BR code for 2 years for higher rate taxpayer. Help!

annieo · Postby **annieo** » Mon Mar 12, 2007 3:29 pm

I joined my company as a contractor in 2004. I was given a permanent contract after 3 months and completed a P46 due to P45 being misplaced. I have been employed for 2.5 years. I have relocated with them, had 4 salary changes, changed status by accepting a company car and medical insurance. My husbands accountant recently wrote to me advising me that I have underpayed my tax by a huge suicidal amount. I really dont know what my rights are. I understand it is up to the employee to look after payments to the IR. My Co is very big, professional etc etc. The net amount i am receiving is nearly exactly the same as my previous Co's so I never noticed a difference and did not check. How can i still be on a BR tax code after all of the changes that have happened?
Do I have any chance of claiming negligence of some kind for an employer who surely should have some checks in place to ensure their employees are not getting into trouble. The amount i owe will take me an estimated 7 years to pay off at the maximum monthly figure i can afford. Any advice is welcome...

wamstax · Postby **wamstax** » Mon Mar 12, 2007 3:53 pm

Code BR when you're getting enough to be liable at higher rates is a sin but exactly who is to blame? Did you never get a notification of your code number to be operated for 2.5 years.... maybe not? But if you thought about it if code BR (did you know) was only deducting tax at basic rate then surely you must have realised you were getting paid enough to be liable at higher rates.

OK so you were getting the same net as your previous employer but you must have had some idea if your gross salary was higher or lower and if your code was different. I assume that you also have car benefits and /or medical benefits and these will have contibuted to any underpayment. I am surprised that somebody getting a salary at a level sufficient to take them into higher rates of tax never had any inkling that anything was wrong.... Ok look to your employer if you must but the only person that knows an employees personal circumstances well enough to know if there is a problem is the employee.....
sorry I know it must be difficult to comprehend but I think you need to look closer to home for the person that is responsible (if HMRC don't play any part in the strange set of affairs). Presumably no action was ever taken by anybody to say hey the employee is liable to higher rates and we are only taking basic rate tax and also no tax return was completed by you to return any BIK's
sorry to be pessimistic
regards
bill@wamstaxltd.com

King_Maker · Postby **King_Maker** » Mon Mar 12, 2007 4:31 pm

I have just come across a similar case - not sure what the total underpayment will be. But it is likely to be well in excess of Â£60,000.

I am shortly to perform a "Spanish Inquisition".

wamstax · Postby **wamstax** » Mon Mar 12, 2007 4:42 pm

King I can follow quite easily how this can happen. Basically the employee fills in a P46 because he/she doesnt have P45 and possibly states other income/employment then does nothing about getting the tax code sorted out to get a higher code (because of personal allowances)but that would however end up with a lower net take home pay because of the taxing at 40% instead of BR.

You have to wonder why somebody just lets BR code operate forever and forever??? and Â£60K that must be on about Â£300K

Don't use the thumb screws too hard!!!
regards
bill@wamstaxltd.com
http://www.wamstaxltd.com

King_Maker · Postby **King_Maker** » Mon Mar 12, 2007 5:06 pm

Bill,

99.99% certain it's a P46 scenario.

I suspect HMRC never bothered to change the original BR Coding to D0.

Further review suggests, the underpayment(s) are nearer to Â£80,000!

We shall see........

wamstax · Postby **wamstax** » Mon Mar 12, 2007 5:10 pm

Phew.........!!!

I can see where you are going - Official error but I think that the employee cannot come out of the situation totally blameless if it is a P46 case left on BR.

Presumably an underpayment would have arisen or been notified within OE timescales?

OH well leave you to the thumbscrews
regards
bill@wamstaxltd.com

King_Maker · Postby **King_Maker** » Mon Mar 12, 2007 5:23 pm

I look forward to receiving copies of the relevant P6s (if any) from HMRC - after the employer has confirmed it has not received any.

However, I am encountering more and more instances of employers not actioning a P6 because they were "too busy"!

al_eebee · Postby **al_eebee** » Tue Mar 13, 2007 2:19 am

Took on someone & found a similar situation a few years back and managed to get interest and penalties remitted in full as returns had never been issued.

It does rather beg the question as to why if P11d's were presumably being submitted by the employer on this case it has taken so long to find and correct the error.

Cynic · Postby **Cynic** » Tue Mar 13, 2007 2:27 am

What was your employment status when you first joined the company?

Were you with an agency?

annieo · Postby **annieo** » Tue Mar 13, 2007 11:51 am

Hi. Very interesting comments back which seem to imply that the employee should take full responsibility.....
I began my contact on a fixed term contract for 6 months. The permanent contract was issued after 3. I completed my P46. I should point out that the reason the figure did not appear odd is that this companys payroll is pay due every four weeks and by the fact that in my previous Company my car was a very low grade in comparison to my last permanent role.

I still cannot believe how the company does not have a responsibility to at least check that their files are up to date and therefore highlight an error.