The disgcraceful tax refund policy of my son's employer.
clonet
Please bear with me - long post.
My son is soon to end the second year of his three year University studies.
For about three years he has had a zero hours part time job and usually
works Sat and Sun and occasional other days ( Uni work permitting ).
That work pattern suited him but it meant his earning were below the tax
allowance threshold and consequently he paid no tax.
All has been OK with his wages till this financial year when he found
himself on emergency code since April. He has no other income.
As a consequence he has been paying tax the last few weeks when none was
really due.
He is in his very early 20's and I explained to him that his employer is
notified by the Inland Revenue re his tax allowances and it's not his
employers fault that he has paid tax.
I suggested he spoke to the wages dept to check that they had not made an
error in the coding they applied just to discount that possibility.
He has not yet had a definitive answer to that and continues to pay tax.
I explained to him yesterday that once the coding error ( employer or HMRC )
was corrected his employer will refund the tax paid in error in his wages.
This is when he mentioned some other people employed there that had been
incorrectly taxed too in the past due to coding errors and were due tax
refunds.
What his employer did on those occasions was to refund their overpaid tax in
their wages but not all at once as should have happened but over ( I think
he said ) a 10 week period in instalments.
( I began to see red, deep red as I thought about it ).
Now his employer is a family owned retail firm specialising in a certain
type of merchandise.
They have just the one outlet but it is VERY BIG and they have always been
known as expensive and attracted mostly affluent customers.
They advertise on TV in our region.
During the recession they have suffered on sales ( probably due to their
mark-up ) and my son's shifts have not been quite as regular of late.
With their tax refund policy they would be subsidising their cashflow at the
expense of my son's tax refund and have done it before with other ( 0 hrs )
employees from what I'm told.
OK - the amount of the tax refund subsidy to them is small - but it's not
small to my son, and as a student, needs every penny WHEN IT'S DUE.
A few thoughts have entered my head since being told of their tax refund
policy.
They are these.
When my son's code is corrected and the refund due, what happens if his
employer goes into receivership during the time they are drip feeding the
refund to my son.
As far as HMRC are concerned the refund has been paid.
He is always looking for better part time employment that suits him, what if
he leaves during the drip feed period.
He has a zero hour contract ( as many at his employer's do ) and if he
creates a fuss he may actually get zero hours.
What would the HMRC think of his employers tax refund policy.
The delay in sorting out his coding led me suggest to him yesterday that he
should ring HMRC to find out why his code has changed.
What should he do regarding the drip feed of his refund when it comes?
Should he mention it in his call to HMRC and seek an alternative refund
method if available.
As a youngster he is not likely to ring HMRC about this without me being
present ( he doesn't live with us ).
I would like to be prepared for any options he may have in his ( with me in
the background ) contact with HMRC particularly in regard to the drip feed
refund from his employer.
Damned cheek, if you ask me, of his employer.
Any suggestions welcome.
Iain
news:z7%Jn.27970$3a4....@newsfe30.ams2...
Here are some information pages:
[General] HMRC Tax code mayhem for 2010/11
http://www.dataplanpayroll.co.uk/payroll-news/hmrc-tax-code-mayhem-201011
[HMRC] Multiple or incorrect Coding Notices: information for employees and
pensioners
http://www.hmrc.gov.uk/incometax/annual-coding-individuals.htm
[HMRC] Emergency tax codes
http://www.hmrc.gov.uk/incometax/emergency-code.htm
[HMRC] What to do if your tax code is wrong
http://www.hmrc.gov.uk/incometax/code-wrong.htm
The HMRC pages give 0845 3000 627 as a contact number.
If you cannot get the correct or satisfactory responses from here, you could
also try the uk.finance newsgroup.
Iain
AlwaysAskingQuestions
> My son is soon to end the second year of his three year University
> studies.
...
> He is in his very early 20's
....
> As a youngster he is ...
lol
Clive George
> When my son's code is corrected and the refund due, what happens if his
> employer goes into receivership during the time they are drip feeding the
> refund to my son.
> As far as HMRC are concerned the refund has been paid.
PAYE doesn't work that way. If the employer hasn't been handing that tax
money over to HMRC, it's a matter between the employer and HMRC, not
your son and HMRC - he's in the clear.
(made up numbers here)
Say he's earning 100 quid/week, and being taxed 20 quid/week initially.
This goes on for 10 weeks, so pay = 1000, tax deducted = 200, net = 800
Then the tax mistake is realised - it should have been 5 quid a week.
Work for 2 weeks, with the 10 week installments of the refund you mention:
Pay 100, deduct 5, refund 15, net 110 quid.
2 weeks in, pay = 1200, tax deducted = 180, net = 1020.
Business goes bust.
Your son has now been paid 1200 quid, and paid tax of 180 quid where he
should have paid tax of 60 quid. When he goes to a new job, or at the
end of the year (or possibly some other time) this gets worked out and a
refund of 120 quid comes to him, which if it's a new job will probably
be spread over the year, and if it's HMRC will be a refund at the end of
the year.
So long term it all works out.
'Fraid that doesn't help you in the short term though...
Hanne
Around 2000 I was in a similar situation: I was at Uni and had a few
hours with them. Every year we had to fill a form stating that that
was our one and only job, to avoid paying taxes where none were due.
One year, this got missed. I did not get a refund from the university
(my employer), but had to claim them back from IR directly. I never
heard of tax refunds coming through the employer, so I can't help with
that.
Kind regards,
Hanne
Peter Crosland
they don't have a code then there is a procedure to deduct tax on a week by
week basis rather than cumulatively. They don't have any discretion in the
matter and so they may not be to blame. When they take on a new employee
they notify HMR&C who should issue a code that should prevent the situation
your son is in occurring. Trying to resolve matters over the phone can be
difficult and lead to delays.
What he should do is contact his local tax office and take his P45 with him.
They should be able to sort matters out.
Peter Crosland
R. Mark Clayton
"clonet" <clo...@home.not> wrote in message
news:z7%Jn.27970$3a4....@newsfe30.ams2...
> Please bear with me - long post.
>
> My son is soon to end the second year of his three year University
> studies.
>
> For about three years he has had a zero hours part time job and usually
> works Sat and Sun and occasional other days ( Uni work permitting ).
> That work pattern suited him but it meant his earning were below the tax
> allowance threshold and consequently he paid no tax.
>
It may well be that his employer SHOULD have had a tax code, but if they
didn't then they have to deduct tax and repay refunds according to the
rules.
What you describe sounds very much like "emergency" week 1, month 1 tax
arrangements and this is devised to get new employees anxious to get their
P45 from their previous employer and their tax status at their new employer
sorted out ASAP.
So don't blame the employer, blame HMRC. If the employer [even
inadvertently] break the rules then they get hammered with grossed up tax,
penalties, interest etc.
The silver lining is that his tax position will sort itself out eventually,
even if he has to do a tax return.
GP Hardy
.....
> He is in his very early 20's and I explained to him that his employer is
> notified by the Inland Revenue re his tax allowances and it's not his
> employers fault that he has paid tax.
More than that - once the gross income is allocated to the employee, it no
longer belongs to the employer. As long as the total deductions for all
employees are finding their way to HMRC, there's not necessarily anything
going wrong. As long as the tax calculations by the employer determined by
the tax code are correct, the employer is in the clear.
Even if the tax code itself is wrong.
Consider the example where your son works for half the tax year on the
emergency tax code. He changes employer, and after a short time, sorts out
his act and gets the correct tax code. Assuming he's paid too much tax, even
the tax paid while he was in his previous job will be refunded through the
current employer. Assuming he's not paid enough tax, even the tax due while
he was in his previous job will be collected through the current employer.
The employer shouldn't care - all the taxes are netted together and sent as
one cheque to HMRC.
I can see two possible scenarios where your son's employer is behaving
dubiously: If the amount on the cheque/bank transfer/cash is different to
the amount on the payslip, or there is a temporary deduction on the payslip
(which has the effect of spreading out the tax refund). In the second case
the employer is basically borrowing money from your son. In both cases, your
first port of call should probably be the Citizen's Advice Bureau armed with
payslips, covering letters and bank statements.
a...@b.invalid
> heard of tax refunds coming through the employer, so I can't help with
> that.
It happens. As an employer we got cheques back from the Inland Revenue
where total refund > total tax bill. It plays havoc with the cash flow
though, because the refund has to be payed with the employees salary but
the cheque doesn't arrive until a month or two later.
Pedt
May 2010, clonet <clo...@home.not>
[snippage]
>All has been OK with his wages till this financial year when he found
>himself on emergency code since April. He has no other income.
>As a consequence he has been paying tax the last few weeks when none was
>really due.
>
>He is in his very early 20's and I explained to him that his employer is
>notified by the Inland Revenue re his tax allowances and it's not his
>employers fault that he has paid tax.
>I suggested he spoke to the wages dept to check that they had not made an
>error in the coding they applied just to discount that possibility.
>
Yep, employer is legally required to implement a tax code notification
received from HMRC so it is probable that a notification was received. I
don't know of any reputable software that would do it automatically at
year end rollover - in fact the opposite would happen, anyone working at
rollover who was previously on w1/m1 would go to normal tax numbers
Did your son work, even for only a day, for someone else last year? This
can trigger being placed on week 1/month 1 coding at the start of the
year. This will be corrected by another tax code notification when all
the companies involved
>
>I explained to him yesterday that once the coding error ( employer or HMRC )
>was corrected his employer will refund the tax paid in error in his wages.
>
>This is when he mentioned some other people employed there that had been
>incorrectly taxed too in the past due to coding errors and were due tax
>refunds.
>
>What his employer did on those occasions was to refund their overpaid tax in
>their wages but not all at once as should have happened but over ( I think
>he said ) a 10 week period in instalments.
Eek! That's illegal.
I'm inclined to think that your son has heard this is what happens on
the grapevine unless he/you have direct evidence of this.
>A few thoughts have entered my head since being told of their tax refund
>policy.
>They are these.
>
>When my son's code is corrected and the refund due, what happens if his
>employer goes into receivership during the time they are drip feeding the
>refund to my son.
>As far as HMRC are concerned the refund has been paid.
>
>He is always looking for better part time employment that suits him, what if
>he leaves during the drip feed period.
OK, in either of these cases he will get the tax refund. If his code has
already been changed to normal tax numbers and it still shows[1] that he
has paid too much tax for his earnings on the P45 that he hands to the
new employer. The remainder of the tax refund
[1] it would have to or the end of year returns would show a discrepancy
if drip feed of refunds happens. Doesn't benefit the company as they
still have monthly payments to make to HMRC and the costs in time to
twiddle a tax code every week for ten weeks would outweigh the benefits
of hanging on to a couple of quid for up to a month.
>
>What would the HMRC think of his employers tax refund policy.
>
Not a lot.
>
>The delay in sorting out his coding led me suggest to him yesterday that he
>should ring HMRC to find out why his code has changed.
Ringing probably won't be a lot of help. What he needs to do is collect
together his P60 for 2009-2010 for his current employer plus any P45s or
payslips from any other employment and trot up to his local HMRC enquiry
office.
>
>What should he do regarding the drip feed of his refund when it comes?
First of all gather together all his payslips from week 1 of the
2010-2011 tax year and add up gross pay and, separately, tax paid.
As you say he's never paid tax previous years then the following should
be enough as a ready reckoner:
Check the new tax code, it'll probably be 647L - the important thing is
that it doesn't have a "X" on the end which signifies week 1/ month 1.
Multiply the code by 10 and add 5 - e.g. 647 becomes 6475.
Divide this by 52 e.g. 6475/52 = 124.52
Now multiply this figure by the number of weeks since the start of the
tax year - e.g. the employer should just have finished week 7.
7 x 124.52 = 871.64
If his gross pay is under this then no tax should be due and he should
have a tax refund equal to the tax already paid.
If he doesn't get all the tax refund then realistically he only has two
choices - raise a grievance (which might not do wonders for getting any
hours) with the employer or call HMRC.
>
>Should he mention it in his call to HMRC and seek an alternative refund
>method if available.
In year refunds are paid through PAYE when the tax code changes unless
you are no longer working and not claiming benefits when you can use the
form P50 available from the HMRC website.
No he shouldn't mention it unless he has proof.
>
>
>As a youngster he is not likely to ring HMRC about this without me being
>present ( he doesn't live with us ).
Not sure I'd describe someone in their 20s as a youngster :)
--
Pedt
tim....
"R. Mark Clayton" <nospam...@btinternet.com> wrote in message
news:JuWdnZXlh-BOkGTW...@bt.com...
I think what the OP is complaining about is the way that the company refunds
this over-deducted tax once the employee has received a corrected code.
(ISTM that it should all be refunded in the next pay packet, but isn't)
Though he has confused the issue with a lot of unjustified grumbling.
tim
tim....
<a...@b.invalid> wrote in message news:ZR8Kn.16933$Qg5....@newsfe06.ams2...
>> (my employer), but had to claim them back from IR directly. I never
>> heard of tax refunds coming through the employer, so I can't help with
>> that.
>
> It happens. As an employer we got cheques back from the Inland Revenue
> where total refund > total tax bill.
But surely that's not going to happen in a company with dozens (hundreds) of
employees. Even if one or two have a negative tax payment in a month the
rest are going be positive with a resultant tax payment TO the revenue for
the month.
> It plays havoc with the cash flow though, because the refund has to be
> payed with the employees salary but the cheque doesn't arrive until a
> month or two later.
Why is there a cheque involved at all? Surely any over payment will be
rectified the next month. It can't be possible that an employer ends up
with an overpayment to the revenue that perpetuates month on month?
tim
R. Mark Clayton
"tim...." <tims_n...@yahoo.co.uk> wrote in message
news:85sqn9...@mid.individual.net...
>
> "R. Mark Clayton" <nospam...@btinternet.com> wrote in message
> news:JuWdnZXlh-BOkGTW...@bt.com...
>>
>> "clonet" <clo...@home.not> wrote in message
>> news:z7%Jn.27970$3a4....@newsfe30.ams2...
>>> Hi Peeps,
>>> Please bear with me - long post.
>>>
>>> My son is soon to end the second year of his three year University
>>> studies.
>>>
>> So don't blame the employer, blame HMRC. If the employer [even
>> inadvertently] break the rules then they get hammered with grossed up
>> tax,
>> penalties, interest etc.
>
> I think what the OP is complaining about is the way that the company
> refunds
> this over-deducted tax once the employee has received a corrected code.
> (ISTM that it should all be refunded in the next pay packet, but isn't)
Typically much of the money will appear in the next pay packet, but what
HMRC will often do is adjust the tax code so that the refund (or any
underpayment so not to be unfair to HMRC) will be smoothed out over the rest
of the year.
>
> Though he has confused the issue with a lot of unjustified grumbling.
about the employer
>
> tim
>
>
>
>
Robin
> be rectified the next month. It can't be possible that an employer
> ends up with an overpayment to the revenue that perpetuates month on
> month?
>
all the employees switch from large amounts of overtime to short hours.
Hence provision was made in PAYE for the employer to be put in funds and
continues today.
--
Robin
PM may be sent to rbw0{at}hotmail{dot}com
Robin
> refunds this over-deducted tax once the employee has received a
> corrected code. (ISTM that it should all be refunded in the next pay
> packet, but isn't)
>
Yes - though I am as yet unsure that the employer is at fault if the son
is and was a student but failed to complete a P38(S).
In the absence of a P38(S) or relevant P45 the employer should have gone
to the P46 procedure. Let's suppose (i) the employer did so, (ii) that
led to the emergency code, and (iii) the emergency code led to tax being
deducted. Note this is tax the employer properly deducted tax under
PAYE
Now the employer can't repay all the tax in one go unless HMRC issue an
NT code. And HMRC can't really do that unless and until they are
satisfied that the son is a full-time student who meets the conditions.
What HMRC are more likely to do, in the absence of any further
communication, is issue a code with the personal allowance - ie the
same numerical code - but to be operated on a cumulative basis. Then,
if the student's earnings fluctuate (as they often do with work mainly
in vacations) tax may well be repaid over a period of weeks or months
during term time as a matter of the normal operation of PAYE. (Crudely,
each week or month another slice of the personal allowance is made
available and generates another slice of repayment).
> Though he has confused the issue with a lot of unjustified grumbling.
>
Well said.
Roland Perry
10:05:07 on Sun, 23 May 2010, Peter Crosland <g6...@yahoo.co.uk>
remarked:
>The employer is legally obliged to apply the tax code HMR&C provide and if
>they don't have a code then there is a procedure to deduct tax on a week by
>week basis rather than cumulatively. They don't have any discretion in the
>matter and so they may not be to blame.
But similarly, when they get the correct tax code through they should
refund the entire amount (of previously overpaid tax) in the next pay
packet. No discretion allowed.
While it's tempting to believe that this could create a cashflow problem
for the employer, this is in fact a red herring. Because they will be
deducting the exact same sum from what they pay the Revenue at the end
of the month. So cashflow effect is zero [except for the unlikely edge
condition that one person's refund puts their entire payroll's tax&NI
into credit that month].
They *are* paying everyone's deducted PAYE/NI to the Revenue at the end
of each month, aren't they??
--
Roland Perry
Pedt
May 2010, Robin <s...@sig.sep>
>> I think what the OP is complaining about is the way that the company
>> refunds this over-deducted tax once the employee has received a
>> corrected code. (ISTM that it should all be refunded in the next pay
>> packet, but isn't)
>>
>
>Yes - though I am as yet unsure that the employer is at fault if the son
>is and was a student but failed to complete a P38(S).
>
>In the absence of a P38(S) or relevant P45 the employer should have gone
>to the P46 procedure. Let's suppose (i) the employer did so, (ii) that
>led to the emergency code, and (iii) the emergency code led to tax being
>deducted. Note this is tax the employer properly deducted tax under
>PAYE
This is not relevant here as the OP's son has been employed for more
than one tax year and was still employed when the tax year changed. The
6th April is a bit of a magical date regarding the implementation of tax
codes. If he was on NT before, he would stay on NT, if he was on a tax
code on week 1/month 1, lets say 647LX, he would change to 647L - normal
tax numbers. Once the year end tax code changes are done then the
employer would implement all the P9 tax code notifications they
received, in order of receipt, that they'd have been getting for the tax
code to be applied as from Week 1 of the 2010-2011 tax year.
I think what has happened is that the employer got a P9 (tax code to be
implemented on 1st week/month pay in new tax year) from HMRC and has
applied it. P38, P45 and P46 are just muddying the waters - the OP's son
needs to find out why that P9 was issued - which is why I asked the OP
if his son had worked for even a day for another employer last year.
Thinking further, it would be useful to know what the tax code is on his
last payslip in March and what was shown on the week 1 payslip for
2010-2011.
>
>Now the employer can't repay all the tax in one go unless HMRC issue an
>NT code.
They can if the situation arises, as it appears to do here, that the OP
OP's son gross pay to date is less than the amount where it can be taxed
when you are on normal tax numbers (i.e. the tax code doesn't end in an
"X"). In that case, he should get all the tax back immediately in the
1st pay packet after the tax code is changed to normal tax numbers.
Clever payroll software would pay him the refund even if he didn't
actually work in the week the code goes from week 1/month 1 to normal
tax numbers. Most is, unfortunately, not that clever.
>And HMRC can't really do that unless and until they are
>satisfied that the son is a full-time student who meets the conditions.
>
>What HMRC are more likely to do, in the absence of any further
>communication, is issue a code with the personal allowance - ie the
>same numerical code - but to be operated on a cumulative basis. Then,
>if the student's earnings fluctuate (as they often do with work mainly
>in vacations) tax may well be repaid over a period of weeks or months
>during term time as a matter of the normal operation of PAYE. (Crudely,
>each week or month another slice of the personal allowance is made
>available and generates another slice of repayment).
I can see what you are getting at but it simply doesn't apply if the
OP's son wasn't earning enough to pay tax in the first place on a normal
tax numbers tax code for this tax year, never mind an NT code.
I think we need to OP to come back to answer a couple of questions:
1. What was his son's tax code on his last payslip for 2009-2010
2. What is his son's tax code on his first payslip for 2010-2011
3. Did his son work, for even 1 paid hour for another employer 09-10
I'll add another one that may be relevant
4. What was the gross pay and tax taken on the payslip in (2)
IANAL but I've worked payroll for 2 years, including K,T,Y,P with or
without an "X" Prefix/suffix and BR/D0/NT codes and spent two years as
Tech Manager on contract when it was the Inland Revenge so I do know
something about it.
--
Pedt
tim....
>
> "tim...." <tims_n...@yahoo.co.uk> wrote in message
> news:85sqn9...@mid.individual.net...
>>
>> "R. Mark Clayton" <nospam...@btinternet.com> wrote in message
>> news:JuWdnZXlh-BOkGTW...@bt.com...
>>>
>>> "clonet" <clo...@home.not> wrote in message
>>> news:z7%Jn.27970$3a4....@newsfe30.ams2...
>>>> Hi Peeps,
>>>> Please bear with me - long post.
>>>>
>>>> My son is soon to end the second year of his three year University
>>>> studies.
>>>>
> SNIP
>>> So don't blame the employer, blame HMRC. If the employer [even
>>> inadvertently] break the rules then they get hammered with grossed up
>>> tax,
>>> penalties, interest etc.
>>
>> I think what the OP is complaining about is the way that the company
>> refunds
>> this over-deducted tax once the employee has received a corrected code.
>> (ISTM that it should all be refunded in the next pay packet, but isn't)
>
> Typically much of the money will appear in the next pay packet, but what
*should* be in the next pay packet. The OP said that the employer in
question doesn't do this.
> HMRC will often do is adjust the tax code so that the refund (or any
> underpayment so not to be unfair to HMRC) will be smoothed out over the
> rest
> of the year.
Why is there a need to be "fair" to HMRC. If the OP expects to pay zero tax
by the end of the year and because of a "week 1" coding actually did have
tax deducted, then once he is on the correct code he should get it all back
ASAP. (Though this can't happen at the start of the tax year, which is
where we are now, so probably isn't the OP's position).
>> Though he has confused the issue with a lot of unjustified grumbling.
>
> about the employer
some general grumbling about the system working as intended.
tim
clonet
"clonet" <clo...@home.not> wrote in message
news:z7%Jn.27970$3a4....@newsfe30.ams2...
> Hi Peeps,
> Please bear with me - long post.
>
> My son is soon to end the second year of his three year University
> studies.
>
> For about three years he has had a zero hours part time job and usually
> works Sat and Sun and occasional other days ( Uni work permitting ).
> That work pattern suited him but it meant his earning were below the tax
> allowance threshold and consequently he paid no tax.
>
> All has been OK with his wages till this financial year when he found
> himself on emergency code since April. He has no other income.
> As a consequence he has been paying tax the last few weeks when none was
> really due.
>
> He is in his very early 20's and I explained to him that his employer is
> notified by the Inland Revenue re his tax allowances and it's not his
> employers fault that he has paid tax.
> I suggested he spoke to the wages dept to check that they had not made an
> error in the coding they applied just to discount that possibility.
>
>>>SNIP<<<
>
> As a youngster he is not likely to ring HMRC about this without me being
> present ( he doesn't live with us ).
>
> I would like to be prepared for any options he may have in his ( with me
> in
> the background ) contact with HMRC particularly in regard to the drip feed
> refund from his employer.
>
> Damned cheek, if you ask me, of his employer.
>
> Any suggestions welcome.
>
Wow - quite a lot to take in here and I just got home from work - thanks for
the info.
BTW by youngster I was referring to little experience of working life and
tax matters - perhaps a different term would have been better.
RE:
I think we need to OP to come back to answer a couple of questions:
1. What was his son's tax code on his last payslip for 2009-2010
2. What is his son's tax code on his first payslip for 2010-2011
3. Did his son work, for even 1 paid hour for another employer 09-10
I'll add another one that may be relevant
4. What was the gross pay and tax taken on the payslip in (2)
As my son doesn't live at home I will need to get info from him re Q's 1,2 &
4.
As for Q3 he has worked for no other employer during the time with his
current employer.
My gripe is not that he has paid the tax when not really due - I know in
normal circumstances it would be refunded ( in one payment ) once the
correct code is notified.
I do understand that the employer has to implement the code they have been
told by HMRC.
My gripe is the refund policy if indeed that is what happens.
I will quiz him more about that.
Thanks again
Robin
> than one tax year and was still employed when the tax year changed.
> The 6th April is a bit of a magical date regarding the implementation
> of tax codes. If he was on NT before, he would stay on NT, if he was
> on a tax code on week 1/month 1, lets say 647LX, he would change to
> 647L - normal tax numbers. Once the year end tax code changes are
> done then the employer would implement all the P9 tax code
> notifications they received, in order of receipt, that they'd have
> been getting for the tax code to be applied as from Week 1 of the
> 2010-2011 tax year.
Do you possibly have in mind the the P9X here as well as the P9s? But
either way, what happens under that at the year end still depends on
what the son and his employer did by means of P38(S), P45 and P46.
> I think what has happened is that the employer got a P9 (tax code to
> be implemented on 1st week/month pay in new tax year) from HMRC and
> has applied it. P38, P45 and P46 are just muddying the waters
I think we had best agree to disagree on the relevance of the P45, P546
and P38(S). I'd find it hard to say if what has been done was done
properly without knowing the position; and more importantly in getting
HMRC to sort it for the future.
> OP's son needs to find out why that P9 was issued - which is why I
> asked the OP if his son had worked for even a day for another
> employer last year. Thinking further, it would be useful to know what
> the tax code is on his last payslip in March and what was shown on
> the week 1 payslip for 2010-2011.
If you think HMRC did issue a new code to then surely it would be easier
to suggest the OP ask the son if the son received a notice of coding
from HMRC?
> I think we need to OP to come back to answer a couple of questions:
> 1. What was his son's tax code on his last payslip for 2009-2010
> 2. What is his son's tax code on his first payslip for 2010-2011
> 3. Did his son work, for even 1 paid hour for another employer 09-10
That would certainly help - if only to see if there are any codes at all
;)
>
> IANAL but I've worked payroll for 2 years, including K,T,Y,P with or
> without an "X" Prefix/suffix and BR/D0/NT codes and spent two years as
> Tech Manager on contract when it was the Inland Revenge so I do know
> something about it.
Perhaps that explains our different approaches? I merely worked for
IR/HMRC for 30 years (bar a few off in the central departments), the
best part of 2 of them on PAYE :(
Pedt
May 2010, Robin <s...@sig.sep>
>> This is not relevant here as the OP's son has been employed for more
>> than one tax year and was still employed when the tax year changed.
>> The 6th April is a bit of a magical date regarding the implementation
>> of tax codes. If he was on NT before, he would stay on NT, if he was
>> on a tax code on week 1/month 1, lets say 647LX, he would change to
>> 647L - normal tax numbers. Once the year end tax code changes are
>> done then the employer would implement all the P9 tax code
>> notifications they received, in order of receipt, that they'd have
>> been getting for the tax code to be applied as from Week 1 of the
>> 2010-2011 tax year.
>
>Do you possibly have in mind the the P9X here as well as the P9s?
Yes. But P9X would be superseded by a P9 (or multiple ones).
>But
>either way, what happens under that at the year end still depends on
>what the son and his employer did by means of P38(S), P45 and P46.
Not sure I can see what you are getting at here. I can't see a way to go
NT or 647L to 647LX over the tax tear rollover without a P9 or, if in
year, a P6 or P6B.
>
>> I think what has happened is that the employer got a P9 (tax code to
>> be implemented on 1st week/month pay in new tax year) from HMRC and
>> has applied it. P38, P45 and P46 are just muddying the waters
>
>I think we had best agree to disagree on the relevance of the P45, P546
>and P38(S).
I think we will have to.
I can't see any mechanism for a P38, P45 or P46 from one tax year
translating into a week 1/month 1 code in the following tax year via
P9X. Quite happy to be corrected if you can show the route.
>> OP's son needs to find out why that P9 was issued - which is why I
>> asked the OP if his son had worked for even a day for another
>> employer last year. Thinking further, it would be useful to know what
>> the tax code is on his last payslip in March and what was shown on
>> the week 1 payslip for 2010-2011.
>
>If you think HMRC did issue a new code to then surely it would be easier
>to suggest the OP ask the son if the son received a notice of coding
>from HMRC?
IME in payroll P9 changes usually came as a shock and P6 or P6B prompted
phone calls so I'm not confident that the OP's son got notified he would
be on a week 1/month 1 basis from week 1 2010/2011.
>
>> I think we need to OP to come back to answer a couple of questions:
>> 1. What was his son's tax code on his last payslip for 2009-2010
>> 2. What is his son's tax code on his first payslip for 2010-2011
>> 3. Did his son work, for even 1 paid hour for another employer 09-10
>
>That would certainly help - if only to see if there are any codes at all
>;)
Agreed. Would help a lot to see a couple of payslips.
>>
>> IANAL but I've worked payroll for 2 years, including K,T,Y,P with or
>> without an "X" Prefix/suffix and BR/D0/NT codes and spent two years as
>> Tech Manager on contract when it was the Inland Revenge so I do know
>> something about it.
>
>Perhaps that explains our different approaches?
Possibly. It would help if you could explain how the P9X can put someone
on a week 1/month 1 tax code...
>I merely worked for
>IR/HMRC for 30 years (bar a few off in the central departments), the
>best part of 2 of them on PAYE :(
Is this where I offer my commiserations :)
I was TC but seemed to spend more than my fair share of time with PAYE,
SA, RIAT and NIAT with the odd dose of replying to SCO.
--
Pedt
Robin
> Not sure I can see what you are getting at here. I can't see a way to
> go NT or 647L to 647LX over the tax tear rollover without a P9 or, if
> in year, a P6 or P6B.
<snip>
> I can't see any mechanism for a P38, P45 or P46 from one tax year
> translating into a week 1/month 1 code in the following tax year via
> P9X. Quite happy to be corrected if you can show the route.
One example: the employer gets the student to complete a P38(S) for
2009-2010. As a result the employer does not deduct tax in 2009-2010.
As the start of the new tax year approaches the employer decides not to
continue use the P38(S) procedure at all (eg because it's just too much
bother). The student will then start 2010-2011 with an emergency code
(subject of course to how he answers the questions on the P46).
Another example, a variation on that, is that the employer realises at
the end of 2009-2010 that the student does not meet the test for a
P38(S) ("works for you solely during a holiday").
A different route entirely is of course that the student was laid off in
2009-2010 and then re-employed, on which he handed in an old P45.
(None involve the P9X but I only mentioned that form because, as you
will know, it is the bit of "magic" which tells employers to change
codes from non-cumulative to cumulative at the start of the new tax
year - subject as you said to any Form P9(T) giving a new code).
In all of this, my main concern was to flag that it seemed to me the
employer might not be behaving disgracefully; and indeed have done
anything wrong at all.
steve robinson
Been through these issues with employees myself in the past , what
the op needs to understand is the employer can only operate the
taxation of her sons salary in accordance with any notifications HMRC
supply .
The Inland Revenue are not always clear when you contact them over
PAYE , they often make statements like it will be refunded by your
employer or it will be paid in your wages , when they should say we
will inform your employer of any changes and if any refund is due we
will notify them to make adjustments from xxxxxxx date
clonet
"clonet" <clo...@home.not> wrote in message
news:z7%Jn.27970$3a4....@newsfe30.ams2...
> Please bear with me - long post.
>
> My son is soon to end the second year of his three year University
> studies.
>
> For about three years he has had a zero hours part time job and usually
> works Sat and Sun and occasional other days ( Uni work permitting ).
> That work pattern suited him but it meant his earning were below the tax
> allowance threshold and consequently he paid no tax.
>
> All has been OK with his wages till this financial year when he found
> himself on emergency code since April. He has no other income.
> As a consequence he has been paying tax the last few weeks when none was
>>>SNIP<<<
>
>
> As a youngster he is not likely to ring HMRC about this without me being
> present ( he doesn't live with us ).
>
> I would like to be prepared for any options he may have in his ( with me
> in
> the background ) contact with HMRC particularly in regard to the drip feed
> refund from his employer.
>
> Damned cheek, if you ask me, of his employer.
>
> Any suggestions welcome.
>
>
Thanks for the replies.
My son came to our house yesterday and brought last payslip from last tax
year and first payslip from this tax year as I requested.
Codes were 647L last year (and he paid no tax in the year) and BR first week
this year. Also BR subsequent weeks.
We popped down to the local Tax Enquiry Office and he was asked whether he
had a second job ( NO ).
The assistant said it was obviously wrong and we were allowed to use their
phone to ring the main local region office.
He answered their questions and was told his code will be amended
accordingly.
I expect it will take a week or two to filter through to his employers
payroll system.
We'll see what happens then regarding the refund and whether it is paid to
him in instalments.
Thanks again.
steve robinson
How its paid is down to the inland revenue not the employer
Three things may happen
1) they adjust his tax code and spread the refund over the current
tax year
2) they adjust the tax code (usally removeing x) and he gets a refund
in one go
3) they adjust hs tax code and refund him directly (usally done when
the refund is very large )
Humbug
Month? I'm still waiting for a refund after two years.
I've paid the employee back, but HMRC still owe me money.
--
Humbug
Peter Crosland
It should be refunded in full on the first pay day. Remember that it may
take a couple of weeks for HMR&C to issue the new coding and probably
another two weeks for it to get actioned by the employer.
Peter Crosland
Pedt
May 2010, clonet <clo...@home.not>
>
>
>Thanks for the replies.
>My son came to our house yesterday and brought last payslip from last tax
>year and first payslip from this tax year as I requested.
>
>Codes were 647L last year (and he paid no tax in the year) and BR first week
>this year. Also BR subsequent weeks.
>We popped down to the local Tax Enquiry Office and he was asked whether he
>had a second job ( NO ).
>The assistant said it was obviously wrong and we were allowed to use their
>phone to ring the main local region office.
>He answered their questions and was told his code will be amended
>accordingly.
Good result.
>
>I expect it will take a week or two to filter through to his employers
>payroll system.
Could take a couple of weeks for the tax office to issue the code change
- and a couple of weeks thereafter for the employer to implement it.
Your son should get a notice of in-year coding change through the post
as well. This usually goes out before the employer notice is sent.
>
>We'll see what happens then regarding the refund and whether it is paid to
>him in instalments.
>
This scenario should go from BR to 647L and in which case he would get
all of his refund in one go[1]. It's very unlikely that HMRC will
twiddle (technical term) the L code to pay him the tax back over the
rest of the year.
What your son needs to do is to keep checking his payslip for when that
BR coding changes to a code ending in L then compare the tax refund
against tax already paid[1] AND compare the employers code on the
payslip against the one on the coding notice he gets.
Please let us know how you get on and, if you have questions when the
code is changed, then come back.
[1] One quick caveat, he might not get 100% refund - it'll depend on how
much he's been paid to date by that payslip. If it's over the allowance
so far accrued on an L code, there might be a tiny amount of tax to pay.
I don't think it'll happen here but best you are aware.
--
Pedt
steve robinson
Thats not always the case Peter , if he is issued a new codeing any
refund could be spread over the tax period
If he is on emergency codeing then its likely that he will recieve a
refund as you discribe , if the refund covers several tax years then
if its a realatively small amount they may alter the figures in his
tax code , if its a larger amount they will send a check directly to
the ops son and possibly not adjust the figures in the tax code just
remove the x
If the tax is over several years then he will also be entitled to
interest on the outstanding amount although he might have to write in
and request it
clonet
"Pedt" <pe...@user-unknown.mx2.org.uk> wrote in message
news:LJqnlqjL...@fishcake.eternal-september.org...
Thanks for that Pedt.
I'll post again once his code has been changed by his employer and let him
know it could be a month before he sees the money.
..