How does HMRC continue operating like this?

EvilRob · 24 Jul 2020 at 01:31

Answer: "because they can", I suppose

I received my payslip today and it is missing a significant portion of my take home pay.
HMRC has changed my tax code from 1128L (£11,280 per year tax free) to K498X (-£4980 tax free) without bothering to notify me.
I got a bonus and it seems like they assumed I'd be earning that amount every month going forward??

I updated my tax account online with my actual expected earnings and now my code is 803T (£8030 tax free).

Where has the (£11,280-£8030)=£3250 gone? I have no clue.

I feel like I need to hire an accountant just to explain my PAYE tax, as there is no explanation from HMRC to go along with it. Just me or ridiculous?

EvilRob · 24 Jul 2020 at 19:00

vanandjuanunited said:
Is that not normal?
You've received a company benefit hence the K code so the next month it should adjust itself again

I don't think it's normal. I didn't receive a benefit, I got a bonus that I paid tax on. The bonus doesn't take me into a new tax band for the year so my tax code shouldn't have changed.

EvilRob · 24 Jul 2020 at 19:12

silversurfer said:
Count yourself lucky, Ive had the emergency tax code of no allowance. Not for any good reason just the wages dept didnt want any liability. Same dept used the wrong NI tax code for months, that one really doesnt reverse afaik. Sounds like they believe you owe them money from the previous year but as said its often unexplained.

No allowance is better than the code they assigned me

EvilRob · 26 Jul 2020 at 04:44

naefeart said:
This happens to me often as a result of our annual bonus. Queue an expected earnings jump to £192k!!

Last time they took £3k extra off me the month following my bonus. I called them and they agreed they'd got it wrong. They said 'the computer had made a mistake', thinking my salary had increased by several thousand pounds. They then said the system would correct itself the following month Who is going to wait that long to get £3k back??

How can they get away with operating like this? Any private company would find itself in serious water. It doesn't fill you with confidence when you repeatedly have to phone HMRC to tell them how tax works and what you should be paying. A total shambles

Yep, and you pretty much have to wait until your tax return sometimes more than 1 year later to make sure everything actually is correct and be sure you have got back any extra tax you paid.