We got a nasty surprise from the tax man the other day.

MrsGrahamS has been on maternity pay for the past year – so she checked her tax using the HMRC Tax Checker which reckoned she’d be probably be due a refund. 🙂

So she duly sends off her 2010/11 P60 to the tax office. Unfortunately this prompted them to take a look at her previous tax records 😯

Now it’s all paid through PAYE so should (in theory) be fine – but apparently her employer (NHS) has been using the BR (Basic Rate / Emergency) tax code for her since 2007, despite being sent proper tax codes by HMRC four times.

Cue replies from the tax man saying “Ah ha ha suckerz – we don’t owe you money – in fact turns out you owe us four grand!”

****, there goes the school fund 😥

Ouch!

Ooops. You should have been sent copies of any tax code changes too.

Worth doing your own calculations to ensure the tax man has got it right – they seem to be making plenty of mistakes at the moment.

Surely if you’ve been on an Emergency Rate, you’ll have overpaid tax, not underpaid?

Agreed – just been sent a bill for £6k for me and my business partner despite paying all bills on time, submitting records correctly etc.

Nice.

🙁

what aidy said.

…you’ll have overpaid tax, not underpaid

The BR tax code taxes all your income at the basic rate, i.e. 20%. If you earn less than the threshold for the higher tax rate then you will have over paid, however if you are in the higher tax rate then you may well have under paid.

The employers error not withstanding, she really does bear some of the responsibility (and all of the accountability) for not having checked her tax code before now.

Looks like every government/council has been under orders to claw back what they can.

Despite getting a 100% student exemption on my council tax every year confirmed on the council tax bills I got a £2800 bill the other day for 4 years back dated council tax. I graduated last year and the uni removed me from the system in January but the council has only just decided to check the last 4 years and as I was not on the system sent me a bill for an ‘instalment’ of the full amount to be be paid in 7 days which gave me 4 days from getting it in the post or they would add another £104 and take me to court. Thank fully should all be sorted now as I don’t have £2800!

The BR tax code taxes all your income at the basic rate, i.e. 20%. If you ear less than the threshold for the higher tax rate then you will have over paid, however if you are in the higher tax rate then you may well have under paid.

Yep, that. BR is everything at 20% with no personal allowance, but she normally a higher rate taxpayer so that doesn’t quite cover it even without the personal allowance!

You should have been sent copies of any tax code changes too.

Someone else said this to us. I’ve never seen any such letters for myself or her. Do they usually send out letters every year (i.e. when only the personal allowance bit has changed) or just when the letter part changes?

The employers error not withstanding, she really does bear some of the responsibility (and all of the accountability) for not having checked her tax code before now.

I’m far too loyal to agree 😀

Accountability is interesting though: the letter does say if underpayment was caused by an employer making a mistake in PAYE then they might be liable for the bill instead of us. However according to a tax accountant mate, that never actually happens. 🙁

Someone else said this to us. I’ve never seen any such letters for myself or her. Do they usually send out letters every year (i.e. when only the personal allowance bit has changed) or just when the letter part changes?

I get one pretty much every year but my tax code changes a little every year because of different pension contributions and savings amounts. Incidently as a higher rate tax payer she really should have been doing a tax return too to account for any additional tax/relief that comes with paying tax at the higher rate.

I got a hefty tax rebate in February but I daren’t spend it incase it was a mistake! they said they’d send a letter explaining the calculations but I haven’t received it yet and won’t be asking for it incase they realise an error was made and they want it back.

That reminds me. I must get onto them about that fine they sent me for not sending my tax return in despite a)doing it on time and b)having been through bankruptcy since then.

Don’t always believe what HMRC tell you. They told me last year I owed them 2.5k – they were wrong, and eventually I got somewhere.

@wallop: sadly I’ve now been over her payslips for the past couple of years – they all have a tax code of BR NONCUM or BR CUM instead of a real tax code.

The gross pay and tax paid amounts add up to the same totals as her P60s, and those match the figures in the tax calculation from HMRC – so unless I missed something I’m think they’ve got us bang to rights. 😕

It’s money we should have paid – so part of me thinks “fair enough” – but on the other hand we’ve made financial decisions about how long she could take for maternity, nursery, returning to work part-time etc based on money we thought we had so it’s a bit of a shock to sudden lose a chunk of that security.

Hi Graham, if I remember correctly your wife is medic? mine is too and got this aswell.
As to those saying should have gotten code change notice – they change post 6 monthly as part of training which has compounded the issue and rely on the muppets in payroll to do their job with what provided, i.e. p45’s and p60’s as requested.
Mine got similar letter for £4500 and on attempting to appeal got petulant reply of we did everything right so is your fault so there.
Is Mrs Graham on Drs.net? if so get her to do forum search as loads been stung. One guy has found good accountant, in Aylesbury I think, who my wife is dealing with to sort it hopefully for reasonable fee – even recouped professional expenses for other guy.
Can ask her when she gets in for his email address if want?

you should of got a P2 form explaining your tax code for the year. if you didn’t chances are there was a problem with the address they had on record for you…

Yeah (without saying too much on a public forum) she is a hospital doc and we have heard similar horror stories from other medics too.

You’d think with them changing posts every six months that NHS payroll might get better at dealing with it! They were given the correct P45 as requested when she started but they don’t seem to have applied it, or used any of the four tax codes that HMRC issued.

I’ll get her to check Drs.net and yes that email address would be useful thanks.

Rumour has it they’ve also moved some folk into different (non-final salary) pension schemes without telling them – so check that out too!

so HMRC have issued tax codes and NHS haven’t applied them? That is crazy!

you should of got a P2 form explaining your tax code for the year. if you didn’t chances are there was a problem with the address they had on record for you…

These must only be sent out in certain circumstances though surely?
I’ve been working full-time since 1997 and I can’t recall ever seeing one – except possibly when I’ve filled in my own tax return.

so HMRC have issued tax codes and NHS haven’t applied them? That is crazy!

That’s the way it looks at the moment. We’re trying to get records from the payroll department but yeah, HMRC say they issued four different tax codes to her employers over the period in question, yet all her payslips just have BR as the code.

Unfortunately the inability of payroll to do anything right doesn’t surprise me. I can’t imagine they ever let themselves go unpaid or not receiving what due like I have seen them do to clinical staff so often.

You would indeed think as this sort of job change happens to all junior medics up until consultant level that they would have a system in place but it seems not.

Will forward that address later, hope he is of some help, seems to know his stuff.

Like yours, my wife doesn’t contest paying tax but as a salaried staff member assumed providing hospital with P45’s etc would be taken care of, wont make that mistake again!

Graham if email in profile is correct you should have that address now/ soon

Thanks Niall.

Well done nsn,good to see people on here looking out for one another,just like it used to be.

Amen to that duckman. Despite the seemingly-bitter surface arguments (which I think is just the standard debating style of grumpy old men) underneath this forum has always been a “power for good” as far as I am concerned.

Graham S you get a P2 when your code changes, so it surpises me that the OPs partner didn’t get one

I’m the OP 🙂 The missus says she has never seen one – HMRC said they had issued tax codes to her employer but didn’t mention sending a P2 to her – we’ll ask them explicitly about that, ta!

I got hit like that when I changed companies once. Turns out they had forgotten to tell the tax man about a fully expensed company car for 7 years.

My big pay rise for the new job was more than destroyed by the new ‘special’tax code they arranged for me.