Tax Arrghh

[mrcharly-YHT]

I received two letters from the tax thieves last week. One saying last year I'd underpaid by £253. The other giving me a new tax code and saying I'd underpaid by £460 . . .

So I phoned them up today and spoke to a helpful person. Seems the computer can't cope with fluctuations in monthly pay (I get bonuses sometimes), had put me on week one tax for one month then screwed up the calculations. I've actually *overpaid* tax to the tune of £30.

New tax code will be issued soon.

What gets me is I had to phone up and get a person to look at it and push buttons to get that correction. It should have happened automatically, I'm on PAYE.

[Polar Bear]

I had a similar problem with one of my sisters a couple of years ago.   When I did her numbers a big demand turned into a small credit.   The tax system is clearly not fit for purpose.

[rafletcher]

My wife. who is retired but still does occasional cover work, get this all the time.  It probably would have righted itself - eventually. Do you do your own tax return each year?

[mrcharly-YHT]

No - stopped doing that a while ago. Haven't had any issues for years until now.

[ian]

I get paid varying amounts monthly (occasionally several thousand pounds difference) and there's usually a correction or three from HMRC and occasionally I have to query them because they look wrong. Sometimes they correct themselves. The option is not to use PAYE but since I only have one income these days, I can't be bothered doing taxes.

The mothership recently budded us off as a new business, and they screwed this up twice with HMRC, losing my tax code entirely at one point. The people on the phone were surprisingly helpful. Ultimately though, the correct tax code and payment is your responsibility, even on PAYE. I'm still not sure where I'm at, I have to figure it all out come April. Thanks mothership.

[mrcharly-YHT]

It's never been an issue in the past, and my salary has fluctuated (due to bonuses) by thousands a month in the past.

Why so screwed up this year?

[ian]

In my experience, once your tax code starts to oscillate it doesn't stop unless you get off PAYE for a year. It could and should be simpler. They currently owe me a tidy sum, but that's courtesy of the mothership changing names and discontinuing my employment in the process. Twice. They're probably trying to tell me something.

[mrcharly-YHT]

Ah, that would make it my fault for starting the newton's cradle clacking; I got married couple's allowance setup, then clacked out of it. Now one of the strings holding a ball up is fraying.

[ian]

It is annoying tbh, I simply pay tax on a salary (base plus commission and a few small adjustments for healthcare, sports club and other taxable perks etc). It's never not going to be higher rate and I only ever get the basic allowance. So I'm not clear why I underpay or overpay seemingly every bloody year. Once you've underpaid, they push it into next year's tax code and thus the process starts.

[zendog]

What you have to understand is the PAYE system works off the tax code which is a forecast of your next years personal allowance less
the money value of next years perks. If nothing changes yoy then they should get your tax right (ish). Any change will result in an over / under payment in that year.

Just ignore it unless the numbers get big.

Oh and PAYE month to month is operated by your employers computers - the revenue work out total year tax retrospectively aand just the once when they have all the actuals. 

     

[contango]

The whole system sucks. When I ran a limited company I had myself on the payroll and had to file a timely return every month through their software. Trying to find out just what I was supposed to do was a headache in itself.

Firstly I got a letter saying I'd missed a reporting deadline, so I called the number and asked what it was they were expecting me to report. When they explained it was a monthly PAYE return I said there was nothing to report because I hadn't paid myself anything that month, and asked if they could send me what I needed to register so I could file reports. They replied a month later with another letter saying I'd missed a reporting deadline. That time they were really kind, having not paid myself the previous month they assumed I'd paid myself that month and they also assumed exactly how much I'd paid myself based on, as it turned out, nothing more than a random number. When I called them they asked if I was calling to make a payment so I asked again just what it was they wanted me to do because I was desperately trying to comply with the rules. Guess what I got a month later....

I must admit when I wound up the company one of the things I was really glad to be rid of was the need to endlessly use their crappy software to explicitly tell them every month that there was no activity to report.

It's just par for the course, if there's a mistake then it's the individual's fault, whoever actually made the mistake. And if you accept in the utmost good faith that HMRC systems have calculated the correct code and tax due and they get it badly wrong, somehow it's still your fault.

[ian]

It doesn't help when your employers keep changing the legal company name and not informing HMRC correctly and then admitting sotte voce some weeks later that 'a few people' (ie every employee in Her Majesty's Glorious Realm) may have noticed they have an incorrect (ie no) tax code.

On the plus side, according to HMRC my income for next year is expected to be £592,000. I envy their optimism. If only Tidy Haired Thought Leadership™ were so remunerative.

This all said, lordy did I hate US tax rituals. I gave up with 1040s and paid a bloke to do it. Some Americans seem to enjoy it. Not Boris though.

[rogerzilla]

PAYE assumes nothing is going to change compared to the previous year so you need to tell HMRC if any BIK items change, as soon as you find out.  Bonuses are a can of worms, especially if they take you into a new tax band.

[Tim Hall]

My old boss, a UK citizen, although born in South Africa, moved from the UK to Norway, but spent little time there. He was paid from a UK company and did consultancy work too. He had his own Norwegian taxman who used him as a teaching example of convoluted tax affairs. I got the impression that in the end it was deemed All Too Difficult by the tax man and quietly ignored.