Hi
Ive just had a tax code notice change for an employee of one of my clients going from 944L to 89T. I ended up ringing the tax office who advised this was wrong. Now this is the 3rd instance of incorrect tax codes I've seen in the last 2-3 months. No explanation was given - just 'oh its wrong/change to 1000L'
Wondered if anyone else had seen such problems - or had even thought a tax code change was odd and maybe hadnt checked it.
Rather worrying to see - wonder how many others out there are incorrect! Took me 30 minutes to get through to HMRC but glad I rang!
Replies (17)
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Loads
There are loads of weird codes around.
I'm rather surprised they spoke to you regarding a client's employee though.
Are you the employee's agent ?
This seems to be happening to a lot of our client's employees. There is no obvious reason why the employees tax codes are suddenly being reduced, in some cases by over 50%, as they don't have other employment/are on a low wage etc. We have not been able to find out why they have changed as HMRC will not speak to us regarding client's employees. Plus, these employees will not know the first thing about tax codes/personal allowances etc so wont be wanting to phone HMRC.
Duplicate employment record
Looks like last year's "duplicate employment record" software bug at HMRC end has been resurrected following the recent update.
I had hoped that last October/November's update had permanenly fixed this issue (a software bug at HMRC end, even though I got the impression that HMRC was trying to deny that it was their fault) so it is disappointing to see this tedious and time-consuming matter re-occur.
lack of P45
we've noticed the problem where an employee leaves employment A and starts employment B, and the RTI with the starter information is processed before the RTI with the leaver information (eg when B runs weekly payrolls, and A runs monthly payrolls). HMRC assumes both employments are current, and either issues a BR code, or splits the code between the two employments! So much for REAL TIME information; HMRC now get the information of leavers up to a month after leaving, whereas previously they'd get the P45 more or less straight away.
I've had a few where the
I've had a few where the personal allowance has mysteriously been taken away. In all of these cases the client has been just into the 40% band and is filling out a tax return because (s)he has rental income or a small amount of self-employment income. I was, however, appalled to see one coding which had been issued because my client was 'between jobs'. My client was actually dead...
loads
I had few wrong codes including 1 K code after ringing it is changed to 1000l. I think it is something to do with duplication of data as in all cases they had split the codes in to two saying the employees have got two jobs.
K1073 - should be K131
HMRC have sneaked in a crafty little "expected underpayment" from 2013/14 of £3700 into my client's 2014/15 tax code, which turns into a £9500 adjustment to the tax code. This happened because some twit new system doubled her salary last year on a reorganisation of her employer (yes, that old RTI problem) and decided she earned over £100k a few weeks ago when actually she earns much less than £100k.
I only found out this week. Rang HMRC two days ago and the charming man on the phone told me it could not be changed now (even through I don't think she owes anything for 2013/14) because the tax year has started now. Of course if I had rung LAST week he could have changed it.
Snottogram going off to the powers that be to ensure client does not pay an extra £300 per month in tax this year and then have to claim it all back again after the year end.
Funnily enough, they had not removed her personal allowance for 2014/15!
Did you use the agents helpline?
I do and I have never had to wait more than a few moments to get through and they are very good at sorting out PAYE codes.
Death, taxes and incorrect PAYE codes the certainties of life!
BTW why not buy a goldfish and rant at that? The results will be the same and you will save on phone bills!
Taxhound - try ringing again on the basis of 'another day another (different) answer'. If it's wrong it's wrong whatever the calendar says. If you advise that the client is in SA then they should wait for the 2013-14 SATR and not pre-judge the underpayment. A case of premature calculation methinks.
@ Vaughan Blake1
Unfortunately this client was removed from self assessment for 2012/13 so they managed to make this little mess all by themselves. I have not given up on one phone call though - there is no way I will allow them to leave this in place, despite what the call centre "helper" thought. I will be going higher up the pecking order.
Here's a cunning plan
Taxhound as the client has a UTR there is no reason why you can't file a 2013-14 SATR 'uninvited'. Show the coded underpayment as '2013-14 tax coded in a later year' and secure the refund! I have actually done this once on HMRC's advice!
@ Vaughan Blake 1
I had considered this, but it is a mess for the client. Far better just to have the correct tax code surely....
It is the overwhelming arrogance of the person on the "helpdesk" telling me that it was too late to change anything and it was just tough that really grates...
@ Taxhound
I don't disagree, but like you I feel I spend too much of my life chasing PAYE codes. If at all possible it is easier to let 'em alone.
I had a client with three pensions one was £40K, the other £10K and another for £5K and they were all with the same pension provider. Every year there was trauma, all BR, or all DO or all with a PA or any permutation other than the right one. Then having got them right by about May, I would send in the SATR and they would all be amended, and off we went again.
Roll on the day when agents can change PAYE codes themselves online!
Best get a 64-8 in place
Cheshire, you are running a bit against the grain here. These employees are not your clients. If this is a regular issue you need to get 64-8s in postion for the 'regulars'. It will save you time and effort. I'm surprised HMRC play ball at all, as you have no authority to ask them to amend these codes. It could be that an employee has income or allowances not known to their employer.