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Where Taxpayers and Advisers Meet

New employer deducted much less tax, now I am in huge arrears while filing self assessment

dl11pl
Posts:2
Joined:Mon Jan 25, 2021 6:49 pm
New employer deducted much less tax, now I am in huge arrears while filing self assessment

Postby dl11pl » Mon Jan 25, 2021 6:54 pm

Hello,
Self assessment is usually a 1 hour job for me as there are not enough complications to my tax filing. I say usually because I just started my self assessment right now and got a rude shock.

Apparently my new employer that I had joined in 2019 deducted very less tax (I did wonder about the additional money every month but put it down to the higher salary that I had negotiated for this new job).

Now I am in a big hole and will have to pay a massive sum (>£30K), an amount that I do not have in my possession and will not have in the near future.

What options do I have? Is there any way I can fight this with my current employer?
Any help is greatly appreciated.
Many thanks!

robbob
Posts:3146
Joined:Wed Aug 06, 2008 4:01 pm

Re: New employer deducted much less tax, now I am in huge arrears while filing self assessment

Postby robbob » Mon Jan 25, 2021 8:41 pm

did you not check your payslips?
what taxcode was used?
did you check this taxcode was right and suitable?

Generally employer uses tax code given or reasonably generic one from limited choice - employee checks and will normally raise any issues with hmrc (presuming employer doesnt help)

Tax codes are often a bit of a guessing game so really unfortuantely the onus is normally on the employee to do thier own research.

For example you start new job that is second job employers defaults to basic rate tax at 20%- if you owe 40% tax as you are higher rate taxpayer and have used up basic rate band anywhere the onus is on you to flag up that your tax ocde shoudl be D0 not BR.

HMRC may not have helped here and your employer may not have helped here but i would default to it being your problem and not theirs.

Hopefully if its genuine mistake your best bet is urgently to contact hmrc to arrange suitable payment plan. HMRC havd not helped if their fancy (el crapola) coding computer has failed miserably to realise the problem - the advisors at hmrc love it when you blame the computer coding system they will simply chortle and normally say "we shouldnt comment" followed by some witty remark.


Obviously if your employer has actioned a known wrong code then that blurrs the lines a bit.

dl11pl
Posts:2
Joined:Mon Jan 25, 2021 6:49 pm

Re: New employer deducted much less tax, now I am in huge arrears while filing self assessment

Postby dl11pl » Mon Jan 25, 2021 10:47 pm

Thanks,
I have to admit that I should have checked the codes but ignorance is bliss I guess and I just assumed it would go smooth as usual.
Now that I am giving it a closer look, I can see that in most months, the tax deducted amounted to around 20%, which is too less for my gross income level. I did not really pay attention at that time as I had received a sizeable higher salary whilst changing jobs that included a sign-on bonus, hence I attributed the higher net pay to that. In retrospect, I should have checked it out.
Do you think I can challenge my employer on the 20% deduction that was too less?


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