HMRC screwing me over, again

Freakbro said:
This is what I say to my S/E clients every year....but every year they still keep giving me their books about a week before Xmas :p

Makes my January a bit of a nightmare :(
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Thats loads of time i dropped mine off on the 14th Jan.. I suspect I may see an increase to this years accountants bill:D

he actually said that soo many people leave it to the last minute that it takes longer to file online as the system at HMRC slows right down when processing.
 
squarehead94 said:
thanks, i didnt know they were open till late monday to friday - ill ring them monday.
still, why would they sort my problem then reverse it?
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"They" didn't. It's a very large organisation, so it's inefficient and run by people who don't understand all of it in any great detail. It slops a generic approach onto every case because that's the cheapest way to do things and thus generates more money and status for the people at the top of the pyramid. It mostly works most of the time and they can employ as few people as possible on as little money as possible to deal with the problems caused by the bureaucratic system.

The system didn't work properly for you. A person could sort out the mistake the system had made with your tax, but they couldn't change the system. So when you passed through the system again you got the same problem. Nobody reversed the fix that the person you saw made. The system - bureaucratic, oblivious and barely controlled - just steamrollered over the fix that the person you saw put in place.

The best thing you can do is the same as you did before to get the fix applied again and then ask them to split your personal tax allowance between your two jobs. That simplifies taxing you and will hopefully make your case fit what the system can handle properly.
 
demonix said:
The original error was that they were taxing your pay incorrectly, but the current change in tax code is correct since the BR tax code is for those who have two jobs so you now have to pay 20% tax on your pay regardless of earnings (from my experience) and I don't think there's nothing you can do to have it changed back since their records will show that your working two jobs and not one.
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That's not true. BR is essentially a default position. It is not for people who have two jobs. It's for people who don't have another tax code.

The personal tax allowance is personal - it applies to a person and not to a job. On paper, it doesn't matter how many jobs a person has - income tax should be based on the total income.

The problem is that the system is imperfect at handling multiple sources of taxable income. I get the impression that handling more than one per person was functionality added afterwards rather than designed into the system.

So you quite often get this scenario happening:

Person A has two taxable incomes, one of £5K and one of £3K.

Their personal tax allowance is £8105, so they shouldn't be paying any tax. The system is automated and therefore entirely mindless. It has no idea what tax A should be paying - it just churns numbers.

The system looks at an income registered as A's, which could be either one. Let's say it's the £5K one. £5K < £8105, so no tax.

The system looks at an income registered as A's. A's personal tax allowance has already been applied, so the system falls back to the default on this income - basic rate. A gets taxed BR on the £3K.

You can also get what's essentially an error message for when the automated system can't process what the tax should be - the default position is applied, i.e. basic rate on everything.

Either issue can be fixed by a person at the tax office, who can think rather than just follow programming to churn numbers.
 
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To be fair, your employer is meant to give HMRC the info they need to determine your tax code for the year. They're not psychic are they?
 
Well RTI from April theoretically should help the HMRC with more up to date info, but I've got a bad feeling it's going to be chaos for a while :p

It'll be fine for bigger companies with payroll depts sorting it all out, but I'm just imagining all those small employers who do their own payroll and getting them to do the submissions on time every month (or week)
 
Angilion said:
That's not true. BR is essentially a default position. It is not for people who have two jobs. It's for people who don't have another tax code.
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http://www.hmrc.gov.uk/incometax/codes-basics.htm

BR is the first listed in the other tax codes section and it states the following for the reason it's used.

Is used when all your income is taxed at the basic rate - currently 20 per cent (most commonly used for a second job or pension)

The OP has two jobs and as such has to pay tax at the 20% rate.

As I said when my tax code was incorrectly changed, HMRC had misleading information on their system making them believe that I had two sources of income (they had my JSA claim at the time and an old new deal term listed as active at the same time leading to my tax code being changed when it shouldn't have been).
 
demonix said:
The OP has two jobs and as such has to pay tax at the 20% rate.
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That's not strictly correct in the OP's case, as the combined income of the 2 jobs is still less than the personal allowance.

The default position is that his full personal allowance would go against 1 job, then he would pay BR on the other and then claim it all back at the end of the tax year. But it would make things easier for himself if he just split his tax code between the two jobs, so he had enough allowance to cover both, then he would pay no tax during the year on either job.

The assumption that you pay 20% on your second job is because it is assumed you are earning more than your allowance in your first job.
 
demonix said:
http://www.hmrc.gov.uk/incometax/codes-basics.htm

BR is the first listed in the other tax codes section and it states the following for the reason it's used.

Is used when all your income is taxed at the basic rate - currently 20 per cent (most commonly used for a second job or pension)

The OP has two jobs and as such has to pay tax at the 20% rate.
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No, he doesn't. "most commonly used" does not mean "always applies in all circumstances regardless of what the law says".

As I said before, the income tax system is set up with the assumption of a single source of income. By default, your personal tax allowance is applied to one income only. That is usually fine, but not always.

The OP is one person. So the OP has one personal tax allowance. It does not matter if they have one income, two incomes or a hundred incomes. They have one personal tax allowance. Because they're one person. Their total income is less than their personal tax allowance, so they are not liable for income tax. At all. They are being taxed solely because the system is not set up to correctly deal with one person having more than one income. They can fix the problem by contacting HMRC and having their personal tax allowance split between the two jobs.

OP, default position 1:

Filled out a P45 for the council job and a P46 for the Wetherspoons job.

Personal tax allowance is assigned to the council job.

OP is taxed at BR on the Wetherspoons job.

OP, default position 2:

Filled out a P45 for the Wetherspoons job and a P46 for the council job.

Personal tax allowance is assigned to the Wetherspoons job.

OP is taxed at BR on the council job.

OP, default position 3:

Forms not correctly used or lost in the system..basically anything other than correct P45/6 usage.

Tax system reverts to default and the OP is taxed at BR for everything.

OP fixes the problem temporarily:

OP contacts HMRC and says he's paying too much tax. They check, find that he is and give him a rebate. Works fine until the next tax year.

OP fixes he problem permanently:

OP contacts HMRC and asks them to split his personal tax allowance, with £2500 assigned to the Wetherspoons job and the remainder to the council job.

OP pays no income tax, correctly so because his total taxable income is less than his personal tax allowance.
 
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That last post is fantastic. I'm in position 2 I think. I was being taxed at spoons when I had 1 job but sorted it out after starting at the council. I think its sorted I've set up 2500 for spoons and the rest for council. Hopefully they won't **** up.
 
HMRC a right bunch of clowns, I had 8 differing tax codes over the space of 5 months ranging from minus ones to nearly 10000. None of them were correct. It was the 45 mins each time on hold went you call them that really annoyed me.
 
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