Active discussions

Meet the Other Phone. A phone that grows with your child.

Meet the Other Phone.
A phone that grows with your child.

Buy now

Please or to access all these features

Talk
Money matters

Find financial and money-saving discussions including debt and pension chat on our Money forum. If you're looking for ways to make your money to go further, sign up to our Moneysaver emails here.

Original poster

Underpayment of tax

15 replies

fumanchu · 18/07/2012 17:48

Hi can anyone explain why DH has tax bill of nearly £3k following completion of self-assessment form? is PAYE, only extra is medical cover, no bonus, no addtl income of any kind. Is it because the payroll company don't keep up to date with changes in allowances etc? any advice/comments welcome!

OP posts:
LIZS · 18/07/2012 17:55

He needs to ring the Tax Office. dh has twice had to pay over £2.5k extra because his PAYE fails to take into account a reduction in his personal allowance of £1 for every £2 earned above a certain amount. Could he have gone over a tax band with interest from an account for example or with benefits in kind?

spammertime · 18/07/2012 17:59

What is his annual gross salary?

What was his tax code?

Why was he asked to file a tax return? And is this for year ended 5 April 2012 (sounds like a silly question, but just checking)

ChablisLover · 18/07/2012 18:01

Could be that he has had the wrong tax code for paye purposes. Eg he's had a Br code, or a code with incorrect deductions in it and he's never noticed

Would see this a lot.

MrAnchovy · 18/07/2012 18:18

Most likely is he is on the wrong tax code; this could be due to a number of factors, probably the least likely of which is a payroll company not operating the correct procedures.

Many accountants will check over the figures in a free initial consultation.

lisaro · 18/07/2012 18:24

It could be any one of a number of things. He'll have to ask HMRC. Anything is just supposition.

Original poster
fumanchu · 18/07/2012 19:11

He is in the higher rate band, but has been for a few years. This is for year ending April 2011. He wasn't asked to do a return until Feb/March this year. This is probably dim of me but is it the employee's responsibility to pass on changes to tax code advised by HMRC to the payroll company? I am planning to get someone to look over it, as I'm worried this situation will recur for the year ended 2012.

OP posts:
LIZS · 18/07/2012 19:21

More than likely it will recur for 2011-12 if he's had no prior notice of coding adjustment. I'd suggest that there may be interest or another souce of income or benefit in kind which needs to be taxed at higher rate rather than the standard. Did the online return not throw this up ?

spammertime · 18/07/2012 19:31

Did you manage to find out his tax code?

thinkfast · 18/07/2012 19:34

If he's on paye it's the employers responsibility to make sufficient deductions

lisaro · 18/07/2012 20:00

HMRC send a coding notice to the employer at the same time as to the employee. It's fair to expect the employee to check the tax code being used by the employer is correct on their pay slip.

ChablisLover · 18/07/2012 20:15

Would get someone to check it out.

Hmrc pass coding notices to employers but if employee find something wrong they will have to contact hmrc to change it and get new code issued.

I have in recent months seen tax codes that are widely wrong and the employee has done nothing until I've done the tax return and pointed it out.

Ime I have discovered that most people think hmrc are always right but it really is not the case. Hence the hoo has with all these assessments issued and people being asked for money for Years ago.

You say he was asked to complete a return - is he a company director? Or has he some other source of untaxed income?

ChablisLover · 18/07/2012 20:18

It's not the employers responsibility to make the correct deductions.

They make deductions as per the coding notice but if it's wrong then the deductions will be wrong.

It's the employees responsibility to ensure coding notice is correct as it can include items such as untaxed interest which employers have no control over

MrAnchovy · 18/07/2012 21:59

Is he sure he filled in the return correctly? Does he make pension contributions? If so, does he know which of the three potential ways they should be shown on the tax return (each of which results in a different tax liability) is correct? Medical cover - is this a salary sacrifice scheme or is it shown on a P11D? Is there anything else on the P11D that you haven't taken into account, or was not taken into account in the tax code? He should have all the information for the 2011/12 return now, what position does this show?

There are many other questions that may be relevant; an accountant needs to see the P60, P11D and tax return to see what is going on - here we are just throwing straws into the wind.

ChablisLover · 18/07/2012 23:01

Second mrsanchovy advice

Go to a local accountant with all documents and get it checked out.

The online tax return can be hard to follow - I'm trying to do my parents at the mo and finding it hard and I do it for a living!

Original poster
fumanchu · 19/07/2012 16:02

Thanks everyone for your comments. I will get someone to check this over. His P11D only has the medical cover on it, he has no income or interest of any kind apart from his salary. Re the pension - the company pay into a private pension. FWIW I know another couple of people who have also been told they owe £KK. I assumed he was asked to do a return as the govt think people on the higher rate may have sources of untaxed income and they want to make sure they get as much as possible, which is fair enough unless of course you're able to take advantage of tax dodging schemes (which is another issue entirely).

OP posts:
New posts on this thread. Refresh page