New job - tax code change

[Flamingolingo]

Wonder if anyone can help me please

I’ve just moved jobs - a straight swap from one calendar month to the next, P45 given etc. Both salaries pro rated and basic tax rate. I’ve just had a letter from HMRC that my personal allowance has been decreased by £2.5k because they reckon I’ve underpaid tax. I’m pretty sure that is not the case as both jobs were PAYE. I did have a payment in my last month’s salary that was for annual leave, so I was about 60% higher than usual, but PAYE and tax paid.

Any ideas why this has happened? And if I can get it remedied?

Note: I’ve been given a BR X tax code so it looks like they just haven’t bothered with the P45? Big reputable company (household name) too. So very disappointing.

X is emergency tax. It’s while they work out what’s going on. PAYE is now automatically updated through the year so you may have underpaid or they may be working it all out. There’s some really helpful advice on the government website about tax calculations

Hmm - my calculations say that I’d used £6255 of my personal tax allowance at the end of September which sounds about right, so the current setup is definitely wrong. Do I need to do anything or will it sort itself out?

It can take a few weeks to get your actual tax code, BR is basic rate and is often used for second jobs so the HMRC may think you have been working two jobs.

You can log in to your account and check what records they have for you. They also have a live chat and can update your code.

As tax is cumulative I expect the system thinks that your extra you received for holiday is going to continue from now on and would put you in a higher rate tax category.

It’s also very rare for a P45 from a previous job to be able to be processed in time for payroll in a new job, especially if you are paid in arrears. It should sort itself out by next payroll.

@Comefromaway yes I did wonder that.

Does anyone know whether there is any point in me trying to contact HMRC myself? I have all the paperwork here

What’s your earnings to date on your P45?

Hopefully photo will attach.

I know someone who works in the payroll department of a largeish business and she's been really stressed with all the stuff that's had to be done since March and no doubt some things haven't been done when maybe they should. Not ideal but probably understandable imo

Everyone here is just guessing what might have happened, I'd start with your new payroll team and ask them

Comefromaway has it - your extra pay has caused HMRCs system to adjust your regular tax code. It's quite commonplace where employees get an extra lump sum payment in a month - either bonus, share based payment, payment of holiday pay. If you ring or message with them you should be able to get it adjusted back more quickly but if you leave it, it will get resolved after tax year end by HMRC.

To poster above who says everyone is guessing what has happened, there are people on here who know what they are talking about. It's nothing to do with payroll, they can't sort this out - they will just follow hmrc coding notices as they are received and before that put on a standard emergency tax code. Because, that is the rule.

Thanks @Chapellass - it would be good to fix this before the end of the financial year.