Tax refund help?

[ihearttc]

I will try to make this as brief as possible because it's quite confusing so feel free to ask if non of it makes sense...it doesn't entirely make sense to me either!

Yesterday completely out of the blue DH received a letter saying he had overpaid tax for the year 2013-14 and would be receiving a cheque with a refund. Don't want to go into exact amounts but its 4 figures.

As you can imagine we got quite excited and mentally spent it all! However I then checked all the paperwork with it and they had his tax code right but a completely random amount for his salary. DH is a relatively high earner (well high for us anyway) but the salary was very low...virtually as low as his tax code if that makes sense?

So he called the helpline and he was asked his tax code and they then said it was a mistake and to just send the cheque back when it arrived. Obviously DH will do this but we are totally confused as to how they arrived at this random figure for his salary. He works for a major company and has never filled in any tax forms or anything...its all done through payroll.

He gets paid his salary, then a company car allowance,annual bonus,travel allowance and he also gets his expenses paid. He pays out his pension from his salary before he receives it.

DH asked them how they got to this figure and they wouldn't tell him. Im all set to just write it off as one of those things but something is niggling me as not quite right but I don't know what.

He wondered if somehow he'd been paying tax on his pension when he shouldn't have been...would that cause them to generate a completely separate "salary"?

There is absolutely zero correlation to what they have got his salary at and what his salary actually is yet the tax code/personal allowance is correct...ie he couldn't have that as his salary if that was his tax code! Surely these things get checked before they are sent out and they must have got this random figure from somewhere.

To complicate matters even further DH works abroad a great deal so is away for the next 10 days and can't actually get in to see Payroll or even really call Inland Revenue.

I realise Im totally clutching at straws but I just wondered if there is anyway it could be correct and we are entitled to it...the man he spoke to literally just asked his tax code and then said it was the same as what he had so it must be a mistake. He didn't ask any further questions as to how his "salary" is broken up.

Any suggestions welcome!

I would think when the letter arrives, it should explain the basis for calculating the refund. I got a letter just after I started my new job informing me I earnt [my actual salary]*2 so owed them a shedload of unpaid tax. This was more easily explained as being because the P45 was slow in being processed, so they thought I was employed at both places. All resolved quite quickly. But the letter telling me to cough up stated clearly what the reason for coughing up was.

I would get him to email Payroll to see if they can explain it.

Do you mean when the cheque arrives it should explain why?

We have the letter saying what they have based the amount of refund of which reading between the lines is because they have his salary at the wrong amount.

I wasn't going to put exact figures but it might help explaining so here goes...His tax code is 944L which I assume corresponds with his PA being £9440. But they have got his salary at £11,000.

His actual salary is about £60,000 but he also gets Bonus,car allowance and pension payments in with that so on his P60 his Gross Salary is around £85,000 which I know sounds crazy but he does a very specialised job works about 14 hours a day based 150 miles away from where we live and is often not here for 2 weeks a month!!

So what we want to know is that where they have got the £11,000 from as his salary when every other detail is correct...this is what is making us think perhaps he has been paying tax on some part of his "salary" when he actually shouldn't have been hence them sending us the refund.

Does he normally do a SA return ?

Nope he has never been asked to do one...everything is done through payroll at work. Tbh I don't think it even crossed his mind that he would need to do one. We've never had anything like this before and he has been at the company for 8 years but only this year has his salary been at this level if that makes sense?

Has he changed company cars recently ( perhaps to a lower bracket one). Hmrc are notoriously slow at processing P11Ds for car tax.

It wouldn't take it down that low though - more likely computer/admin error.

If I were you I would get the p60 for 13/14, photocopy it and when the chq arrives return it with a letter and copy of the p60 and ask then to confirm they have the correct info allocated to him, check ni number etc.

They are notoriously bad imo of cock ups and then coming back yrs later wanting more info. Keep copies of everything including the cheque and keep a good paper trail.

Sounds like someone (more than likely in payroll, as it's more or less all computerised now) has put in the wrong figure by mistake.

Nope he doesn't have a Company Car-they give a Car Allowance instead which is set amount every month on top of his actual salary so that we chose what car we have ourselves if that makes sense?

I was just wondering if because this Gross Salary is made up of so many extra bits on top of his actual salary that there has been something he has been taxed on which he shouldn't have been.

I think you are right its more likely just an admin error but it's bloody annoying!! He might earn a lot of money but we don't actually see a huge amount of it...as I said he works 150 miles away from where we live so a huge chunk is taken up with train travel.

Possibly very stupid question but how do they get the information thats on the P60 in the first place? Because everything is correct on there...is it literally just copied onto there system.

I could understand a few figures out, a 0 missing etc but its such a randomly different amount that surely together with his tax code and a refund for that much money should have caused some concern.

I just keep thinking what if we'd just cashed the cheque and then found out it was a mistake...we'd have had to pay all of that back.

I mean how do Inland Revenue get the information thats on the P60?

Most companies send those details electronically to HMRC. That's how it could have been due to incorrect inputting.

The p60 could have been done separately, that's how it could be different. Depending on the systems and software they use it may not automatically be the same system that does the p60 and sends the figures.

He's an employee and doesn't work as a ltd company?

If it was a ltd company he'd still be an employee.

Well with the new RTI rules the figures have to be submitted from the same place as the payroll is done.

Pressed send too soon.
It's less of a yr end submission and more of a final submission from the same place.
I can't stress enough that you follow this up.
The next thing I predict is a letter saying he owes tax

No he is definitely an employee...without giving loads of information away the company he works for is a major insurance company in London with thousands and thousands of employee's if that makes a difference.

So the figures are put on the P60 and then put on the system again at HMRC?

Penguin...would you say something is definitely not right here then? Im not even that bothered about the money (although would obviously be welcome) Im actually more concerned at how they've reached this figure and what happens going forward. Like you I was wondering if we would now get something that says we owe tax.

We didn't even claim the tiny bit of CB that we could have had when they changed it for fear of it messing up the tax so this has come completely out of the blue.

The chap DH spoke to seemed very dismissive as well which didn't exactly ease our concerns!

One other random question and apologies if this sounds really stupid. I don't work...mainly because he has really unpredictable hours and due to his travelling he is never here and we have no family support nearby to help. This wouldn't have anything to do with this married tax allowance they have been speaking about?

No it's not married tax relief, that is not confirmed yet.

This situation is not right, you must write to them and clarify details. Don't take anything as final from them over the phone.
The salary details for the employee are submitted to hmrc via RTI (real time information) every pay run and at the end of the yr you send a final report to tie it up.
It's not someone typing it in and getting it wrong.

I would be concerned about this error.

On another note, if you don't work and have young dcs, you really should be claiming child benefit. You'll be missing out on your state pension. This is important! Dh will be fine because of his NI contributions, you will not be.

It sounds like a cock up to me. Some of the helpline advisers are appalling. I've actually had them advise me to do something illegal before now. You need to get on to payroll. Waiting a couple of weeks won't matter.

On another note, if you don't work and have young dcs, you really should be claiming child benefit. You'll be missing out on your state pension. As long as op HAS registered her dc for cb she can choose not to receive payment and still get the NI credit.

Also you don't go to the payroll dept of his work, you deal directly with hmrc but in writing only

sorry not sure where caps came from ! HMRC won't deal with you , only your dh . Can he not call from where he is working or write?

I claimed the CB from when I had DS1 who is now 9 and then when I had DS2 but when they changed the threshold I called them and asked what I was supposed to do and they said to not claim it as DH is a higher rate tax payer and because it was on a sliding scale it was hardly worth getting as it would affect his tax code. They sent a form asking me to confirm that I wouldn't be claiming it and thats the last I heard about it. I worked part time until 3 years ago when I had DS2.

Im know assuming that information is wrong as well?

Thank you Penguin thats really helpful. That was my gut feeling that something is not quite right...those figures aren't just plucked out of thin air and I figured it wasn't just someone sitting there typing the numbers in but unless someone tells you otherwise people are just going to assume the information is correct.

He is on a plane at the moment so have e-mailed him to try and explain and will get him to call/email payroll tomorrow and then take it from there

LIZS, Absolutely, I hope op has done this instead of cancelling the claim.