Tax Code Problem | AccountingWEB

Tax Code Problem

Client on a six figure salary had a BR code operated for most of 2011/12 and asked me what to do.  Mindful of the large tax liability which had built up I asked HMRC to issue a 0T code for 2011/12 which they did in February 2012, applied to March 2012 payroll.

Result?  Disaster - the tax due for the month of March exceeds gross pay and the employer has deducted it in full thus creating a debt from the employee to the employer.  I had not expected this to happen, with hindsight I should have asked for a Week 1.  If it had been a K code this wouldn't have happened, so are there any regs which cover this situation, or has the employer operated the payroll absolutely correctly?



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It sounds correct to me

TomMcClelland |
TomMcClelland's picture

There used to be a maximum tax deduction...

taxhound |
taxhound's picture

Maximum deduction is K codes only

TomMcClelland |
TomMcClelland's picture

Surely this is HMRC's mistake

sijolees |

Negative pay

Peter Kilvington |

Why were they on BR?

RebeccaBenneyworth |
RebeccaBenneyworth's picture

HMRC unsympathetic, in my experience

micro business advisor |

HMRC advised apply on a week 1 month 1 basis

mickings |