Underpaid tax, how did this happen?

[SalagadooLamagicaboo]

I have just received a letter stating that for the year 2011/2012 I underpaid tax for about £400.

I cannot see how this happened, as during this tax year, I was working fulltime between April and August 2011 and then I went onto maternity leave where I was receiving Maternity allowance.

Is Maternity allowance about £130 per week is taxable? I cannot remember if I was paying tax on it but I must have as my employer did write to me at some point to say that I overpaid my tax and returned about £40something to me.

So my question is, could HM revenue have made a mistake? and how to I go about making sure that their calculation is right?

Employers calculate PAYE and NICS not HMRC so it is likely they made a mistake somewhere. Can you ask for copies of your payslips. If you don't pay pension etc, you can deduct the personal allowance, then work out how much tax and NICS you should have paid. You can make an appointment to go to a HMRC enquiry centre and they will work it out for you.

I should have thought it's more likely you overpaid tax, unless your tax code was badly wrong when you were working. Yes, SMP is taxable. It's easy to check their calculations. Get out your payslips (or P60) find out how much you earned (inc SMP) and how much tax you paid. Then use this handy calculator to see if the figure tallies with IR's letter.

HMRC have been known to make mistakes :) I have enough PAYE coding notices to paper the loo... The letter would have come with a statement. How does it match up with your P60? What does your payroll dept say about it?

HMRC have (several times) made a mess of my tax. Call them up and usually the people you get are quite helpful. Talk through it all and see what they come up with.

I looked at the paper again before calling them, and I saw where they made a mistake,

They added over £3000 of jobseeker allowance that I did not receive in that tax year.

I have called the jobseeker helpline and they are sending a letter out to confirm that I did not receive the benefit.

The lady on the line said she had loads of people calling in with the same problem, so glad to see that I am not alone.

Thank you for the advice.

Hi Salagadoo
I was just coming on to post a similar query to you with regard to underpayment of tax. My DH has a letter too- and his also states that he received JSA which he did not!

What was the number that you called please?
Thanks

I will try to find the number tomorrow (I called the job seeker helpline who redirected me to a different number)

All he has to do is to get a letter stating how much benefit he got for 2011/2012 and forward it to the hm revenue (the address is on the letter he received)

Thank you! That is reassuring. He phoned the HMRC and they were quite insistent that he received the JSA, even though when he applied for it, he was told he wasn't eligible! All very confusing. It'll be helpful to have the number to call, so thanks.

Hi Cousin,

the number I called yesterday was 08456088545 I did have to wait about 10-15mins before talking to someone, but then it was pretty straightforward.

He just needs to give them his national insurance number and they can check instantly and get a letter sorted for you.

I hope you manage to sort it out :)

Hi. I have just received a similar letter. Glad I'm not the only one. Some good advice here. Thanks for raising this OP.

Thanks for the number - have given that to DH to give them a call on Monday. Hope everyone in this situation manages to sort it out too!