I owe HMRC money due to a tax code error??
Watch this post4 yrs ago, I quit my full-time job. Two weeks later, joined an agency, which sent me to a workplace where I have worked since. So in all, I was working for the agency in my present job for 6 mths, and then I decided to become permanent, so my workplace was now paying me my wages.
The following year I received a letter from HMRC stating I had not paid enough tax and I owed them £400. I am naive when it comes to tax issue to rang them. They told me, I had been put on the wrong tax code between the agency and my work place, and due to this owed the tax office the money.
I have already paid half back (I could have paid in full at the time but refused out of principle) and just received a bill for the remainder of the money I owe. I am very angry about all this because no one is owning up to making a mistake. I don't pull my own tax codes out of a magic hat. The agency boss actually became quite annoyed with me when I made an enquiry with him, and he was adamant the mistake was nothing to do with his agency.
My workplace have double checked the last 4 yrs and they cannot see a problem their end. So who is responsible for this? I have had no control over what tax code I use, surely that's payroll or the tax office?
Can someone enlighten me please so I can better understand? TIA
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First of all let me say that I'm not an expert on this but I used to be a practice manager and was responsible for doing the payroll. When I had a new employee they gave me their P45 from their previous job which had their NI number, tax code and income and tax paid to the end of that employment. I'm sure that after I had taken the details from the form I had to send it to our local tax office with my employee's new employment status. If they didn't have a P45 then I had to complete a P46 and submit this. I found the following on Google:
What Is the Difference Between a P45 and a P46? A P45 is a summary of an employee's salary and the tax paid over the past financial year in the United Kingdom. It is issued when an employee leaves a job. A P46 is filed by a new employer in cases where an employee does not have a P45.
The tax office always informed me when/if an employee's tax code was changed. Do you know when or why your tax code was changed so that you have apparently paid insufficient tax? Have you got copies of your P60 for the years which you have been working? This will show your tax code, salary and deductions. Your employer should be able to give you copies if you have lost them and you should then be able to see what your tax code has been and when it was changed. If you write to HMRC only send photocopies of your documents as things sometimes disappear in to a "black hole".
I don't know if that's any help - it is a complicated subject and it is quite a few years since I had to do the payroll. My only other thought is that someone in your personnel department might have made a mistake when entering your details on the payroll perhaps by transcribing numbers in the wrong order and that has led to the discrepancy.
Good luck in trying to sort this out.