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Can anyone explain this tax underpayment to me?

(6 Posts)
GrimmauldPlace Thu 06-Oct-16 11:12:05

DH has received a letter from HMRC to say he underpaid tax last year. The explanation given was that he received the full tax free allowance from more than one employer in the same tax year.

Last May he left his previous job which was hourly paid and 2 weeks later he started his new job which is salaried. That month he received his last pay from previous job and also his salary for his new job but only half a months pay as that's all he'd worked.

My understanding was that as he never worked both jobs at the same time, he was entitled to the full tax allowance on both sets of pay as they were for different weeks.

I presume I'm wrong but I don't quite understand it. Surely that would mean that anybody switching jobs part way through the tax year would end up paying extra tax for the rest of the year?

The letter says his personal allowance was £10600.00 but I'm sure that from September last year it was £11660.00 as I transferred over some of my allowance to him. Could this have been an issue?

Thanks if you got this far!

sm40 Thu 06-Oct-16 11:27:54

How much is the underpayment. It might be for the swapover month both employers used a months worth of personal allowance.
Is there a calculator online you can pop in both earnings and paye and see what is says. Is there a calculation sheet from Hercules you can compare with.

If there is an underpayment and if it's small they should hopefully code it in over the next tax year.

Think of it as an interest free loan if you have underpaid!
Good luck

GrimmauldPlace Thu 06-Oct-16 11:41:26

It's not a lot at all, £130 so that's why my immediate thought was it must be the new job situation. I've just had a look at DH's payslips and they've taken extra tax the past 2 pay days so it'll be paid off in no time really. I just couldn't understand how he'd managed to under pay when there was no actual cross over in the jobs.

I do want to look in to this marriage allowance though as my understanding was that it would be backdated to April 2015 but they seem to be basing this calculation on the 10600 allowance when it should have been 11600.

It's principal really grin

BigginsforPope Thu 06-Oct-16 11:59:56

OP did you know that HMRC have a website where you can log in to view your own tax codes and the details about your tax free allowances. It is really easy to use and you will be able to see where the overlap is.


Badbadbunny Thu 06-Oct-16 12:14:02

* I just couldn't understand how he'd managed to under pay when there was no actual cross over in the jobs*

But there WAS a crossover in pay periods. He'll have been given a full months' tax-free allowance in the new job, even though he only worked there for part month - a monthly payroll works in full months only. Just because he was only there for 1/2/3 weeks of the month doesn't mean he'd only get 1/2/3 weeks worth of allowance.

GrimmauldPlace Thu 06-Oct-16 12:32:13

Ah Bunny, now that I can understand! His previous job was paid fortnightly but I presume it works in much the same way?

That's interesting Biggins, will get him to set that up later. Thank you!

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