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bigduckontax
bigduckontax, Accountant
Category: Tax
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I have 2 assignments with the same employer and receive separate

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I have 2 assignments with the same employer and receive separate pay slips. When I took the second job it has taken me into the higher tax band and I assumed my pay provider would calculate my tax accordingly but they didn't and I have a £1600 underpayment. Today I have received my new tax codes which are K449 and BR. This is going to affect my pay greatly, the tax office said it was upto me to tell them of the changes but I feel my employer has some responsibility. What can I do?
Hello, I'm Keith and happy to help you with your question.

I regret to have to tell you that the tax office was correct. You are responsible for ensuring that firstly the code issued by HMRC is correct and secondly that that code is actually being operated by the employer through your PAYE. The employer can only operate codes as notified to them by HMRC although if you have a later one issued which they have not received, a not unknown occurrence, you can pass it to your employer who may operate it on a Month One Basis.

There is light at the end of your tunnel, however. Your underpayment is under GBP 3000 so HMRC should automatically collect it by means of a code number adjustment in subsequent years. Here is their advice on the subject although the dates are a trifle old you should get the gist:

'If you owe less than £3,000 HMRC normally includes the underpayment in your tax code for the next tax year. You'll find the amount under 'Reduction to collect underpaid tax' on your PAYE Coding Notice.

You'll pay the amount back in equal installments - usually over one year along with your normal tax deductions from your pay or pension. For example, if you didn't pay enough tax in the tax year 2011-12, you'll pay back the amount you owe in the tax year 2013-14, which starts on 6 April 2013.

You'll get your new tax code early in 2013. In the meantime you don't need to do anything more.'

However, I would watch them like a hawk and ensure that the appropriate recovery has been put in train through the tax code. If it has not then challenge the code when you receive it for the next tax year. At least you don't have to find a lump sum to settle your liabilities.

I can see from your tax codes that one will tax 100% of the wages at basic rate whilst the other would appear to be collecting back taxes.
As far as it goes this is normal procedure. I accept that your take home pay will be down as the recovery continues, but the alternative is to settle with a GBP 1600 payment. I regret that the ball is in your court and there is little one could do about it.

I am sorry to have to rain on your parade, but the weather is bad these days. They tell me it is global warming!
Customer: replied 4 years ago.
Thank you for your help. Am I allowed to ask it to be recovered over a longer period or would that complicate things?

You could ask, pleading financial hardship. They can only say no and it would cost you but a 50p stamp to ask. I don't necessarily think you will be successful though. HMRC are sure to take the line that you have had the money and should repay it promptly.

bigduckontax and other Tax Specialists are ready to help you
Thank you for your support.