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Issue with accounting firm doing company payroll

Accountants not operating tax codes correctly

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A driver I know is paid weekly by his employers, whose payroll is run by an accounting firm.  He discovered that HMRC had notified a new tax code based on a pay run for him which was put through another company whose payroll used to be done by the same accounting firm which he had never worked for or even heard of - a weekly amount of £9000!  So now HMRC think that his annual earnings are over £450k and demanding oustanding tax for previous years of £6k or more.  
To complicate matters, while he has been trying to get HMRC to sort this out, the accounting firm doing the payroll have been operating 1250L as his tax code even though HMRC have issued numerous other instructions.  AND since all this emerged, no pay slips have been issued either!  So the poor man doesn't know what to do or what is going on.
I can't fathom why a professional firm would ignore tax codes like this - storing up trouble for the driver and I imagine for themselves as well.  Any ideas anyone?  I'm not sure what advice to give him, other than get his employer to find a new payroll provider and keep talking to HMRC - and might it be some kind of fraud?  

 

Replies (7)

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By Wanderer
25th Jul 2019 18:02

Always keep an open mind that you may not have the full story.

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RLI
By lionofludesch
25th Jul 2019 19:47

Not much to go on here.

Get some information from this accounting firm.

Maybe "where's my £9000 ?"is a good question to be asking as an opening gambit.

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By jcace
25th Jul 2019 23:01

It sounds as though the tax codes have only been issued as a result of HMRC (wrongly) believing that the individual is earning £450,000 a year.
If the individual had been on a 1250L code prior to this, then you shouldn't need to worry. Tax codes are a mechanism for collecting tax that HMRC believe is due. The actual income and related tax can only be accurately determined after the end of the tax year.

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By NH
26th Jul 2019 07:34

aha, the old "I know a driver" routine. Doctor I have a friend with a very embarrassing problem......your "friend" needs to deal with this himself it is between him and his employer

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By LostinSuspense
26th Jul 2019 13:04

I doubt it is some kind of fraud, sometimes HMRC could be issuing lots of contradictory information in the post to the people preparing the payroll.

If you are issued a tax code notice by HMRC, you are supposed to use it and let them know if it is wrong. In my experience, the accountant will err on the side of caution rather than leave a large tax bill owing at the year end.

Has your friend actually asked for payslips or are they meant to download them from a website, these days you may only get an electronic wage slip rather than the traditional paper payslip from some companies.

They will have to talk to HMRC and the company preparing the payroll to get clarification on this and worth doing sooner rather than later.

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By Jdopus
26th Jul 2019 13:28

The issue here, if the situation is as you describe, isn't the operation of the tax codes as these sort themselves out at the end of the year anyway.

The only thing he should be concerned about are the additional earnings being reported against his name. Tell him to worry only about that. From the sounds of it, if he's already alerted HMRC to the problem, he should either wait for the accountancy firm to correct the filings or if he loses faith and doesn't trust the accountancy firm, he needs to get professional help from another accountant to speak to HMRC on his behalf and issue a letter to them explaining the situation.

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