Tax and HMRC, what the hell happened?

[messystressy]

My DH has had three jobs in the past 6 or so years. He is an account manager and gets paid a salary, and sometimes bonuses but rarely in the last 2-3 years. He pays PAYE tax. He received a letter from HMRC saying that they had no record of receiving a response to the previous two letters they sent and that he owes £400 in unpaid tax from four years ago. There were no previous two letters at all (I open the post). He rang them up and they confirmed this, and told him they would sent out a letter explaining the shortfall and how it was worked out. About a month later, he received a letter from HMRC stating he owes £2,000 in unpaid tax from the last year. No letter regarding the four year ago 'debt'. What the flying fuck?! This is two different employers, both global firms, and we never noticed any additional pay in his salary. I am at a loss - has this ever hapenee to anyone else? I am not sure what to do now. The call centre was less than helpful and I am stressing out! I thought the whole point of PAYE was to avoid this happening? I too work and have never had this happen to me. Any advice greatly appreciated.

That sounds a bit wrong - if he has a bonus in one year then it's possible to owe tax for the whole year, because the bonus isn't accumulated for iyswim (I know I'm explaining that badly!). But if the tax is for this year the only time I've heard of that happening is if he's been on the wrong tax code? But then you usually get to pay it off in instalments I think?

I think you can do a couple of things:
Check this is genuine. There are a LOT of HMRC scams about because people get scared and basically do whatever they are told.
Speak to his work payroll dept.
put it in writing - you can complain and ask for an investigation but there are tight limits for this
Speak to an accountant - it will cost you a little bit but there's a lot at stake.

Good luck.

Thanks for your suggestions, think letter complaining/investigation is the way to go, especially as in the last financial year there was no bonus at all I think. We would have noticed the extra pay also, even spread over 12 months. All just very strange, especially the two tax debts - and the missing letters. They are genuine HMRC letters, wish they weren't! I just wish they would provide some information - the letters are literally 'we have looked at tax year x and you owe £2k. This must be a surprise to you, but don't worry, we will immediately start deducting instalments every month. Bye now!!!!!'. Ok, maybe not literally...:D

In the mean time, dig out all of his payslips and P60's and work out his total income and total tax paid
checking especially for anything like cars, benefits, healthcare
and see if anything pops out

Did he have any benefits whilst in those jobs - medical/dental/car etc?

My dh had a similar problem. He too works for big companies, PAYE, monthly salary.

He got a company car, informed the tax office of this by letter, getting the reply its not up to him to tell them but the employer. It took 8 months for them to sort it.
They took £200 / month for the first year and an extra £350 / month the next tax year. £550 was a big loss in income.
They will take the biggest % that they can. No arguments.
Not much help to you, but the hmrc couldn't organise a piss up in a brewery.

I feel your pain, hmrc didn't ever charge me tax on my fuel benefit despite being told about it. I thought was included in the car benefit element. Long story short 4 years later I started getting these letters, I ended up owing them 5k and they deducted £800 from my Christmas paycheck which was scary.

Don't deal with the customer services they don't know their ass from their elbow - ask to be put through to the underpayment specialist team.

They will do a full assessment & if it is owed they also have the power to set up an interest free payment plan to take the underpayment out of his tax code and spread the payments over 3 years.

Took me 3 phone calls to get a coherent explanation from HMRC as to why they wanted £500 from me - if they had put the info in the letter would have saved a lot of work for them.

Was then another 3 phone calls to get them to supply me with the means to pay (no longer working so couldn't use tax code).

Second advice to check P60s for income and tax paid. Has dh ever self assessed, if so they like to assume anything outside of PAYE that year will still be case this year. Or do you receive child benefit and dh income over limit?

We have just done the tax return and dh (paye) owes 5,000 - CB charge and the wrong tax code used by his employer. Trying desperately to pay 2,000 off so the rest can be coded out.

A word from the old and wise :
Before you phone HMRC do a search in the manuals section of their site to find the page closest linked to your situation
then when they start reading from it you can quote it at them and demand to be put through to a specialist officer

This is the section closest to this thread
www.hmrc.gov.uk/manuals/eimanual/EIM20000.htm

Is his tax code right? Do all the jobs know about the others? If two companies are both using the standard code he would be getting two personal allowances which would generate an underpayment.

PS
Do not rely on the new RTI system to actually notice any coding anomalies at all. Its beyond useless
because it was written by the same muppets who have failed to make the CIS system work

I had a letter saying I owed money. Called th, twice as I just couldn't understand how. I'm PAYE, no company car or benefits. Apparently if been sent a cheque for a refund for 2k, which I never recieved, and this accounted fore owing them money. I wasn't told this on the first call. Might be worth asking if you'd ever been given a refund (that you didn't receive!)

HMRC are sometimes breathtakingly incompetent.

My Dh recently had a tax demand for 3k and a letter pointing out that he had, according to HMRC, earned about 12k more than he actually got last year. It took some investigating but it turned out his stupid former accountant firm were still filing erroneous returns for him even though he was no longer their client.

Always phone or write. Some of the staff are helpful and some are useless.

Thanks for the many response, my husband rang up and was told that two companies had him on the wrong tax code. He has appealed it - but I do suspect perhaps he didn't submit his P45 to new employer each time, could that be the issue? I haven't asked him, but sounds like something he would forget to do. We are not the best at paperwork in our house, despite accordian files and best intentions. If this is the case, he has certainly learnt his lession now!!

If he didn't hand in his P45 from the first job, the second job might've wrongly given him a full year's worth of personal allowance by operating a cumulative code.

In the absence of a P45, the second firm should've used a week 1/month 1 code (instead of cumulative) to stop this happening. Check the payslips. If the second employer didn't operate week 1/month 1, he could write to hmrc alleging employer error (they will then probably chase the employer, not him, for the underpayment).