
    the employer (agency) MUST (ie is legally required to) act on any and all tax code notifications it receives from HMRC, it has no discretion in this matter. If HMRC have sent a coding norice to the agency then they had to process it and must continue you on that code until HMRC tells them otherwise

    you need to sort out with ther agency what notices they have recieved and make sure that they get an update from HMRC asap so you revert to the normal 810L and BR codes for jobs one and two
  • Bailey101
    Bailey101 Posts: 310 Forumite
    It sounds like the agency have applied the BR code on a cumulative basis, which means that the payroll software will think it should have taken effect from April, and causes a huge tax bill because it's been backdated. This happens a lot when HMRC send out new codes, and it's doubtful that they would discuss it with your payroll dept - hence them not being able to amend it themselves and avoid the tax being taken.

    I do payroll for a lot of companies through my job adn come across this situation fairly often, and it's unfortunate and a pain in the backside but nothing can be done by your employer unfortunately - they're juist following the law. You should however get the tax back when your code is changed again.

    xx
  • Thank a lot for your help
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