Employer processed pay but no tax
Discussion
Evening,
Got paid last night by my employer however reviewing my payslip I haven’t paid any income tax. This is a company wide issue, not just me.
- NI has been paid
- Car allowance has NOT been paid
- Income tax has NOT been paid
My tax code has changed already to what appears to be an emergency tax code - 1233L.
My company has recognised the issue and we will receive a letter outlining the Net values but they have stated “it will be rectified next month”. How?
However, I’m concerned there may be an adverse effect - my mortgage is up for review in 3 months.
Thoughts on a postcard
Got paid last night by my employer however reviewing my payslip I haven’t paid any income tax. This is a company wide issue, not just me.
- NI has been paid
- Car allowance has NOT been paid
- Income tax has NOT been paid
My tax code has changed already to what appears to be an emergency tax code - 1233L.
My company has recognised the issue and we will receive a letter outlining the Net values but they have stated “it will be rectified next month”. How?
However, I’m concerned there may be an adverse effect - my mortgage is up for review in 3 months.
Thoughts on a postcard
Something similar happened to me. HM Revenue and Customs corrected my tax code and then took £3000 in tax I had missed for the previous month from my next payslip (plus the tax for that month..yay). I was going through a mortgage at the time, which complicated it a bit. I wasn’t given a chance to negotiate spreading out payments or anything, it was flat out taken. You can see your tax paid to date and projected payments online which will probably help you as this develops. For the mortgage, the underwriter just wanted assurance no debt HMRC remained. Good luck and don’t spent the extra money!
Joe5y said:
Evening,
Got paid last night by my employer however reviewing my payslip I haven’t paid any income tax. This is a company wide issue, not just me.
- NI has been paid
- Car allowance has NOT been paid
- Income tax has NOT been paid
My tax code has changed already to what appears to be an emergency tax code - 1233L.
My company has recognised the issue and we will receive a letter outlining the Net values but they have stated “it will be rectified next month”. How?
However, I’m concerned there may be an adverse effect - my mortgage is up for review in 3 months.
Thoughts on a postcard
Mortgage is calculated on gross pay, so won’t be affected.Got paid last night by my employer however reviewing my payslip I haven’t paid any income tax. This is a company wide issue, not just me.
- NI has been paid
- Car allowance has NOT been paid
- Income tax has NOT been paid
My tax code has changed already to what appears to be an emergency tax code - 1233L.
My company has recognised the issue and we will receive a letter outlining the Net values but they have stated “it will be rectified next month”. How?
However, I’m concerned there may be an adverse effect - my mortgage is up for review in 3 months.
Thoughts on a postcard
Joe5y said:
Evening,
Got paid last night by my employer however reviewing my payslip I haven’t paid any income tax. This is a company wide issue, not just me.
- NI has been paid
- Car allowance has NOT been paid
- Income tax has NOT been paid
My tax code has changed already to what appears to be an emergency tax code - 1233L.
My company has recognised the issue and we will receive a letter outlining the Net values but they have stated “it will be rectified next month”. How?
However, I’m concerned there may be an adverse effect - my mortgage is up for review in 3 months.
Thoughts on a postcard
When you say income tax has not been paid do you mean deducted from your gross pay before payment to you? That error does not mean the employer is not liable to pay the tax they should have deduced to HMRC on time.Got paid last night by my employer however reviewing my payslip I haven’t paid any income tax. This is a company wide issue, not just me.
- NI has been paid
- Car allowance has NOT been paid
- Income tax has NOT been paid
My tax code has changed already to what appears to be an emergency tax code - 1233L.
My company has recognised the issue and we will receive a letter outlining the Net values but they have stated “it will be rectified next month”. How?
However, I’m concerned there may be an adverse effect - my mortgage is up for review in 3 months.
Thoughts on a postcard
I would assume that the employer will simply deduct the overpayment from next moths net pay.
1233L is not an emergency tax code. It is a code that has been reduced to collect tax owed and/or taxable BIK.
Thank you for your replies.
To add some clarity, my employer has forgotten to tell HMRC that its employee's are now part of a new company (recent acquisition) resulting in a TUPE transfer. HMRC have no knowledge of me working for the new company but they are aware that I no longer work for the old.The result of this is that no one has had their tax paid - nothing deducted from salary and nothing paid to HMRC.
Employer has stated that it will be deducted from next months salary so in effect we will not pay tax this month but will next. Other issues such as car allowance will be processed separately.
My concern now is my tax code has changed and I am due a substantial bonus next month. Will this not further effect my tax code? Being that I am on a new tax code could I be paying more tax on owing to the inflated pay for the bonus?
In effect, I will not have a normal salary until December pay.
To add some clarity, my employer has forgotten to tell HMRC that its employee's are now part of a new company (recent acquisition) resulting in a TUPE transfer. HMRC have no knowledge of me working for the new company but they are aware that I no longer work for the old.The result of this is that no one has had their tax paid - nothing deducted from salary and nothing paid to HMRC.
Employer has stated that it will be deducted from next months salary so in effect we will not pay tax this month but will next. Other issues such as car allowance will be processed separately.
My concern now is my tax code has changed and I am due a substantial bonus next month. Will this not further effect my tax code? Being that I am on a new tax code could I be paying more tax on owing to the inflated pay for the bonus?
In effect, I will not have a normal salary until December pay.
1233L is only minimally different from the standard tax code 1257L. Effectively you are paying tax on an extra £240. This is month 7 so on £140 at your marginal tax rate (20% = £28, 40% = £56).
Since PAYE tax is cumulative the incorrect amount will automatically be refunded when your tax code is corrected. Nothing to worry about at all.
Since PAYE tax is cumulative the incorrect amount will automatically be refunded when your tax code is corrected. Nothing to worry about at all.
Joe5y said:
Thank you for your replies.
To add some clarity, my employer has forgotten to tell HMRC that its employee's are now part of a new company (recent acquisition) resulting in a TUPE transfer. HMRC have no knowledge of me working for the new company but they are aware that I no longer work for the old.The result of this is that no one has had their tax paid - nothing deducted from salary and nothing paid to HMRC.
Employer has stated that it will be deducted from next months salary so in effect we will not pay tax this month but will next. Other issues such as car allowance will be processed separately.
My concern now is my tax code has changed and I am due a substantial bonus next month. Will this not further effect my tax code? Being that I am on a new tax code could I be paying more tax on owing to the inflated pay for the bonus?
In effect, I will not have a normal salary until December pay.
I First of all don't worry. It shouldn't affect your mortgage. What i think has happened is.....To add some clarity, my employer has forgotten to tell HMRC that its employee's are now part of a new company (recent acquisition) resulting in a TUPE transfer. HMRC have no knowledge of me working for the new company but they are aware that I no longer work for the old.The result of this is that no one has had their tax paid - nothing deducted from salary and nothing paid to HMRC.
Employer has stated that it will be deducted from next months salary so in effect we will not pay tax this month but will next. Other issues such as car allowance will be processed separately.
My concern now is my tax code has changed and I am due a substantial bonus next month. Will this not further effect my tax code? Being that I am on a new tax code could I be paying more tax on owing to the inflated pay for the bonus?
In effect, I will not have a normal salary until December pay.
1. You've "left" one company's payroll and moved onto the new company's payroll.
2. The new company should have EITHER put you on BR or W1/M1 Tax code OR it should have used your correct tax code but also included your previous earnings for the current tax year. What they appear to have done is a bit of both ie used the correct tax code but not added in your cumulative earnings for 2021/22.
My guess is that if you look on your payslip it will show only this month's gross pay in the "YTD Taxable" column. So the payroll system thinks that you won't exceed your personal Allowance before 31st March and therefore has not deducted any tax (but HAS deducted NI).
It's either an incompetent Payroll manager or your company has outsourced payroll.
Countdown said:
I First of all don't worry. It shouldn't affect your mortgage. What i think has happened is.....
1. You've "left" one company's payroll and moved onto the new company's payroll.
2. The new company should have EITHER put you on BR or W1/M1 Tax code OR it should have used your correct tax code but also included your previous earnings for the current tax year. What they appear to have done is a bit of both ie used the correct tax code but not added in your cumulative earnings for 2021/22.
My guess is that if you look on your payslip it will show only this month's gross pay in the "YTD Taxable" column. So the payroll system thinks that you won't exceed your personal Allowance before 31st March and therefore has not deducted any tax (but HAS deducted NI).
It's either an incompetent Payroll manager or your company has outsourced payroll.
I was just going to post the same. It explains why NI but no income tax deduction.1. You've "left" one company's payroll and moved onto the new company's payroll.
2. The new company should have EITHER put you on BR or W1/M1 Tax code OR it should have used your correct tax code but also included your previous earnings for the current tax year. What they appear to have done is a bit of both ie used the correct tax code but not added in your cumulative earnings for 2021/22.
My guess is that if you look on your payslip it will show only this month's gross pay in the "YTD Taxable" column. So the payroll system thinks that you won't exceed your personal Allowance before 31st March and therefore has not deducted any tax (but HAS deducted NI).
It's either an incompetent Payroll manager or your company has outsourced payroll.
HMRC will know you are working for your current employer, it gets automatically reported to them under Real Time Information.
As Countdown states, it will sort it self out over the next couple of months. It is possible the new employer hasn't been provided with the P45 details from the old employer, so they have done the best they can to get you paid something.
Joe5y said:
Will HMRC not be even more confused next payday when my pay will be 6x higher than normal? Will this not further impact my tax code or will I be taxed higher on this payday because of the errors?
Your gross pay wont be higher. You'll just be paying two months' worth of tax. When your Payroll submit the FPS HMRC will look atCumulative earnings for the year
Cumulative tax paid for the year
The two will (hopefully) be in line with each other so there shouldn't be an issue. having said that they don't look at it on a month by month basis anyway; they will look at it after year end and then either send you a bill or a refund depending on if youve overpaid or underpaid
Countdown said:
Your gross pay wont be higher. You'll just be paying two months' worth of tax. When your Payroll submit the FPS HMRC will look at
Cumulative earnings for the year
Cumulative tax paid for the year
The two will (hopefully) be in line with each other so there shouldn't be an issue. having said that they don't look at it on a month by month basis anyway; they will look at it after year end and then either send you a bill or a refund depending on if youve overpaid or underpaid
Yep that's my experience at a precious employer. They managed to get it right so that it worked out in the end. Cumulative earnings for the year
Cumulative tax paid for the year
The two will (hopefully) be in line with each other so there shouldn't be an issue. having said that they don't look at it on a month by month basis anyway; they will look at it after year end and then either send you a bill or a refund depending on if youve overpaid or underpaid
Op, You are confusing your tax free allowance tax code with salary changes, they are not connected, at least not until you reach 100,000k pa when it starts to reduce. Changes in your salary up to that point make no difference to your allowance. Most people have the same £12,570 allowance which is a 1257L code, your allowance has been reduced to £12.330 so your tax code has now changed to 1233L to reflect, this. It will most likely be to collect extra tax due, could be a variety of reasons but normally it will be a small amount of tax underpaid, or a small amount of BIK (Benefits in kind), although it's such a small amount I would think it most likely to be for collecting back tax
Do you have any BIK, do you get a P11D at the end of the tax year showing any benefits you are given?
Do you have any BIK, do you get a P11D at the end of the tax year showing any benefits you are given?
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