P800 Tax Calculation help

[di30]

Re: P800 Tax Calculation help

Me again.

J called in for half an hour, and she read the posts, and wanted me to thank you on her behalf, if she gets round to it, she may join up once she's connected back up to also thank you herself.

She said everything you said makes sense to her, and she will let me know to let you know if she requires any help, letter wise etc.....

She is more at ease now.
Her hubby has not been working he came out due to health issues some years back, so she is the main earner, they have 3 children, and receives the top up tax bens as well, working tax/child tax etc.

As the tax credits had details of the income earned from the 2 jobs, she assumed they already held the details, because it was provided to them on tax renewal. She clearly remembers working from 2 separate copies of P45, employee copies to give the details.

A BIG thank you.

[SXGuy]

Re: P800 Tax Calculation help

Im always telling my mates to check their payslips, you be suprised how many people just file them away thinking they are correct when they may not be.

A friend of mine was on the wrong tax code for most of the year before i pointed it out to him. I find alot of big companies muck around cos they think they can,

Like when someone has left and they are found to have owed extra holiday entitlement, what they are ment to do is issue a final payslip again but tax them on a T0 code, a lot of big companies just pay them gross and issue no payslip and say, your in charge of the tax due, its a clear mistake made by them, but they dont care!

[di30]

Re: P800 Tax Calculation help

The overpayment from the previous year, should be a seperate issue to this, so its still due to be paid to her yeah.

I dont know whether they would pay the full amount out while deciding on the other mess or whether they would hold up everything until its resolved though, perhaps she should also mention that she has an underpayment due to be paid and would like it sent to her while they investigate this mess.

Yes ok then. Brill advice, cheers again.

I hope this never happens to us, it would do my head in lol.

[SXGuy]

Re: P800 Tax Calculation help

The overpayment from the previous year, should be a seperate issue to this, so its still due to be paid to her yeah.

I dont know whether they would pay the full amount out while deciding on the other mess or whether they would hold up everything until its resolved though, perhaps she should also mention that she has an underpayment due to be paid and would like it sent to her while they investigate this mess.

[di30]

Re: P800 Tax Calculation help

yes id think so, clear mistake by her employer, infact she should write to the address on that leaflet you scanned, and explain , exactly what her employer told her about not adding the ytd figures on her payslip after submitting her P45, as they "dont do it till the end of the year" and they have caused an underpyament of tax, through no fault of her own, and its her opinion that they acted unfairly and should be liable for the tax due.

In theory she has until April to battle this out so tell her to get cracking with it now.

As a heads up, its possible they may uphold the decision to deduct the extra tax from her payslip next year, but she will have a right to reject their findings and have an independant inspector look at it, which 9 times out of 10, will find in her favour, so tell her to stick with it!

If she needs help on formulating a letter let me know and ill draft one up.

Great thank you.
I know she called to her mum's this morning to email the employer (as she is offline at present) and has details by email as well, so she could print that off as proof.

That is fab, i shall let her know thank you.

Another thing as well, would J be entitled to the refund from the other year they also sent? As they were going to use that to help reduce the underpayment?

Cheers.

[SXGuy]

Re: P800 Tax Calculation help

yes id think so, clear mistake by her employer, infact she should write to the address on that leaflet you scanned, and explain , exactly what her employer told her about not adding the ytd figures on her payslip after submitting her P45, as they "dont do it till the end of the year" and they have caused an underpyament of tax, through no fault of her own, and its her opinion that they acted unfairly and should be liable for the tax due.

In theory she has until April to battle this out so tell her to get cracking with it now.

As a heads up, its possible they may uphold the decision to deduct the extra tax from her payslip next year, but she will have a right to reject their findings and have an independant inspector look at it, which 9 times out of 10, will find in her favour, so tell her to stick with it!

If she needs help on formulating a letter let me know and ill draft one up.

[di30]

Re: P800 Tax Calculation help

Yes that does sound about right, so this would be down to the employer/payroll then I take it?

[SXGuy]

Re: P800 Tax Calculation help

ok, so they changed the tax code but didnt add her ytd figures to her payslip after this.

That would result in an underpayment of tax, so it is owed, but they have clearly messed up here, they shouldnt have done it that way!

[di30]

Re: P800 Tax Calculation help

Di thats bollox.

As soon as they submit her P45 she should have been taken off BR and put on her correct Tax Code.

BR is basically all taxable, so a straight 20% would be deducted from her Gross pay every week.

Did they change her Tax Code when they submitted the P45 or did they keep her on BR?

If they kept her on BR then shes overpaid tax! So why HMRC say shes underpaid puzzles me.

It sounds like a right fuck up if you ask me.

Hiya

Yes they changed the tax code as soon as they received the P45 from the previous employer.

HMRC electronically received the details in Sept 2010. (sent by the employer).

[SXGuy]

Re: P800 Tax Calculation help

Di thats bollox.

As soon as they submit her P45 she should have been taken off BR and put on her correct Tax Code.

BR is basically all taxable, so a straight 20% would be deducted from her Gross pay every week.

Did they change her Tax Code when they submitted the P45 or did they keep her on BR?

If they kept her on BR then shes overpaid tax! So why HMRC say shes underpaid puzzles me.

It sounds like a right fuck up if you ask me.

EDIT: and another thing, if for whatever reason she didnt have a P45, then a P46 should be issued which would clearly show its her only job, and she would then also be put on the correct tax code.

You dont leave P45 details off until the next year because they only apply to the current year, April to April, P45 would mean nothing a year later.

[di30]

Re: P800 Tax Calculation help

Hiya

Thanks again for the input (J) not got here yet but she did ring me.
The employer contacted her after she emailed them, and confirmed that the HMRC received the P45 details (also confirmed) by them in Sept 2010.
J was paid monthly for the previous job and was being taxed at BR code with new employer whilst waiting for the P45 to come through, as it had taken that month.
The new employer told her on the phone today that as soon as they received he information, they forwarded on the relevant section to the HMRC, as its done electronically, the HMRC did receive it, which was why they sent a letter to question about the income in October last year.


The new employer confirms that the previous income was not added to the new income, as their's is done at the end of the tax year, where they did not include the income of the previous employment.

[SXGuy]

Re: P800 Tax Calculation help

she recalls questionning if the income previously earned from the earlier employer will be added on to the current weekly payslips, and was informed that they do this differently, so being naive she thought nothing of it any further and trusted them to deal with these matters.

I dont know what they mean by doing it differently, the only difference with P45 submissions i know of, is something called RTI (Real Time Information) which is being piloted at the mo, comes into force next April, but all that is, is submitting details along with pay details each pay period, the P45 details would still need to be added to her payslip.

The only time P45's arnt needed to be submitted are if she earned below the Lower earnings limit. But again a record of her income would still need to be carried over.

Otherwise mistakes happen, as an example, say you worked 1 job from Period 1 to period 5, then left and started a new job at Period 6.

First job would have 5 Periods of tax allowances reducing the tax paid, then the second job, if missed previous paye details, would think she hadnt worked for 5 periods of pay and give her all those allowances again. By adding her previous pay details, it would calculate tax due by adding what shes already earned, deducting the tax allowance at that period, then deducteding tax already paid, to leave whats due.

But isnt the procedures for the new and old employer to forward these details to HMRC once they received them (p45 details)?

Yeah that is how its usually done, but, some employers do some crazy things, ive known some employers to mark the P45 as the date they left 2 or 3 months after actually leaving because they forget to do it at the time, or they forget to submit the info on time, all sorts of things.

[di30]

Re: P800 Tax Calculation help

Excellent (J) will be coming over tomorrow, I shall show her all your posts for her to read, and I also think it would be a good idea for her to get in touch to ask about submission dates of the P45 to the HMRC.

As far as I am aware, from what I can recall, she did say something yesterday about - she recalls questionning if the income previously earned from the earlier employer will be added on to the current weekly payslips, and was informed that they do this differently, so being naive she thought nothing of it any further and trusted them to deal with these matters.
But isnt the procedures for the new and old employer to forward these details to HMRC once they received them (p45 details)?

The letter she received from HM customs (Oct 2011) and they confirmed that they had received information from the employer about the income blah blah, so that section of HMRC did receive the full income details. (These details are the same shown on the P800 letter).

Anyway, thank you again for all this info, your a star, I didnt know what to suggest to her myself as up to now (fingers crossed) I've not been in that position.

Will get her to read this tomorrow, cheers.

[SXGuy]

Re: P800 Tax Calculation help

Compliance department is a seperate building i think, they are all linked via their systems but as with most organisations, left hand doesnt always know what the right is doing, and if they wernt looking for it, they may not spot it.

Seems to me theres two issues here, and depending on the answer really depends on what she can do next.

Its good to bare in mind, that as with law, what HMRC consider reasonable is down to interpretation, so any argument needs to be clear and state facts only, no room for wriggling out.

Her employer simply confirming they received the P45 isnt good enough in my opinion, she needs to ask them to confirm it was submitted to HMRC and the date of the submission. Should be easy enough to do, all submissions get an email to confirm receipt.

Her old employer should also confirm the date they submitted their part of the P45.

Once she gets a date from her new employer, she needs to check her payslip to see if the previous employers ytd paye details have been added or not.

Some employers dont always submit them asap, so it may not be on the first payslip, so ask her to check the payslip dated directly after the date they confirm submission.

If the ytd figures are there, she owes nothing, so she would need to show the proof to HMRC.

The fact they believe she worked two jobs at once says to me that the previous employer failed to submit his part of the P45, but if the new employer did everything correctly, she would still owe nothing.

If her new employer failed to add the paye ytd figures to her payslip, then it is a mistake on his part, and she would need to argue this with hrmc.

Theres so many variables to which road to take as it stands, so im just speculating what she should do at this point.

But the main thing is, to get these confirmation dates and check her payslip, then she will be better placed to take it further.

Ill be honest, ive never known the employer to pick up the tab for an error in tax before, its usually fixed by issuing a new tax code, but if she can show she did all the right things and is being penalised for it, then im guessing they will ask the employer to cough up.

[di30]

Re: P800 Tax Calculation help

Leaflet she left with me yesterday about what she can do (HM customs).