PAYE underpayment?

[Bushi]

Hi anyone good on PAYE?

Last tax year I had my main employment and "standard" 1257L tax code, that should have taken the correct tax. It has worked fine every other year.

Same tax year I had one extra "job" that paid one event of £180 that they took £36 tax from.

I have now received a letter that I underpaid that tax year to the value of £707 that they will take from my salary next year.

So it seems my £180 days work has cost me £707 or is there something else here?

[fat80b]

Could be several things.

If you have your P60 (which contains the salary and tax paid etc.) and your P11D which contains any taxable benefits eg healthcare etc then you should be able to work it all out.

I tend to find the MSE salary calculator does a pretty good job if it’s straightforward

Once you have the numbers, you should be able to figure out if they have made the right assumptions going forwards as well.

[jrb43]

Do HMRC understand when that second job "started" and "stopped"? I'd be worried that they think you have an ongoing second employment.

you may need to do a self assessment to explain things to them. Which will probably commit you to self assessment for the foreseeable. Sorry. Honesty does not pay where HMRC is involved

[Bushi]

jrb43 said:

Do HMRC understand when that second job "started" and "stopped"? I'd be worried that they think you have an ongoing second employment.

you may need to do a self assessment to explain things to them. Which will probably commit you to self assessment for the foreseeable. Sorry. Honesty does not pay where HMRC is involved

Ah, could be this then as I am still registered with this agency.

Still cant see why £180 worth of work end up costing more than that in tax...tried calling HMRC but estimated an hours wait...

[jrb43]

Ah. You may be paying higher rate tax on your income (the one you actually have) because HMRC believe you have two income streams. I “enjoyed” this one when a previous employer was slow to issue a P45.

[The Ferret]

I'd say its one of two things.

Either you've got some benefits in kind which have recently been reported (it's that time of year for it) such as private medical insurance.

Or, you've exceeded £100k in total earnings, and lost part of your personal allowance as a result.

I very much doubt its got anything to do with a late P45 or being left on someones books, as HMRC should only be taking the figures from the company monthly submissions, and if your not on there then there is nothing to see.

[Countdown]

Bushi said:

Hi anyone good on PAYE?

Last tax year I had my main employment and "standard" 1257L tax code, that should have taken the correct tax. It has worked fine every other year.

Same tax year I had one extra "job" that paid one event of £180 that they took £36 tax from.

I have now received a letter that I underpaid that tax year to the value of £707 that they will take from my salary next year.

So it seems my £180 days work has cost me £707 or is there something else here?

If you pay 40% tax then you will owe an additional £36.

On the letter they sent you does it not give a breakdown of taxable earnings, tax deducted, and tax owed? You should be able to reconcile the HMRC taxable earnings figure to the figures on your P60, or the last payslip for the one-off event,

Do you have any Benefits in Kind such as private medical, company car etc. ?

[dudleybloke]

I had this about 15 years ago but they wanted £10k off me, a few calls later and they were sending me a rebate.

[Bushi]

Countdown said:

Bushi said:

Hi anyone good on PAYE?

Last tax year I had my main employment and "standard" 1257L tax code, that should have taken the correct tax. It has worked fine every other year.

Same tax year I had one extra "job" that paid one event of £180 that they took £36 tax from.

I have now received a letter that I underpaid that tax year to the value of £707 that they will take from my salary next year.

So it seems my £180 days work has cost me £707 or is there something else here?

If you pay 40% tax then you will owe an additional £36.

On the letter they sent you does it not give a breakdown of taxable earnings, tax deducted, and tax owed? You should be able to reconcile the HMRC taxable earnings figure to the figures on your P60, or the last payslip for the one-off event,

Do you have any Benefits in Kind such as private medical, company car etc. ?

No just salary.
It is into 40%
They do send the breakdown.
But it does not state why there is an underpayment, just raw data. I know it should be easy, but dosn't help me.

I can't wait on the phone just to be knocked back so have sent them a letter.

Hardly the end of the world, but just seems wrong.
We shall see.

At least it's not 10k !

[Countdown]

Are you able to match the raw data back to your P60/payslips?

Alternatively do you have a Govt. Gateway ID so you could log in and check their calcs?

Did you have any significant payments go through in March?

[Car bon]

As above - I'd start with Government Gateway and PAYE pages. Make sure the current year is correct and what you expect and then try to unravel last year.

[xx99xx]

I was recently notified that I have underpaid tax by £54 so they have adjusted my tax code to collect it.

I am PAYE and nothing in my financial situation has changed for the last 5 years. So I don't know how I've managed to underpay? Website doesn't explain why.

Although 2 years ago they sent me a cheque for £300 as I'd paid too much tax.

[Somebody]

xx99xx said:

I was recently notified that I have underpaid tax by £54 so they have adjusted my tax code to collect it.

I am PAYE and nothing in my financial situation has changed for the last 5 years. So I don't know how I've managed to underpay? Website doesn't explain why.

Although 2 years ago they sent me a cheque for £300 as I'd paid too much tax.

Tax on interest received above your savings allowance, or dividends over divi allowance, perhaps?

[Kirkmoly]

OP, just file a tax return. It takes but a few minutes, has no negative consequences and guarantees that you will have paid only the correct and proper amount of tax. Simples.

[Countdown]

Kirkmoly said:

OP, just file a tax return. It takes but a few minutes, has no negative consequences and guarantees that you will have paid only the correct and proper amount of tax. Simples.

IMHO a tax return doesn't take a few minutes. It takes more than a few minutes to pull together all the information you need. However submitting a tax return on it's won't fix things if HMRC are getting some other information from somewhere else. OP needs to find out what the error is and correct it.

[SmoothCriminal]

Do you get paid weekly fortnightly or 4 weekly?.

There's some bullst thing where every so often you end up using too much allowance and they claw it back the next year.

Edited by SmoothCriminal on Friday 28th July 09:36

[The Leaper]

Countdown said:

IMHO a tax return doesn't take a few minutes. It takes more than a few minutes to pull together all the information you need.

I disagree.

When doing my own SA, I need to complete:

• Employment section: BIK plus professional subscriptions
• Income: untaxed UK interest from multiple sources, untaxed UK dividends, untaxed State pension, gross private pension plus tax deducted
• Foreign section: gross dividends from foreign companies, withholding tax

So, reasonably comprehensive but nowhere near completion of every section (who does?) of the large SA form.

I completed and filed with HMRC my SA for 2022/23 yesterday. That took me maybe 15 minutes. How? Because I maintain a spreadsheet with all the relevant information and update it as that information comes to me. Then its a matter of inserting the totals and adding the information to the SA. Simples.

IMHO, if you cannot be arsed with maintaining and updating all the relevant information, you cannot moan about the time taken to complete your SA

R.

[Countdown]

The Leaper said:

Countdown said:

IMHO a tax return doesn't take a few minutes. It takes more than a few minutes to pull together all the information you need.

I disagree.

When doing my own SA, I need to complete:

• Employment section: BIK plus professional subscriptions
• Income: untaxed UK interest from multiple sources, untaxed UK dividends, untaxed State pension, gross private pension plus tax deducted
• Foreign section: gross dividends from foreign companies, withholding tax

So, reasonably comprehensive but nowhere near completion of every section (who does?) of the large SA form.

I completed and filed with HMRC my SA for 2022/23 yesterday. That took me maybe 15 minutes. How? Because I maintain a spreadsheet with all the relevant information and update it as that information comes to me. Then its a matter of inserting the totals and adding the information to the SA. Simples.

IMHO, if you cannot be arsed with maintaining and updating all the relevant information, you cannot moan about the time taken to complete your SA

R.

I don't think you actually ARE disagreeing

I agree that if you keep all the financial information up to date on a spreadsheet or on one of the many personal finance packages then you can complete a SA in 15 minutes. However maintaining the finance information in the first place is also an investment in time which the OP will never have done. So telling HIM it will only take a few minutes is wrong.

I'm an accountant and I do about 15 SA returns each year for friends and family. Some of them literally turn up with carrier bags of receipts and bank statements. On average it takes me about an hour to do each one.

[xx99xx]

Somebody said:

Tax on interest received above your savings allowance, or dividends over divi allowance, perhaps?

No savings or dividends

[Bushi]

SmoothCriminal said:

Do you get paid weekly fortnightly or 4 weekly?.

There's some bullst thing where every so often you end up using too much allowance and they claw it back the next year.

Edited by SmoothCriminal on Friday 28th July 09:36

OK, seems you might be right.

I am paid four weekly, we were paid 14 times that financial year rather than the more normal 13, story seems to be this happens every 20 years or so and throws a spanner in the works.

I sent a letter to HMRC but it looks like that's the answer.

HR must have seen this coming....