Employers Tax Code mistakes etc

[surveyor]

I have over the course of my career seen my employers make mistakes not reporting changes to HMRC or not implementing tax code changes. One of the fun ones was when I discovered that they still had me down with a fuel card, so expecting a refund only to discover that the firm had not implemented a code change so I ended up owing them money.

I've narrowly missed a situation where my employers had missed the increased pension contributions, and some of my colleagues are now picking up that tab in 3 months instead of 12. A mate has just been told that his employer had forgotten to declare his company car, and have recovered the entire underpaid tax in one month, with no notice.

Nearly all of these are employers mistakes, so is it entirely normal that employees pick up the tab, is it legislation, or is it actually down to negotiation?

[Countdown]

surveyor said:

Nearly all of these are employers mistakes, so is it entirely normal that employees pick up the tab, is it legislation, or is it actually down to negotiation?

You can ask HMRC to recover the underpayment over 12 months by adjusting your subsequent year’s tax code but, other than that, there’s no negotiation. The employee is only picking up the tab for what he/she would have paid in the first place. They aren’t any worse off financially

[b0rk]

Employers mistakes are positively straightforward vs the situations when HMRC get it wrong. I’m looking at you X codes which don’t get refunded until the following year..

[67Dino]

I experienced this some years back, and appreciate how annoying it is to find you suddenly owe an additional sum.

However, what I learnt when questioning it is that the company makes no promises to get the codes right, and has no liability at all if you fail to pay your tax correctly. It really is all down to you as the employee to check the codes, check how much you’re paying is right, and settle up any emerging discrepancies at the end of the year.

[ChocolateFrog]

Did some work over the summer and my employer/accountant assumed it was a second income, it wasn't. Luckily that got sorted pretty quickly.

[Blown2CV]

it's up to you to check your tax determination is correct. You can discuss it directly with the HMRC to determine how your current tax code is worked out, and discuss any issues with your employer accordingly.

[surveyor]

Blown2CV said:

it's up to you to check your tax determination is correct. You can discuss it directly with the HMRC to determine how your current tax code is worked out, and discuss any issues with your employer accordingly.

I know that’s the party line.

But it’s the employer who tells the HMRC, and then implements the code... so if they cock that up, I don’t really understand why they are allowed to just say sorry we’ve dropped you in it...

[Blown2CV]

surveyor said:

Blown2CV said:

it's up to you to check your tax determination is correct. You can discuss it directly with the HMRC to determine how your current tax code is worked out, and discuss any issues with your employer accordingly.

I know that’s the party line.

But it’s the employer who tells the HMRC, and then implements the code... so if they cock that up, I don’t really understand why they are allowed to just say sorry we’ve dropped you in it...

depends what it is that they are telling HMRC about. Some things go on the P11d, some things go in periodic attestations, and some things are your responsibility to confirm. All things, however, are your responsibility to check for correctness. Things like estimated income, business expenses, professional subscriptions, taxable benefits etc are all for you to confirm, esp if they change mid-year. One thing that has really pissed me off in previous years is the tax associated with performance related bonus, because it is irregular income. The income estimations that HMRC does is based off of regular income, and the bonus comes at the end of the year. So unless you tell them at the start of the year the total anticipated income including the bonus, they will whack you for massively underpaid tax early in the next tax year. If you're on self assessment then it could be far later in the following tax year - a nasty surprise if you've found things to spend it on in the meantime. Live and learn. However, employer will not give HMRC this info, it's down to you to make it easier for yourself. That's just an example.