Tax under payment

[norfolknights]

Hi
Sorry if this has been done before but any advice?

2 days ago I received a letter from HMRC telling me I underpaid tax by £840 in 2008/2009. Today I've received another letter saying that I under paid tax of £850 in 2009/2010!!

I have only ever worked as an employee under PAYE and I was in the same company throughout 2008-2010. I have a really simple tax code as I didn't get any additional benefits other than my basic salary.

The info sheet that came with the HMRC letters does say that my employer may be liable for this under payment if they didn't deduct enough tax which presumably they didn't.

Does it sound like my (ex) employer is liable or is it my fault for not checking the tax calculations?

Am on hold to HMRC but have to hang up soon to collect my youngest from pre school.

Thanks for any advice!

I have experience of this but the situation was different... ie. HMRC supplied the wrong tax code leading to an underpayment. In that case, the onus was technically on the taxpayer (my colleague) to have paid the right amount. However, our accountant successfully argued that my colleague had no reasonable way of realising that the tax code was wrong.

In your case, check your payslips. If your former employer applied the wrong tax code or calculated your tax payment incorrectly then you'd have a good case against them. If HMRC gave you the wrong code your claim is against HMRC. But don't be surprised if you have to pay some tax back. It took three years to clear up my colleague's problem and she had a professional accountant on her side.

It depends why the error arose.

If your ex-employer applied the wrong tax code, or provided incorrect information to HMRC so that the wrong tax code was issued or calculated the tax deductions incorrectly, it is your ex-employer's liability - HMRC must not ask you for this money.

If the error is because HMRC have not used information you sent them correctly, you should not normally have to pay for 2008/9. If you have sent them correct information more than once, you may not have to pay for 2009/10 either. The relevant Extra Statutory Concession is ESC A19. There have been a number of threads on more money-specific forums about this - search moneysavingexpert.com for A19.

you need to check figures carefully. I few years back I was told I had underpaid by £600, but when queried it after figures did not add up, I had actually overpaid by £1200 and got a refund

dh has had similar. When he finally got through to HMRC they claimed to have sent 2 letters in Jan/Feb, neither of which he had received . Then he got 2 copies in 2 days ! Do double check the figures as his statement for 2009/10 included the amount underpaid in 2008/9 carried over. If the total is under £2000 you can ask for it to be deducted via paye. Cannot believe that in this day and age you still have to pay by cheque in the post!

What tax code does it say on your P60?