PAYE, but owe £1k in tax?

[Callamia]

Educate me... because I might be missing something.

I am paid through various jobs, but all through PAYE, and I have no other incomes/huge savings/property etc. I have one main job, and then periodically I do bits of work for other large organisations that are all paid via PAYE - I definitely pay tax and NI on these.

Why then, have I just received a letter from HMRC telling me that I owe them over a grand? Where are the errors in my tax payment occurring? My main job puts me in the higher-rate bracket already, so I think I'm paying higher-rate tax on everything already. What am I doing wrong here? Should I give up, and just enter a self-assessment tax return each year to avoid these unpleasant situations? Should I hire an accountant?

I'm on maternity leave right now, and can't really afford this kind of bill. I assume that my tax code will be re-adjusted to pay it off, but I kind of resent the surprise (not paying it - I'm more than happy to pay what I owe - I'd just prefer not to receive a bill I can't afford).

Is itthe confusion in the tax office because of more than 1 job.. my oh has an up & down tax code every year but with 1 job.
Has the TO deducted tax on your 2nd job as basic rate..try ringing them.
They can't take the whole amount in one lump unless your earning £££. Your code should be readjusted.

Child Benefit clawback, maybe, if you're earning over 50k?

Should I give up, and just enter a self-assessment tax return each year to avoid these unpleasant situations

Unfortunately yes - HMRC/PAYE cannot cope with multiple jobs

A few years back they told me I owed over £3k after lots of hours on the phone (mainly on hold) and a few letters it turned out to be a glitch in my employers payroll system. So speak to your payroll dept and HMRC to find out either could have made a mistake - better still get them to speak to each other. I had my P60 and whole year of payslips which proved I didn't owe anything and had paid all my tax but it took a bit of a fight for HMRC to accept it.

If you;re H/R on your main job, then you're liable to H/R tax on your other jobs. I suspect that the BR tax code is being used on your other jobs meaning only basic rate tax is being deducted. Hence a demand at the end of the year for the difference between HR and BR tax on your other wages.

You need to phone HMRC and ask them to issue tax codes for your other jobs to collect HR tax. But, if you've a succession of different second jobs, you'll always get taxed at BR on the first payslip because HMRC can't issue a coding notice before they know you've that new employment.

As said above, the PAYE system isn't fit for purpose for the new world when people have multiple income sources. So, you have to take control yourself and be proactive.

You need to check your tax codes for each employment. If you’ve been receiving your tax free allowance for each job, which is possible, then that’s how you could end up owing money.

When I had multiple jobs, my tax code for my main job included my allowance and my other jobs just had a BR tax code which meant that I was taxed on all income.

If you are using your tax allowance in your main job the others need to use a zero tax code, unless you've told them this they will be taxing you at standard rate so you owe tax on the difference.

Bloody HMRC.
I got hit with £3,000 demand last year and £759 this year- 2 years after I stopped working 😡😖😱
All because someone there failed to record that I was in receipt of a small private pension (I had called them and confirmed in writing, which they acknowledged)

What are your tax codes on each of your employments?

"If you are using your tax allowance in your main job the others need to use a zero tax code"

Or a negative tax code - I have an employee with a negative. it is a K code....

Just call them-easier said than done I know-but they often make mistakes, if you don't dispute it you will never get your money back.

My husband has one job, PAYE and always seems to be paying back tax owed. This has been going on for years.

Last year he rang monthly because we didn't think he was paying enough. Each month he gave them every last detail (company car, BUPA etc), and he knows exactly what they need to know, and each time they said that it'd be rectified as they'd not taxed him for his health insurance even though he'd been taxed on it for years and nothing had changed and he'd get a new tax code but it took them SIX MONTHS to actually do anything about it.
Then came a letter saying he was due a tax refund of £300!! He disputed that but they still refunded around £40 to him! Finally a letter came stating he'd underpaid blah blah blah and his tax code changed to reflect that.

Around March this year a tax code arrived for the new tax year. Fine. Then in June another letter arrived stating that he'd underpaid £400+ tax and his tax code was changing yet again due to this.

I honestly can't remember when he last didn't owe tax.

If you are using your tax allowance in your main job the others need to use a zero tax code,

OP said they were already a h/r taxpayer through their main job, so the extra jobs need to be on a DO code to deducted h/r tax. A zero code is wrong as that would just mean basic rate tax deducted.

Do you have any benefits such as a company car?

I work in payroll & each year we have a nightmare when we submit our P11D's. HMRC never seem to update the company car details so employees end up owing money.

You have been caught in a nasty little trap
I'll hazard a guess that your main job has the tax code of 1150L
I'll also bet that your other two jobs are on tax code BR
but
because your main job takes you into the 40% band, your other jobs should be on D0 which would tax them at the higher rate
so
I'll bet that the £1000 is 20% of your total earnings from the lesser two jobs

Now the good news
Class 1 NI at 12% is capped to earnings of £3750 per month.
Above that it is 2%
and despite NI normally being job specific, in this instance you should be able to reclaim that 10% of your earnings over the limit

which might just reduce part of that bill

This happened to me and I asked for them to start collecting it through my tax code for the following year as I was just starting my maternity leave and it would leave me with not a lot!

They were really helpful and I'm paying back my £1500 over two years now I'm back at work.

Mine was from having 3 PAYE jobs at once

It's the amount in the extra jobs that doesn't add up.

Two are one-offs, so £150 max each, and the other is 5k (and I did pay some tax on that of course). I assume it's my main job tax code that was incorrect. No company car, insurance etc (I should be so lucky!) I'll call them on Monday and work it out.

What was the tax code on the 5k job?
BR or D0
that one alone with the wrong code could do it (20% of 5k is 1k)

I had a tax code with letters and numbers (like 1071L) for that second job, and paid nearly 1k tax.

So it looks like the majority of what's owed comes from my main employment, where the pay doesn't change dramatically year on year (yay public sector). I'll call HMRC, but also I think speak to an accountant about how to avoid this in future.

Interesting.phone them, but don't take their word as gospel. They do often make mistakes. You might need to ring many times and fight!!

top tip. phone them on a sunday morning. nobody expects them to be open and they are really helpful

If the second job is for £5,000 and you are a higher rate tax payer then you should have paid £5,000 x 40% = £2,000 tax on it. If you've paid £1,000 tax then you haven't paid enough tax.

1k tax on £5000 is 20%, so if you usually pay tax at 40% you would need to pay around 2k because you will have used all your tax allowance on your main job.

X-post!

Agree with the previous 2 posters
You didn't pay enough tax on the 5 grand job