£14 Tax deducted from £86.40 earnings via shambolic employer

£14 Tax deducted from £86.40 earnings via shambolic employer

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BlimeyCharlie

Original Poster:

903 posts

142 months

Thursday 20th October 2016
quotequote all
Hi

My partner has recently taken a part time job, working 6 hours a week, £7.20 an hour, at a local company, walking distance etc.
What could possibly go wrong?

Despite filling in a form for the employer stating that this is her only employment this tax year, she has been taxed £8.60 on £43.20 earnings the first week, Tax code for this was 0T W1, and the second week a bargain £5.40 in tax, from the same £43.20, Tax code 82T W1. Only got the 'wage' slips today, after various delays and questions not being answered.

So she has earned £72.40 after tax, on earnings of £86.40, which is £6.03 an hour, which is not minimum wage!

She has asked her employer what is going on (politely), who also 'forgot' to pay her the first week until reminded, and she blames an accountant. But employer now says my partner must ring HMRC to get an emergency tax code...despite filling a form out stating this is her only job this tax year (which logically means just over £10k can be earned free of tax this tax year).

Ringing HMRC may well get an answer, but will she continue being taxed if some idiot decides to, and more importantly will she have a refund from HMRC, or will she have to wait until end of Tax year because of some fools who don't know what they are doing/make it up as they go along?

Your comments are greatly appreciated.


KungFuPanda

4,333 posts

170 months

Thursday 20th October 2016
quotequote all
Has she had another job this financial year? Perhaps the tax office are still taxing her based on the average projected owning based on her old pay level.

TooMany2cvs

29,008 posts

126 months

Thursday 20th October 2016
quotequote all
BlimeyCharlie said:
So she has earned £72.40 after tax, on earnings of £86.40, which is £6.03 an hour, which is not minimum wage!
Minimum wage is £7.20/hr, she's earning £7.20, so nothing wrong there.

BlimeyCharlie said:
But employer now says my partner must ring HMRC to get an emergency tax code...despite filling a form out stating this is her only job this tax year (which logically means just over £10k can be earned free of tax this tax year).
So she didn't have a P45 from a previous employer, but did she give the employer anything from HMRC giving her tax code for the year?

If not, then instead of...
BlimeyCharlie said:
but will she continue being taxed if some idiot decides to
...they're actually not just doing the right thing, but they only thing they are legally able to do.

BlimeyCharlie said:
and more importantly will she have a refund from HMRC, or will she have to wait until end of Tax year
It may get balanced out when she gets her code from HMRC, it may be a refund at the end of the tax year.

BlimeyCharlie said:
because of some fools who don't know what they are doing
Indeed, but I don't think it's her employer.

InitialDave

11,901 posts

119 months

Thursday 20th October 2016
quotequote all
https://www.gov.uk/tax-codes/letters-in-your-tax-c...
"If your tax code has ‘W1’ or ‘M1’ at the end

W1 (week 1) and M1 (month 1) are emergency tax codes. This means your tax is based only on what you are paid in the current pay period, not the whole year. These codes are sometimes known as ‘non-cumulative’.

Which code you get depends on whether you are paid weekly or monthly.

They appear at the end of your tax code, for example ‘577L W1’ or ‘577L M1’.

Emergency tax codes are usually updated automatically after you’ve given your new employer your P45. You will always start a new tax year with a normal tax code, not an emergency one."


https://www.gov.uk/emergency-tax-code
"Tax code 0T can also be used as a temporary code. It means you don’t get any Personal Allowance you’re entitled to until your tax code is updated.
When you might get an emergency tax code

You may be put on an emergency tax code if you’ve started:

a new job
working for an employer after being self-employed
getting company benefits or the State Pension

Getting the right tax code

Your tax code is usually updated automatically after you’ve given your employer details of your previous income or pension. This is usually from your P45 - if you don’t have one, your employer may ask you to fill in a ‘new starter checklist’.

You’ll be sent your new tax code in a PAYE Coding Notice. HM Revenue and Customs (HMRC) will also tell your employer or pension provider. Your next payslip should show:

your new tax code
adjustments to your pay if you were paying the wrong amount of tax

You can contact HMRC if you still think you’re on the wrong tax code."


AyBee

10,535 posts

202 months

Thursday 20th October 2016
quotequote all
Blimey Charlie!!

IMO, it usually takes a while for HMRC to work out what's going on and catch up, so in the mean time, they tax her. She'll get it back once they realise what's going on.

ETA: Think it's a bit harsh to blame her employer though.

BlimeyCharlie

Original Poster:

903 posts

142 months

Thursday 20th October 2016
quotequote all
Thanks for replies, but I'm really not getting how an employer can advertise a job that pays £7.20 an hour, bearing in mind the employee (my partner) has given all information that the employer has asked for, for the employee to only get paid £6.03 an hour?

If she has told (via a form) the employer it is her only job this tax year, why tax her? Why ask? If she'd had/got another job I could understand the 'confusion', but not in this instance.

Contrast this to a job I started recently whereby I was not taxed on earnings just under £200, so got the advertised rate (minus a small deduction of NI).
There was no emergency tax codes. Our situations are exactly the same.

To be frank, getting a refund after April is no use now, hence why the job was taken.

We are 6 months into the tax year, so she is 'only' going to be earning a quarter of her tax-free allowance in this tax year. Why tax her?



TooMany2cvs

29,008 posts

126 months

Thursday 20th October 2016
quotequote all
BlimeyCharlie said:
Thanks for replies, but I'm really not getting how an employer can advertise a job that pays £7.20 an hour, bearing in mind the employee (my partner) has given all information that the employer has asked for, for the employee to only get paid £6.03 an hour?
She is being paid £7.20/hour.

It's just that she's paying tax on it. That's not the job's fault or the employer's fault.

Pay is ALWAYS quoted as before tax, because the tax paid depends on the employee's situation. And, in this case, the employee has not provided sufficient information to be paid without tax being withheld.

2 sMoKiN bArReLs

30,254 posts

235 months

Thursday 20th October 2016
quotequote all
Should they not have used 1100 tax code M1 basis? (Rather than 0)

That would have solved the problem?

InitialDave

11,901 posts

119 months

Thursday 20th October 2016
quotequote all
BlimeyCharlie said:
There was no emergency tax codes. Our situations are exactly the same.
Read the links in my post above.
"W1 (week 1) and M1 (month 1) are emergency tax codes."
"Tax code 0T can also be used as a temporary code. It means you don’t get any Personal Allowance you’re entitled to until your tax code is updated."

What was your tax code for that £200 job?

Fastpedeller

3,872 posts

146 months

Thursday 20th October 2016
quotequote all
All the above. Because some people are less honest, the employer has to do what is required of them by HMRC. They can't just take the employee's word that they haven't had any earnings. Be pleased that she is working for a company that is doing it correctly and honestly. Ok. it's a bit frustrating, but once the correct tax code is issued all will be correct.

BlimeyCharlie

Original Poster:

903 posts

142 months

Thursday 20th October 2016
quotequote all
TooMany2cvs said:
BlimeyCharlie said:
Thanks for replies, but I'm really not getting how an employer can advertise a job that pays £7.20 an hour, bearing in mind the employee (my partner) has given all information that the employer has asked for, for the employee to only get paid £6.03 an hour?
She is being paid £7.20/hour.

It's just that she's paying tax on it. That's not the job's fault or the employer's fault.

Pay is ALWAYS quoted as before tax, because the tax paid depends on the employee's situation. And, in this case, the employee has not provided sufficient information to be paid without tax being withheld.
Yes, I agree about insufficient information, but after filling out a form specifically asking for details of her earnings/job situation this tax year we stupidly thought that was enough information to avoid this being the case. Had she not filled a form out/given information I could see this being logical.

Having just rang HMRC myself, I can report they (HMRC) have sent the employer a 'new' tax code, 1100L, and they have also stated that the tax paid so far will be paid back by employer, as opposed to having to wait until end of this tax year. to apply for refund.


InitialDave

11,901 posts

119 months

Thursday 20th October 2016
quotequote all
BlimeyCharlie said:
Having just rang HMRC myself, I can report they (HMRC) have sent the employer a 'new' tax code, 1100L, and they have also stated that the tax paid so far will be paid back by employer, as opposed to having to wait until end of this tax year. to apply for refund.
Yes, this is completely normal.

She should make sure that her employer knows that you've been told this, and ask them to confirm they have received such from HMRC.

grumpy52

5,584 posts

166 months

Thursday 20th October 2016
quotequote all
Until you have a tax code and your employer has notification of the code ,you will be taxed at 20%.
I have the problem of casual employment with my main job and also agency work .
It's fun doing my tax return each year !

BlimeyCharlie

Original Poster:

903 posts

142 months

Thursday 20th October 2016
quotequote all
InitialDave said:
BlimeyCharlie said:
There was no emergency tax codes. Our situations are exactly the same.
Read the links in my post above.
"W1 (week 1) and M1 (month 1) are emergency tax codes."
"Tax code 0T can also be used as a temporary code. It means you don’t get any Personal Allowance you’re entitled to until your tax code is updated."

What was your tax code for that £200 job?
My Tax code was/is 1099L for the earnings above, which to me made perfect sense. If I carried on earning that (circa £200) per week I would still only be earning 60% of my personal allowance at the end of this tax year, as I started the job in September. So no tax due.
Hence my confusion when my partner, in exactly the same circumstances as me, is taxed as being 'unaccounted for in the system' despite filling in the same kind of forms as I did, basically accounting for myself this tax year.

The employer is shambolic (in my opinion) because 'it' does not pay unless reminded, after only 2 weeks of work, and can't explain anything to do with deductions made from earnings.
My opinion is that the form my partner filled-out is probably sitting somewhere gathering dust, hence the 'panic' with deductions.

A good start!

Thanks also for posting the information about tax codes and when/why they may be used.
Hopefully this 'situation' has now been resolved (see a post from 5-10 minutes ago I wrote) but I do wonder how people can 'run' a business without understanding anything to do with accounts, tax etc etc.

Soon be Christmas.





Ahbefive

11,657 posts

172 months

Thursday 20th October 2016
quotequote all
I'm not sure blimeycharlie knows how jobs work.

She is getting paid the £7.20 but She will be getting taxed on it until tax codes are sorted out. She will get a tax refund later on. Thats life.

2 sMoKiN bArReLs

30,254 posts

235 months

Thursday 20th October 2016
quotequote all
Ahbefive said:
I'm not sure blimeycharlie knows how jobs work.

She is getting paid the £7.20 but She will be getting taxed on it until tax codes are sorted out. She will get a tax refund later on. Thats life.
But his point is valid. Why was the tax deducted in the first place? If she signed up to it being her only job why did they not apply 1100L M1/W1?


Ahbefive

11,657 posts

172 months

Thursday 20th October 2016
quotequote all
Because with no p45 you pretty much always start on emergency tax.

Countdown

39,890 posts

196 months

Thursday 20th October 2016
quotequote all
2 sMoKiN bArReLs said:
But his point is valid. Why was the tax deducted in the first place? If she signed up to it being her only job why did they not apply 1100L M1/W1?
What he said ^^^.

Did she give her employer a P46? Did she tick Box A on the P46

2 sMoKiN bArReLs

30,254 posts

235 months

Thursday 20th October 2016
quotequote all
Countdown said:
2 sMoKiN bArReLs said:
But his point is valid. Why was the tax deducted in the first place? If she signed up to it being her only job why did they not apply 1100L M1/W1?
What he said ^^^.

Did she give her employer a P46? Did she tick Box A on the P46
P46 aren't used any more.

https://www.gov.uk/new-employee-tax-code/y/you-don...

2 sMoKiN bArReLs

30,254 posts

235 months

Thursday 20th October 2016
quotequote all
Ahbefive said:
Because with no p45 you pretty much always start on emergency tax.
Wrong on every level I'm afraid