Income tax problems

[AMumGoingMad]

I started work with a new employer (a local council) in October last year. I was put onto emergency tax at the time but I've never been taken of it. I have spoken to the tax office a number of times who say they made a mistake and have issued me with a new and correct tax code. I have a letter stating all this. They say they have electronically told my employer my correct tax code. However my employer says all they have from the IR is the emergency tax code for me. They have received electronic updates from IR but they're all with the emergency tax code. I've hit a dead end now because basically my employer is saying it the tax office and the tax office are now saying that since they corrected their mistake back in February all their system says the correct tax code so the employer has got it wrong. What do I do? I'm now owed a tax rebate for 2012/13 tax year and for my 1st payslip of this new tax year and there its currently looking like I'm never going to get them to get me paying the correct tax at this rate because they're blaming each other and I'm stuck in the middle still paying emergency tax 6 months on from starting this job.

the payroll department is not generally the place where the bright sparks end up - we've all had this problem. It is your employer's responsibility to sort out your tax code and pay you correctly.

you reclaim the over-paid tax on your tax return, but first, get HR to stop cocking up. Do you have a manager that you can go to?

I've spoken to the person at employee services that my manager has told me to speak to. She is well and truely blaming the tax office. She says that they have only recieved electronic adjustments from tax office that keep me on emergency tax. Tax office say that they sent yet another electronic adjustment at the end of Feb, employee services claim they never got anything then. They got my new year adjustment on 5th April stating it still to be the emergency tax code. But that doesn't make sense because the tax office sent me my PAYE Coding Notice with the correct tax code on it. Nothing is making sense to me any longer other than I'm still paying the wrong tax.

I don't do a tax return so how do I claim back my over-paid tax? I'm assuming I need to wait for my P60 and then act on that?

By emergency tax code do you mean 944L m1 (or w1 if you're weekly paid)? Because using this code for the whole tax year gives you roughly the right amount of tax deducted. 944L is the standard tax code for the current tax year. M1 means that you get one month's worth of personal allowance per monthly payroll run. Therefore, if it's used from first month to the twelfth month you get the full allowance.

Last year's tax may have been wrong... You can write to HMRC and ask them to recalculate (they should do this anyway around August but...)

No, I'm on OT so I'm getting no allowance at all.

OK, that is unusual. They seem to be thinking it's your second job. In theory they should sort it all in May when P35s are submitted but with new payroll systems coming in I'm not sure whether the existing systems work as required. I know it's a hassle but can you contact HMRC and ask them to resend the correct tax code. If you've already been paid in April then HMRC should be able to see that an incorrect tax code has been applied.

Some info about tax codes and getting them changed here if you haven't checked it out yet.

Thank you riksti. Thats what they said to me that for some reason they had me as it being a 2nd job but its not. HMRC have acknowledged their error in this to me in a letter. They've also sent me my PAYE coding notice that is correct so why its not been applied is what no one seems to understand or accept responsibility for. I spoke to HMRC again today and they say that they will resend the correct tax code. I have been paid in April (mid april) HMRC didn't say that they could see that the incorrect tax code was applied when I spoke to them today.

If HMRC have issued you with the correct tax code (on paper to you) then that same notice will have been sent electronically to your employer, so my guess is they are failing to apply it properly, if you have a paper copy anyone with any sense would override the basic rate and change it to the standard tax code.

Once you get your p60 you send it to your local tax office with a letter saying you believe you've overpaid tax for the year for the refund.

Or it could be that pay was processed before the revised notice reached the employer in time to apply for a mid April pay run.

New RTI payroll is flushing all sorts of errors out at the moment.

I'd be inclined to think that a previous ex-employer never removed you correctly and therefore tax allowances have been split between your actual employer and a previous inept employer.

Have you ever done agency work op? I've seen a gazillion problems like this in the last 3 weeks

In theory your current employer can amend the code using the notice sent to you, I do it sometimes for people.They may argue that they can't though...

The tax will correct itself automatically for the year to date eventually, so you don't lose it permanently

No I've never done agency work. This is the 1st job I've had since folding my own business and ceasing doing tax returns 2 years ago. Could that be the problem? I did everything the HMRC told me to do and it was them who wrote and told me I didn't need to do tax returns anymore. I then had 1 whole tax year where I didn't work and never heard a dicky bird from them. Then I started this job in October so mid tax year and I've had all these problems. Is it possible that something went wrong with my closing my business but I am unaware of? But then HMRC say that they made the original error in putting me on OT so I'm not sure that is it. I think originally it was just human error at HMRC but now I don't actually know where the error is.

ThingummyBob I will send employee services a copy of my PAYE coding notice and ask them to adjust it manually and see if they will. I'm also going to all them tomorrow and see if this latest electronic update from HMRC has actually happened.

OK sounds like utter incompetence from HMRC then which is soooo unlike them

If your work will put you on a normal code it will solve the issue though, so good luck!

From my 34 years experience in HMRC Council payroll departments are notoriously piss poor!
OT is an odd code to use as is hardly ever used these days (normally Emergency code or BR if no P45 from prev job) so sounds like payroll cock up to me.

Thank you all for your advice. After yet more phone calls to payroll and HMRC I eventually spoke to managers in both and told them both to sort it and got a fax number for HMRC to fax the tax code to. I then called the payroll manager after the HMRC had told me they had fax confirmation and made them sort it. I can't believe the palava of sorting this but it is sorted at long last, its taken since October and I don't know how many hours on the phone but at last its done.