HELP - PAYE and TAX

[Whixhwaydoigo]

Does Anyone else have issues with your payroll dept?

Everything was going ok until work got a new payroll system! For some reason the cumulative pay went from £84000 to £114000 which triggered a tax code change. Then when they tried to correct it it went up to predicting I’d want £166000! This happened over one month but now the system is saying I’m owed £14000 in tax on top of my normal pay which I think is incorrect! I phoned up tax man and they said yes it’s all correct but I think I’m owed about £2000 but not £14000. My pay roll person is being pretty aggressive about it saying she can’t be responsible for what the tax office does. They can be responsible for getting my pay right in the first place!

where do I go from here? I’m going to be paid loads next month. I am seeking help of an accountant which is going to cost me but thought i could rely on PAYE. Because my work did weird stuff to my payslip is the sum automatic at HMRC?

Your payroll person is right that they have to use whatever code HMRC have issued. But are the numbers right? How much have you earned to the end of December, is it 84k or is it 114k? And how does the 166k come into it?

£84k! The other numbers came in when they introduced the new payroll system. FYI they got mine and another person salary mixed up at the same time so I got paid less that month!

If HMRC think you've had too much tax deducted, they'll order a refund. I wouldn't panic about it. If you get £14k, put the excess into a high interest account until beyond the end of the tax year and wait for them to contact you/claim it back or until your work starts adjusting your tax again. Whatever you've been told, get it in writing too.

Ask your payroll person for a spreadsheet showing your gross, net and taxable pay plus all deductions, and a clear note of which tax code was applied when. What did they do to correct the pay when they fucked it up?

Yes, they can only apply the tax code as issued by hmrc and they cannot speak to hmrc on your behalf. You need to make sure they (payroll department) have fixed the error though.

Assuming the OP gets payslips she will already have all of that information

What is your correct salary and what was the wrong one they paid you? Do payroll now have the correct salary for you?

A similar thing happened at my work when the payroll system changed, luckily not to me but one person had endless problems with HMRC that were caused by HR being useless

Put in a formal complaint to your line manager, and tell them you have reported it to HR, who are being less than co-operative.

You definitely need to get it sorted out before they do the end of year P60s.

Payroller here. One the one hand it astounds me how little testing some places do when they implement new systems. However, it also very much depends on whether your payroll department is/has a specialist payroll person or an accountant/hr person moonlighting as a payroller, which happens so much. People genuinely don’t appreciate the specialist nature of the payroll profession and how much we do behind the scenes and think we just ‘press a button’. We are one of the most undervalued, underestimated professions and good payrollers are often tarred with the brush of the experience of bad ones. As soon as something goes wrong with wages, everyone always blames payroll but very often we are not the source of the problem, we are simply the end of the process and don’t have crystal balls that can find all the errors we were given to process.
I would advise asking for copies of all your payslips for the year to date and ask for a meeting to go through your year to date figures and tax codes and see where they have all originated from then you can work together to find the source of the incorrect data. Please be kind to your payroller, they work very hard to keep you paid correctly and might just be fed up of having all the blame placed at their door.

If you earned 84k by December you'd be on target for 126k for the year assume same salary throughout. Or did you get a pay rise during the year? Did you also get a bonus at the end of the year?
If you don't make extra deductions before tax eg to your pension then your tax code will change substantially when you go to 126k because you have to pay most of that 26k in tax. If you were on the standard tax code at the start on the year eg if you began the year on 100k then you could end up owing quite a lot on tax, yes.

Is the cumulative pay on your payslip showing as £114k or is that showing the correct amount?

I'm not sure if you're saying the payslips show an incorrect cumulative pay or HMRC is showing the wrong amount on your personal tax account.

The pay system made my salary at the time jump from £64 to £114K when it botched up. They then tried to correct it and my salary cumulative then jumped to £166000. I will earn £102599 by year end. Payroll would not issue me with a new payslip (tried to use a call but the person was gunning for a flight when I was trying to keep it professional). I don’t want to get anyone in trouble but when I have to now clear up the mess and will need to ask a tax professional to look at it and pay for that. My payroll said they couldn’t issue a new payslip within the month to correct it! By my own calculations I’m owed a few thousand at best from the tax calculator! I called HMRC and they said it’s correct but it’s not and my payslip (much as I’d love ££££) will be recalled at some point!!!

I think you're being a bit unrealistic to expect a new payslip, rightly or wrongly theyve paid you the amount they've paid you they can't give you a payslip with a different amount on

That would need to be sorted out in the following month

@Catlady1982 is it right to say that HMRC will be adding each month individually rather than looking at the year to date total and working out the difference each month?

They corrected gross and taxable in one month but forgot tax to date which is only being corrected this month! I think I am being realistic to expect the figures to be correct as the amount of issues are mounting up on me! Might not bother payroll but im
surprised there was not much care the next month even though payroll said they were dotting the ‘i’s and ‘t’s the following month it still wasn’t right! Even if they can’t correct the payslip!

@busyd4yDifficult to say without seeing the big picture, sounds like there’s a couple of issues at play

@Whixhwaydoigoits not common practice to issue a new payslip in month. Once you’ve run payroll that’s it, it’s fixed and any corrections are done in the following period. It sounds like you’ve had an incorrect salary payment and incorrect year to date figures which is compounding the issue. A simple spreadsheet with it all laid out will likely clear it up. The payroll system should accept YTD corrections if HMRC compliant.
I have seen before with implementations that YTD figures have doubled but this should be picked up at testing. These things do happen, after all payroll are human and humans make mistakes.
It would be much simpler to correct in March being the last month of the tax year rather than after. There will be a simple fix.
Is it a small/large company? Sole payroller or team? Any analysts/data specialists?

Hi a small company - the list of mistakes are mounting. I got paid someone else’s salary in December so that means I know roughly what someone else gets paid and VV. work said I had to put query in with my bank as it was their fault (the bank)..They did a 1pm check. we were due to get paid on x date and then it was the following Monday. The cumulative totals were wrong so my tax code changed to pay more tax and work said it was HMRC fault. Then they tried to correct the amounts and my cumulative went up another £50000. So another tax code changing. Payslip with gross pay to date and taxable code ok but the cumulative total for tax still not corrected so now tax code change thst I’m owed loads of £££s so I’ll be paid 3 x my usual salary this week. Phone call to HMRC, is this correct! Yes it is but in my rough calculations I’m owed a fraction! Next month I’m likely to be requested to give most of it back. I’ve sent another letter to HMRC so I won’t be fined! I asked payroll if they felt my pay was a bit high and they said yes we thought it was a bit high!

im am tolerant of mistakes but it’s the attitude. I tried to resolve with payroll but they got defensive and really quite aggressive in a call so I’m reluctant to speak to them again. My manager is aware but I need to speak to HR about it. FYI we had an all hands call and a lot of people had comments on the new pay roll system and the mistakes they were encountering!

@Whixhwaydoigoblimey, sound like it needs escalating and some proper analysis doing. As I said before, the problem with small companies is they often have a finance person just feeding in the data and they don’t necessarily understand the consequences.
Its difficult to suggest where to go but if they’re being defensive I would guess they’re not confident of how to fix it.