Tax over payment - Employer mistake.
Discussion
Wonder if anyone can advise?
I finished self employment at the end of the 2015/16 tax year and started PAYE employment in April (in tax year 2016/17).
My first payslip showed a huge tax over payment (approx 50% of earnings) which I put down to been the first month and the tax code was wrong (although payslip showed 1059L). I did question with HR but they also put it down to first month.
I created an online tax account with HMRC and saw that they had me down as earning my PAYE wage plus estimated earnings from self employment (total of circa £105,000). Using online PAYE calculators, if i was PAYE at £105,000 then the tax I paid would be right, so assumed that this was the mistake. I quickly contacted HMRC via phone and online forms and projected income is now correct with an estimated tax bill for this year been £13,000 - which lines up with online PAYE calculators.
Roll on this month and my 2nd payslip - I have been taxed 50% again. I have overpaid approx £2,500 so far in tax.
Having spoken to HMRC this evening, they can see I am paying too much tax but confirm that my tax code is correct (now at 1100L which correlates with this payslip) and the error must be with the employer - they have the right tax code but the system is processing it wrong.
I also note that the earnings to date are approx £20,000 - which is my pay from Month 1 & 2 added to £12,000 - the £12,000 coming from my P45 from self employment but from tax year ending 2016. It appears that they have taken this £12,000 earnings into account for THIS financial year.
I cant really afford to wait till end of June for next pay, need this sorted ASAP, is there any legal obligation for the employer to a/ fix this quickly and b/ pay me monies due by a BACS payment promptly.
Thanks in advance!
I finished self employment at the end of the 2015/16 tax year and started PAYE employment in April (in tax year 2016/17).
My first payslip showed a huge tax over payment (approx 50% of earnings) which I put down to been the first month and the tax code was wrong (although payslip showed 1059L). I did question with HR but they also put it down to first month.
I created an online tax account with HMRC and saw that they had me down as earning my PAYE wage plus estimated earnings from self employment (total of circa £105,000). Using online PAYE calculators, if i was PAYE at £105,000 then the tax I paid would be right, so assumed that this was the mistake. I quickly contacted HMRC via phone and online forms and projected income is now correct with an estimated tax bill for this year been £13,000 - which lines up with online PAYE calculators.
Roll on this month and my 2nd payslip - I have been taxed 50% again. I have overpaid approx £2,500 so far in tax.
Having spoken to HMRC this evening, they can see I am paying too much tax but confirm that my tax code is correct (now at 1100L which correlates with this payslip) and the error must be with the employer - they have the right tax code but the system is processing it wrong.
I also note that the earnings to date are approx £20,000 - which is my pay from Month 1 & 2 added to £12,000 - the £12,000 coming from my P45 from self employment but from tax year ending 2016. It appears that they have taken this £12,000 earnings into account for THIS financial year.
I cant really afford to wait till end of June for next pay, need this sorted ASAP, is there any legal obligation for the employer to a/ fix this quickly and b/ pay me monies due by a BACS payment promptly.
Thanks in advance!
2 sMoKiN bArReLs said:
P45 from 2016 (assuming 2015/16) should not come into play in current tax year's payslip? (2016/17)
I think that I realise that now - having not been PAYE for 8 years I just automatically got a P45 from my self employment termination and passed it on to the PAYE employer - IF they have taken that into account (for the WRONG tax year) - would that be affecting the tax im paying now?OK, yes - read self employment as ltd co/director/only employee - but for the purposes of the issue, self employment was close enough as that made no difference to the problem.
As it happens the issue has been resolved and against my fears, the overpayments of tax will be back with me at the end of this month.
It was that the earnings from last year had been taken into account for this FY by mistake.
As it happens the issue has been resolved and against my fears, the overpayments of tax will be back with me at the end of this month.
It was that the earnings from last year had been taken into account for this FY by mistake.
Gassing Station | Jobs & Employment Matters | Top of Page | What's New | My Stuff