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Tax codes again

3rd Nov 2014
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Mrs Dragon still hadn’t received confirmation of her new tax code from HMRC by the time we ran the payroll last week.  We had to use the tax code as notified by HMRC, especially as we had had confirmation from them over the phone that it was correct – but Mrs Dragon wasn’t happy to see the amount taken from her pay.

“That’s far too much,” she stormed.

“We have to use the code HMRC give us, they’ve said it’s correct,” I tried to calm her down.

“I don’t see why I have to pay all that tax.”

I attempted to give her a simple explanation of tax codes and PAYE, but ended up confusing myself as well as her.

“Why don’t we phone HMRC?” I suggested.  “You phone them, I will sit beside you, and if they say something you don’t understand, you can put me on speaker phone and I will join the conversation.”

She agreed to do that.

It took three attempts to get through, as for the first two, we went through menus only to be told there was nobody available to take our call.  Why do HMRC do that?  Surely it would be quicker not to put overflow calls through the menus at all?  Or do they hope that people will have got fed up and put the phone down as they go through the menus?

It sounded as though Mrs Dragon finally spoke to a young member of HMRC’s staff who has not yet had training in dealing with fire-breathing customers.  Mrs D built up a head of steam and raved about “too much tax”, “you’ve sent me three different codes now and none of them are right”, “I’m not paying for you lot to sit about all day drinking coffee while taxpayers are waiting for a call – and don’t give me that nonsense about us being customers”.  (And no, she didn’t actually say nonsense.)

Finally, she came off the phone saying that HMRC were going to “look into it” and send her another new tax code if that one was wrong.  “And then will you re-run the payroll and give me the difference back?”

“No, it’ll be added back to your next month’s pay, because that’s how tax codes work, they compensate for what’s happened so far this tax year.”

“So I’m going to go short this month?”

“I’m sorry, but there’s nothing more I can do about it, we have to use the codes that HMRC give us.”

She stamped off in a huff.

I’m getting too old for this kind of grief.

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By tom123
03rd Nov 2014 21:59

Advance & repayment

Just a thought, but could you offer an advance and then repayment? Or is this completely verboten in this RTI world?

(Many years back I  my department ran payroll for 200 shop floor hourly paid staff - and this was always being done)

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By Helen Crowley
04th Nov 2014 15:08

Have her call back

Assuming that the two codes Mrs D received a few weeks ago are both for the current tax year and both for her employment with you (check carefully);-

ask her to call back HMRC and ask the following:-

1) According to your records what is my current tax code being used against my employment with "X" (your company name) as the code they are operating appears to be different/incorrect ?

2) Can you give me a breakdown of everything included in that code i.e. Allowances and Deductions?

If a restriction is included for an underpayment of tax from earlier years she needs to also ask

3) How much is the underpayment and for which tax year?

4) Is that an "actual" underpayment or is it "estimated"?

If it was an "actual" underpayment she needs to ask for a copy of the calculation so that she can check it.

If it is "estimated" then it should've been corrected and removed from future coding after the end of year information was reconciled at HMRC in which case she should ask them to review the earlier year to see if there was any "actual" underpayment with a view to updating the "estimate" to the correct amount or removing it from her current coding.

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