Tax... Argh!

[Matt]

So I received my new tax coding notice yesterday stating that my tax code is going to be 692L rather than the usual 944L/BR/whatever is should be.

The reason for this change is because I owe £502.20 in tax and they are going to deduct this from my tax free allowance over the year. I have to pay tax on an additional amount in order to pay this back. Gay!

So I phoned up HMRC to see what the hell this was about as I had no letters regarding the 500 quid. They mentioned a tax refund I had received a couple years ago was actually a mistake because their calculations were wrong based on my employers information and therefore they want the money back. I could either continue with the tax code or pay them the 500 quid.

Basically I changed jobs half way through a year which meant their calcuations were wrong. Apparently I hadn't informed them with a P45 before a P60 or something. I don't understand these things!

Whos at fault? Me? HMRC? Old employer? New employer?

This sucks... I know it's not really money out of my pocket as such but it's still annoying.

 

[Matt]

New job started on 7/6/2011, tax refund cashed in on 25/5/2012 (few days after receiving but don't know exact date).

I believe the accountant for the new employer was slow to submit my P45 which caused HMRC to calculate incorrectly and give me the refund.

However... That's quite a big gap in the dates... Surely the P45 would have been submitted and calculated WAY before the refund was sent to me. Lets say it took 2 months.. That's still over half a year before the refund.

Anyone understand this?

 

[maggi200]

Technically you will be liable. You received £500 more than you should of, it's annoying as the timing means realistically you won't still have that same £500 to repay it.

You should of provided a p45 or filled out a p46 when joining your new employer, but that would usually result in an over payment and not an underpayment. The issue will be someone has put the tax to date in as a figure larger than the actual, I would imagine.

The way it has been dealt with though, I feel is incorrect and there is some missing information. Unless you're receiving some benefits somewhere or something beyond this figure, they won't reclaim that much more than you owe. Have you been lucky enough to speak to one of the more human employees at hmrc yet?

 

[Matt]

Yes I spoke to someone straight away who explained why I was being charged (I didn't receive any letters prior to this) but didn't really sound like they wanted to help me. I phoned a "local" number rather than the 0845 number. Didn't even have to wait.

I'm going to assume the problem is the accountant for the company I work for now as he appears to be slow at submitting anything. I provided my P45 when I started and left it with them to do whatever it is they have to do with it (or should I have done something? :S).

The amount of the cheque I received was 501.20, they claim that I owe 502.20. The pound difference doesn't bother me and the amount other than that is the same so...

I'm just glad that I am repaying this through my tax allowance and haven't received a demand to pay it back immediately. :s

 

[Matt]

I know that regardless of who is to blame I still have to pay it back. I just want to know how this happened so I can ensure it won't happen again.

Tax refunds are awesome... and that was my first ever one! Not so lucky

 

[gavin-h]

Matt, in your position I would talk to my new employers' human resource department, tell them that after talking to HMRC you believe the error is due to slow submission by the accountant, and ask if they can help you to "offset" the repayment.

Tell them that paying back £500 to HMRC over a year will leave a £40 hole in your monthly budgeting and that you are concerned you may go overdrawn. Even if you aren't and you won't, it's worth talking to human resources because they might just be sympathetic and you could gain on the deal.

Gotta be worth a try, but don't go steaming in all bolshy at them, be reasonable and calm but make the point that you are suffereing because of the company's error, and you never know. And if you do get a result, try and keep the smile off your face....