I found out last night (unexpected letter from the inland revenue) that the company I work for have been getting their PAYE calculations wrong. Basically that means that I haven't paid as much tax as I should have done, and now the taxmen want the money they should have had earlier through payroll deductions. Now that's fine in some ways - turns out I've effectively had an interest free loan, so although it's an unexpected bill I can't really argue with it too much.
However.... what they want to do is get this back by adjusting my tax code for next year (so it'll be massively negative). Having worked through the info and the bumph they sent, against my income it doesn't look so good.
Basically what I get paid is just under the point where the 40% tax bracket cuts in - assuming the tax has been worked out properly that is So all the tax I haven't been paying would have been at the basic 22% rate. But as a result of them deciding to treat the untaxed "income" (actually childcare vouchers) as if it had been earned next year I will effectively end up paying tax at 40% on it. So I end up getting "fined" 18% (which adds up to a lot when we're talking about £12000) because of a mistake my employers payroll department have made.
Please, does anyone know if I can appeal against this? Can I insist on doing a tax return for this year (and last year, as this has only just come to light but goes back 2 years) and just pay the extra for those two years so that I get a normal tax code for next year? Or would that mean I get "fined" and charged interest for not submitting a self-assessment for 2002/3 which I hadn't been asked for and wouldn't have been necessary but for a mistake which wasn't mine?
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HELP? Any tax experts out there? (Long, sorry)
1 reply
GillW · 27/01/2004 17:02
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