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Discussion in 'PAYE letters 2010' started by [email protected], Nov 2, 2010.
Great news - well done.
I am a higher rate tax payer, and have been with my current employer for over 11 years.
I only have one job / source of income.
Just received P800 for Tax Underpayment of nearly £5.5k! (cummulative for 08/09, /09/10, and 10/11)
Now I didn't really understand all of this until I have just started researching it all - it transpires that my employer has been using a tax code BR for me since I commenced employment!
I have never received any code notices etc. or any comms at all regarding my tax code. I assume that I gave them a P45 or filled in a P46 at commencement of employment, but I cannot remember.
This would clearly seem to be unfair and either HMRC or my employer (large FTSE 100) at fault (PAYE, single income, 11 years, no tax codes issued).
Am I correct, and shouled I therefore use letter template 1 (ESC A19) or template 2 (employer fault) or combine the two?
Any help really appreciated - we are a single income family with a 9 month old baby, and really can't afford £5.5k!
You may be best starting a new thread,anyway they can't chase you for years 08/09, /09/10 but Its definitely a HMRC or your Co fault,you need to have a word with your wage Dept about why coding BR was issued.
Look through this forum and you will find how to go about it,there is a link on this thread which I cannot duplicate.
In all fairness, if the questioner has been with their employer for 10 years HMRC has had ample opportunity to spot the error. And in such a case, where a tax code was set that many years ago, it is probably unreasonable to expect the company to have any recollection of why. The case actually goes beyond the 7 years for which PAYE records have to be kept. It could conceivably be something as simple as wrong P46 box ticked by the employee by mistake when they started.
As a higher rate taxpayer wouldn't self-assessment come into play?
Thanks for the replies.
I can start a new thread, but I thought that this was a kind of master thread for these P800s?
I have never been asked to do any self assessments, I was under the (potentially niave) impression that I was a very simple tax example, and that PAYE would just be doing everything correctly!
Its interesting, as when I started at my company I was "just" into the higher rate, so I probably actually overpaid tax on the BR code.
In recent years, with promotion and bonus this equation has changed. So joy of joys I now get a large bill!
So - what should be my course of action - send letter template 1 ESC A19. It is surely reasonable of me to have assumed that my tax affairs were in order, and HMRC has failed to act for over a decade! They have also let the arrears build over >2 years so therefore should waive even the most recent year?
Also - I now know I am on the wrong tax code, so should I also fix that, or will that complicate things?
Lots of questions, if you can only answer one then what should I do next?
see here and use the employer at fault option 2 in stage one ...
My case (sorry about the double post, I'm new and don't know what has happened here. If a mod could delete the first that would be great.)
I've recently received a P800 asking for £559.23 for underpayment of tax for the tax year 2006/2007.
I was employed at the time and paid tax via PAYE.
Is there a time limit HMRC should have asked for this back in? I'm finding bits online saying they have 4 years but can't find anything official.
Also do I have grounds to use the ESC a19 as they must have had information regarding this tax year for some time now and failed to act upon it for the last 4 years never mind 12 months.
Any advice on how to proceed would be fantastic.
I got a phone call from my boss this afternoon (i'm a PAYE) and he told that he's just done the wages but my hmrc have helped themselves to most of it... left me with less than £500.
I call them up and they have changed my tax code but can't explain why, they didnt know where I work or how long i've been there, said I've been claiming benefits when I havent refused to accept they had made a mistake... amongst other things said it must be my fault for not sending them my P45 (complete rubbish, i've never been asked to and always make sure my employer has all they need) also said it must be my employers fault for not questioning the change in tax code and told me to tell them to do the payroll again(!/?) the guy on the phone was ok at first but when I wouldn't go away got very difficult to deal with...
basically, I can't pay my mortgage or most of my bills let alone celebrate christmas and according to the guy on the phone all I can do about it is write them a letter and hope that they sort it out for next month.
I dont know what to do... any help/advice appreciated
They must have sent your boss a P6, I think. Before they did this they should have sent you a P2 explaining why your tax code has changed. Did you get one?
they have sent something to my parents house which i have not yet seen... why they have sent anything there is yet another mystery...
i forgot to mention that my boss said he thinks that they are saying i have underpaid but the idiot on the phone wasn't clear, he just kept using jargon and trying to get rid of me...
This illustrates the importance of reading and trying to understand the significance of official letters. If your parents had forwarded the letter to you then you probably would have had time to do something about this before the monthly pay run.
You need to see what they sent you as soon as possible because their letter should explain why they changed your tax code. My understanding is that they aren't supposed to make in-year tax code changes that would cause hardship.
Thanks for your help. With respect... they need to write to me where I live not where I used to live some years ago.
Well they are definately causing hardship, I don't know what i'm going to do... the guy on the phone says it's not their problem...
Thank you for your reply.
So you are suggesting that I use "employer at fault" rather than the "HMRC not using info available in good time" line of defence.
What is my rationale for the employer being at fault? I am new to all of this, but would assume that the base case is that the employer should only have used BR code on a temporary basis and should have changed this sooner than 11 years!?
However I do not know whether HMRC have ever issued a coding notice to my employer, so if they have not then can I state that the employer is at fault?
Just trying to establish which course of action would be most effective for me.
Are you saying that you did not get a new notice of coding every year?
I have never had a notice of coding!
Joined the co. over 11 years ago, and this is the first comms I have ever had from HMRC.
The only paperwork I have ever received from anyone is P60's each year from my employer.
Why were you put on a BR code at the start? You say you are a higher rate tax payer - but that is not the case if you are on a BR code.
Based on what you say I don't think your employer is at fault - so you need to try sample 1.
Do remember that it is your responsibility to check your tax and you did receive a P60 each year so would have seen that the higher rate was not applied but a straight 20% or the rate in force at the time.
I do not know why I was ever put on a BR code.
I honestly cannot recall whether I handed in a P45, or filled out a P46, but from what I have read over the last few days I assume that perhaps I filled in a P46 and said that I had already worked for another company in that tax year (I joined in June, so had worked for my previous employer Apr - Jun). Therefore my current employer put me on BR code?
Why they picked a BR code I do not know, I was only just into higher rate on annual salary, so perhaps its because it was June and I was still in basic rate threshold?
All over 11 years ago, so very tricky to know.
I thought that all of my tax orders were fine, assumed that PAYE would look after it all.
Until recent years the loss of personal allowance has more than cancelled out the gain from 20% v 40%, so that is why I had assumed everything was fine. I expect I was actually overpaying for a number of years.
Surely it is reasonable of me to expect my employer or HMRC to have put me on the right tax code at some point in the last decade? Or is that wishful thinking, and I should have noticed the code that I knew nothing of being incorrect?
Thanks for any help. 5.5k is a bit of a shock!
PS. This tax area is really quite enlightening once you start looking at it, but for someone who has just been single job PAYE all their life I knew nothing about tax codes etc. and I like to think I am reasonably intelligent! Would be useful if they actually taught you this in Schools! Thanks to all on this forum for helping to enlighten me.
Can you clarify what you mean by ...
"Until recent years the loss of personal allowance has more than cancelled out the gain from 20% v 40%"
What do you mean by the loss in personal allowance?
OK, I assume that BR means that I get taxed 20% on everything.
So if on 44k pa, tax = £8.8k.
If personal allowance = 6.475k
Basic Rate = 0-37,400
Higher Rate - 37,401+
So first 6.475k is tax free
So taxable salary = 37.525k
BR = 37.4k = £7.48k
HR = 0.125k = £0.05k
Total Tax = £7.53k if taxed correctly.
So on 44k getting taxed at BR would mean overpaying tax by nearly £1.3k
Or am I missing something?
You need to check each P800 - the calcs will be on there for each year as the rates are different.
Good luck with it