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Tax deduction from your salary

lawrenma2lawrenma2 Posts: 4,060
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My OH has recently started a new job, and has been there a full month. Yesterday she told me she got her pay slip and told me the bottom line figure. I said that she has been paid too much, compared to her annual salary and something was wrong.

I looked at her payslip and her employer deducted the correct amount of N.I, but looks live they haven't deducted enough tax (it was out by about £200 in her favour).

So my OH thinks it's her responsibility to inform her employer, in case they ask her for it back, or worse still, HMRC ask for it back at the end of the tax year.

My view is that it's their fault, she shouldn't say anything and raise it if it happens again next month so they don't ask for thousands at a later stage.

Does anyone have knowledge of this, i.e, who is liable, is it worth raising now, etc?

Thanks

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    StigStig Posts: 12,446
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    I'd raise the problem with the employer.

    However, it's not worth worrying about too much as PAYE corrects itself over the tax year if you have over/under paid.
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    lawrenma2lawrenma2 Posts: 4,060
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    Thanks, Stig - Appreciate your help.
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    DazerUKDazerUK Posts: 1,362
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    Was she working before the new job?

    The tax system works on financial years. If she wasn't working until this job, then she will have 3 months of no income. Perhaps they have taken this into account.
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    [Deleted User][Deleted User] Posts: 31
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    Did your OH have a P45 from a previous employer?
    PAYE is usually cumulative and if there are no figures (gross pay/PAYE) to carry forward from a P45 and you start work part way through the tax year then you may have a refund or pay alot less PAYE on your first payslip.
    The next month you should be paying the correct amount of tax.
    As Stig says PAYE usually corrects itself over the tax year but I would double check with her employer that the payslip is correct.
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    [Deleted User][Deleted User] Posts: 32,379
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    You can use this tax calculator to find out how much she should pay per month. As others have written if she hasn't worked yet this tax year (from April) her tax this month will be lower.

    Tax Calculator
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    DANCE OF DEATHDANCE OF DEATH Posts: 4,781
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    It happened to me when I left the company I was working for as it was going bankrupt and started a new job. When it come to my tax year I got a letter off the Inland Revenue then that I was sort on my tax by £2000 and they wanted it back.

    I telephoned the Inland Revenue and gave them the details of my P60s' and they confirmed it that my tax for that year was short and as the company that I left went bankrupt I would have to pay it by taking an extra £50.00 per week in extra tax. At the time I was making £160.00 per week and after tax my wife,two kids and me were living on just under £100.00 a week.

    I tried to sue the company as I knew where the boss lived, but she didn't give a toss, when I took it to court it ruled in my favour and she still didn't pay up and still waiting for the money, just that she has moved now and no-one knows where she moved to.
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    lawrenma2lawrenma2 Posts: 4,060
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    DazerUK wrote: »
    Was she working before the new job?

    The tax system works on financial years. If she wasn't working until this job, then she will have 3 months of no income. Perhaps they have taken this into account.
    jingles436 wrote: »
    Did your OH have a P45 from a previous employer?
    PAYE is usually cumulative and if there are no figures (gross pay/PAYE) to carry forward from a P45 and you start work part way through the tax year then you may have a refund or pay alot less PAYE on your first payslip.
    The next month you should be paying the correct amount of tax

    That would make sense then. She got made redundant in March, and this is her first job since then (she started in June).

    Thanks guys.
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    Flyboy152Flyboy152 Posts: 14,656
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    You may not want to, but it would help if we could have some specifics. Tax code and basic salary would help.
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    Charlie_the_catCharlie_the_cat Posts: 1,089
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    Flyboy152 wrote: »
    You may not want to, but it would help if we could have some specifics. Tax code and basic salary would help.
    Er...why? The answer already given is obviously the reason.
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    Smokeychan1Smokeychan1 Posts: 12,205
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    lawrenma2 wrote: »
    That would make sense then. She got made redundant in March, and this is her first job since then (she started in June).

    Thanks guys.

    Oh well she has 3 months of allowance to take into consideration. She will be back to paying full whack next month :D
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    Flyboy152Flyboy152 Posts: 14,656
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    Oh well she has 3 months of allowance to take into consideration. She will be back to paying full whack next month :D

    That very much depends on her tax coding. It is also entirely possible that she was entitled a to a tax rebate for the last month of the year.
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    Flyboy152Flyboy152 Posts: 14,656
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    Er...why? The answer already given is obviously the reason.

    Well, we don't know, do we. It not possible to make that assumption without knowing certain facts.
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    Keefy-boyKeefy-boy Posts: 13,613
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    Flyboy152 wrote: »
    That very much depends on her tax coding. It is also entirely possible that she was entitled a to a tax rebate for the last month of the year.
    You sure about that? I've seen plenty of times where underpaid tax from a previous tax year is reclaimed by an adjustment to the tax code, never seen a rebate given that way.
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    butterworthbutterworth Posts: 17,877
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    If she has a tax code, and the company operates a PAYE system, then her pay packet is probably right. It'll all come out in the wash eventually...
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    DaisyBumblerootDaisyBumbleroot Posts: 24,763
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    my advice is never mess with inland revenue. anything else, she may be able to get away with "it was your fault" but if she leaves it to the end of the year, the Inland Revenue WILL know and WILL take it back - abeit probably through a higher tax code but if she is £200 up this month and every month after, then when they find out and adjust her code,she may be out by £400 a month the following year as they claw it all back (if thats how it works, that is)
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    gemma-the-huskygemma-the-husky Posts: 18,116
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    i expect it isnt an error

    especially if its an automated payroll

    its probably just to do the vagaries of tax codes/ new starter rules etc etc
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    Flyboy152Flyboy152 Posts: 14,656
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    Keefy-boy wrote: »
    You sure about that? I've seen plenty of times where underpaid tax from a previous tax year is reclaimed by an adjustment to the tax code, never seen a rebate given that way.

    I presume you mean overpaid tax. If it was underpaid, the tax office would be taking off of you.

    It happens more often than you think. Rebates are given via payroll as well as independently. The tax office either provides a temporary coding, or sends a request direct to the payroll provider. It doesn't happen to all employers, only those who have a certain number of employees.
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    digimon900digimon900 Posts: 4,249
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    I was surprised by HMRC myself.
    I left the UK in 2008. In April 2009 the IRS (American tax authorities) requested paperwork from HMRC to verify my tax status in the UK in 2008/2009 year.
    I called so many departments but no one knew what it was I needed. Eventually I was told to call tax credits. I was shocked when they told me that they had been trying to contact me as a cheque they had issued had been returned.
    I seems that an employer I had went through a tax credits application with me when I complained about my wages! I was sent a cheque for #2,000. The IRS were happy to receive the tax credits breakdown that came with the cheque. My total earnings from that employer before I left the UK were #1,400. HMRC refunded #300 of tax deductions via the IRS later on and I received an IRS cheque in $'s...
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    Flyboy152Flyboy152 Posts: 14,656
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    I think you may be confused between the terms "tax credits" and "tax rebate." Tax credits are something very different to rebates.
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    CruachanCruachan Posts: 7,211
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    Flyboy152 wrote: »
    I presume you mean overpaid tax. If it was underpaid, the tax office would be taking off of you.

    It happens more often than you think. Rebates are given via payroll as well as independently. The tax office either provides a temporary coding, or sends a request direct to the payroll provider. It doesn't happen to all employers, only those who have a certain number of employees.

    I think your interpretation of Keefy-boy's post is wrong.

    I believe that he is pointing out that HMRC can reclaim a previous year's underpayment through the current year's coding.

    In terms of a repayment for a previous year being due, I am not aware of any mechanism for it to be refunded via PAYE in the current year. I'm interested to know more.
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    Keefy-boyKeefy-boy Posts: 13,613
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    Cruachan wrote: »
    I think your interpretation of Keefy-boy's post is wrong.

    I believe that he is pointing out that HMRC can reclaim a previous year's underpayment through the current year's coding.

    In terms of a repayment for a previous year being due, I am not aware of any mechanism for it to be refunded via PAYE in the current year. I'm interested to know more.
    Indeed!
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    Flyboy152Flyboy152 Posts: 14,656
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    Cruachan wrote: »
    I think your interpretation of Keefy-boy's post is wrong.

    I believe that he is pointing out that HMRC can reclaim a previous year's underpayment through the current year's coding.

    In terms of a repayment for a previous year being due, I am not aware of any mechanism for it to be refunded via PAYE in the current year. I'm interested to know more.

    Yes, it appears I did. I must remember to read these sorts of things twice. :o

    If there was an overpayment from a an incomplete year, HMRC have the option to repay that via PAYE or separately by cheque or transfer. If, for example, they have taken too much tax from an employee on the basis that the will be working for a full year, that will leave an overpayment. If the employer has more than a certain number of employees, they will forward tax codings on a regular and irregular format. So, they can change the codes of all PAYE employees each month. This used to happen a lot more than it does today. This can be done on net payment basis or the employer can decide to not participate in the process. But they must decide to do this when registering with the tax office who will be designated to handle their account. I believe this is how it happens, I will need to check with my accounts manager to be absolutely sure. I do not employ enough people to have the option of participating in this scheme.
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    El GuapoEl Guapo Posts: 4,838
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    Should be ok but worth checking. I did not pay any tax for my first 3 months as I had not earn't enough in the previous year. It was great while it lasted! :D
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    [Deleted User][Deleted User] Posts: 32,379
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    El Guapo wrote: »
    Should be ok but worth checking. I did not pay any tax for my first 3 months as I had not earn't enough in the previous year. It was great while it lasted! :D


    Which is why I gave a link to the tax calculator, it's easy to check:)
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