Umbrella company/HMRC underpayment

[QueenieMac]

Hi, hopefully posting in the right place. My DH is self employed and has just received a letter from HMRC saying that there has been a considerable underpayment for 21/22. This is due to the umbrella company ticking the wrong box on a HMRC Starter Checklist box which gave HMRC the wrong tax code. We have no record of signing this document or box ticking and my DH doesn't remember seeing it.

HMRC have said that our issue is with the umbrella company not HMRC but that we definitely owe HMRC this amount.

We do not have this kind of money. Not heard back from umbrella co yet but would be very surprised if they accept any responsibility.

Where do we stand legally when this is not our error? Any advice would be appreciated. Going out of our minds with worry.

As I understand it, the umbrella company take a cut for doing the payroll so up to them to sort it. However, if you ve underpayed tax then you do owe it, whether or not its your fault a box was or wasn't ticked

we don’t use an Umbrella co we use our own Ltd co direct.
However, I am pretty sure that your H is ultimately responsible for his tax even if a mistake has been made. He may not have to pay fines or penalties but if he owes tax he will have to pay it.
HMRC are actually a lot more reasonable and nice to deal with that people think and may let him pay in installments

5 yrs ago, I was with an umbrella company. I got a letter from HMRC saying I owed tax. I recall it wasn't very detailed or clear how they worked this out- and it was 5yrs worth of tax they were chasing- not just 1!

Luckily, I had kept scrupulous records of receipts, pay slips and expenses. Long story short- HMRC thought my expenses were extra income. Not simply being re-reimbursed for expenses such as travel I had to pay! In the end, they found that they owed ME tax!!! Not a massive amount, less than £100 I think.

Could this be similar for your DH and its actually expense money he was paid that they think he owes tax on? Did they say it was a wrong tick box? Do you have an accountant?