AIBU to be upset my PAYE tax was so (11k) wrong?

[Janome9300]

I have just (very early and efficiently) done my tax return.

Although 100% of my income is from a single employer and I am fully PAYE I owe an additional 11k for 23/24. In addition they are demanding a 5k payment on account for next year so I need to come up with 17k by 31 Jan next year.

I have been through all my payslips and done the maths manually and they are correct about the additional owing. I need to put away 1.7k a month between now and the payment date.

I am so sad. I have had money owing before but it is normally a couple of thousand, this has been a real shock. Thank god I did the calculation so early so I have a hope of scraping it together. I don't understand why it has been so wrong at source. I haven't had a massive pay increase or anything.

You need to see how your code is made up. As that is an odd code to be on.

Set up a personal tax account and get access to your paye code

most common reason in this circumstance is earnings over £100k. Even if tax code is correct you have to do it.

op - In this case tax code sounds very wrong but hmrc should send updated tax code to employer so you shouldn’t need to prepay your 24-25 tax. You do need to call them though to agree so they don’t fine you for late payment

Anyone earning over £100k a year must complete a tax return, as you lose your tax free allowance.

This is bizarre as with RTI they should have worked out your correct tax code much earlier.

I suspect your payroll department have messed something up too.

Whilst it’s possible for tax to be wrong on PAYE of course, there are fewer variables and a decent payroll person should have worked out that you should not have a tax code like that on your salary.

I think the losing of the personal allowance when you earn over £100k mark is probably a factor, at £140k your taxable allowance is much depleted!

That’s hilarious- do you think payroll are sitting there running a random number generator to decide tax codes or something?

To add to the other points about employers being given the tax code by HMRC, if for some reason you input the wrong one once you submit the RTI you get constant notifications from HMRC until you correct it.

You can use one of the free tax calculators online plus the hmrc app now allows you to input your earnings and it recalculates your tax and sends you out a new code within a few days.
i would suggest doing this quarterly in future to avoid this happening again
we have been caught out with this before!
hope that’s helpful - don’t rely on hmrc to get it right!

also don’t waste your time ringing hmrc - just use the app
they gave me completely incorrect advice and got my tax code wrong.

YANBU - i work in payroll and if a tax code came through like yours id be flagging it to the employee and asking them to check with HMRC its correct. I think payroll should sense check crazy looking tax codes and flag them as no one wants a massive variance at the end of the tax year. Usually a corrected tax code comes though within a day of the employee speaking to HMRC or correcting their expected income on their personal online tax account.

I thought they were on summer break till September?

I had to reclaim Stamp Duty recently and they asked me to calculate what I was owed. So....what are they actually doing? I'm baffled.

@NameChangeAK are humans looking at payroll much, I thought it was very much automated.

not claiming to know, just had a lot of tax puzzles myself recently.

I'm currently being pursued for £171k.

All from ONE WEEK of work in 2016! No, l do not earn massively and I do not owe that money. The letters get sent automatically.

I find if you can actually get through to HMRC they're really helpful. Within the limits of what they can do/timelines etc. My case (which is utterly ridiculous) has been dragging on for years now but the HMRC people I've spoken to have always been lovely and apologetic so fingers crossed 😬

My son first full time job in his industry had no idea his code was wrong. After 18 months it was noticed, he received a big rebate. Mistakes are made.

While this is absolute rubbish (payroll are not allowed to ‘choose’ the tax code), I do think your payroll department should have flagged this tax code that came though from HMRC was unusual.

It depends on how big the organisation is, if it’s thousands of people this may not be sustainable. There is an element of personal responsibility as well.

@NameChangeAK are humans looking at payroll much, I thought it was very much automated.

well in our payroll the tax codes feed straight from HMRC into the payroll software, but a human does click a button to update them. They can skim down the list and it’s usually easy to spot any unusual tax codes coming through, the ‘t’ ones should be given a second glance at the very least!

No that’s completely wrong they have to operate the paye code issued by hmrc and it is the taxpayers responsibility to check the code is correct. It is only payrolls fault if they operate a different code to the one issued by hmrc.

I’d argue that with thousands of people, a larger payroll team should have the capacity to do this - the updates from HMRC come though daily so would be daily task that wouldn’t take long - I’d guess an hour or so max to check the daily code updates even for a company with thousand of staff. I reckon It’s a worthwhile investment in terms of employee wellbeing to make sure they are being paid and taxed correctly, and not being over or under taxed.

Sorry but thst rubbish, paye codes can include all sorts of other things that are nothing to do with the employment as a way of collecting tax or giving tax relief. It is really not any business of the payroll department they just operate the code. Payroll only get notified of the actual code the employee gets the breakdown and it is their responsibility alone to check

But the most you can ever do is say to an employee “you tax code looks abit odd you might want to check it” as you have no idea what is in a code and it’s not really your business, employees may think you are snooping

At my company -100 people, I regularly would send out emails of "check your tax code" to all staff -tell them where to query it if it's non standard.

That's not difficult to do for any company,

Yes That’s exactly what you can say - 99% of the time it’s very incorrect and the employee will be grateful you’ve flagged it so they can get it fixed.

If I got a tax code indicating someone has a £23k personal allowance I would definitely flag that to the employee.

It’s not ‘rubbish’ - a person earning £140k would never have a tax code like that and any payroll person worth their salt would know that.

Some of the bollocks that comes through from HMRC is ridiculous and I flag any changes to employees so they can chase it up.

This exactly

Payments on account are not optional, this is not the right information. You can reduce them to zero if you don’t think they are right but if they are correct they will be put back on your statement and any interest and penalties backdated to the original due date