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Where Taxpayers and Advisers Meet

Underpayment of tax - is HMRC right?

Joni007x
Posts: 2
Joined: Tue Nov 06, 2018 3:45 pm

Underpayment of tax - is HMRC right?

Postby Joni007x » Tue Nov 06, 2018 4:01 pm

Hello,

Hope someone can help me figure out if I pay the right tax as I think I'm paying more than should do.
I will try to explain as clearly and quickly as possible.

In tax year 2015/16 I was working for a company getting paid every 4 weeks, which resulted in an underpayment of £165.40 which should have been adjusted off my tax code from April 2017 but for some reason it hasn't.

In tax year 2016/17 I was still with this company until 29th July 2016. Started new job (pay every month) 1st August 2016. I got 2 more payslips from company no 1, one pay in August and one pay in September. They have refunded most of my tax, so on my p45 I have £5300.58 income and £43.80 tax paid.
Job no 2 paid me £11723.28 until April 2017 and took £875.80 as tax.

HMRC is now saying that I underpaid by 438.40 as I had 2 jobs at the same time (I didn't, just got paid after I left) and adjusted my tax code to 1016L.

Could you guys please tell me if this is correct? Any help would be much appreciated.

robbob
Posts: 2800
Joined: Wed Aug 06, 2008 4:01 pm

Re: Underpayment of tax - is HMRC right?

Postby robbob » Wed Nov 07, 2018 9:53 am

Reference paye this is often a guesstimate so bear that in mind , particularly if you get paid twice in the same tax period from different jobs which looks like it was the case here.

In tax year 2016/17 I was still with this company until 29th July 2016. Started new job (pay every month) 1st August 2016. I got 2 more payslips from company no 1, one pay in August and one pay in September. They have refunded most of my tax, so on my p45 I have £5300.58 income and £43.80 tax paid.
Job no 2 paid me £11723.28 until April 2017 and took £875.80 as tax.

HMRC is now saying that I underpaid by 438.40 as I had 2 jobs at the same time (I didn't, just got paid after I left) and adjusted my tax code to 1016L.
total pay 17023
allowance 11000
tax 20% on 6023 = 1204

tax deducted = 876+44= 920

tax owed 284 - add in the 165 previous year = total underpaid tax 448

Note if your tax code was anything other than 1100L for 16/17 this could result in extra tax being owed not factored into my calcs above - presuming the code adjust was for earlier year tax or some other reason why you could earn less tax free

SteLacca
Posts: 443
Joined: Fri Aug 07, 2015 2:17 pm

Re: Underpayment of tax - is HMRC right?

Postby SteLacca » Wed Nov 07, 2018 2:09 pm

Your old employer got this wrong. They should have issued you with a P45 when you left and processed the two remaining payments as payments after leaving. By doing so, they would have taxed those payments at the basic rate. You would have given the new employer your P45 and they would have taxed you as though there had been no change of employment.

This would have avoided the underpayment that arose as a consequence of it being done incorrectly.

Joni007x
Posts: 2
Joined: Tue Nov 06, 2018 3:45 pm

Re: Underpayment of tax - is HMRC right?

Postby Joni007x » Thu Apr 11, 2019 10:42 pm

Hi again.
First of all thanks for previous advice. I forgot one thing out of the equation which was a rebate. I got a refund from payday loan which I paid tax for: £103 for £1900 refund.
At first I had problems getting this accepted and taken off my underpaid tax but second time I talked to someone they admitted this should be taken into account, that's when I got the tax code 1016L.

Now I got my payslip for end of the year. It reads the following :

Total gross 18302
Tax paid 1626.40

I think I overpaid tax by 200 even though I had to pay the arrears (minus the £103 tax paid on refund). Can someone please check this for me so I can write to Hmrc?

D&C
Posts: 61
Joined: Thu Dec 22, 2016 10:04 pm

Re: Underpayment of tax - is HMRC right?

Postby D&C » Fri Apr 12, 2019 11:05 pm

The tax figure is correct for the pay (assuming this is going to be your P60 pay figure) and tax code of 1016L.

But that is meaningless unless you tell us how your tax code was calculated i.e. what are the components which made up the 1016L.

And do you have any other taxable income in 2018:19 other than the pay of £18,302? If so what is it and how much is it.


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