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[LC0112G]

Earlier this year HJ Heinz changed its name slightly (due to Warren Buffet effectively buying us out), but it was enough for HMRC to think that we'd all changed employers and our wonderful Pay Office it would seem was oblivious to any information that they might have told them. So, the other day, a letter from HMRC landed on  the doormat to tell me that I was entitled to a rebate  however ...... earlier in the year when my P60 arrived, I'd noticed that the figure in the red box ie the amount they said I would use if completing a tax return was way less than my total for the year. So I phoned the HMRC to ask if an error might have been made. He looked at various figures & agreed that an error had been made & that their estimate for my tax rebate was wrong.

Today a sizeable cheque arrived.

So, knowing you'd already phoned the tax office & kinda know it's a mistake, would you ..............
bank the cheque & wait for them to ask for the money back ...... it'd pay my car insurance next month very nicely 
or put the cheque to one side

Huh? P60's are issued by your employer, not HMRC. And it's your employers responsibility to deduct the correct amount of tax under PAYE based on your tax code.

So who made the initial error here? - Heinz or HMRC. If you aren't already on self assessment, then I would try very hard to sort this out ASAP with Payroll, because otherwise HMRC will put you on self assessment. And it's YOUR legal responsibility to make sure you pay the correct amount of tax, so it'll be you talking to Bubba in the showers if it goes horribly wrong.

Cheers
Malcolm

[Andy B]

Earlier this year HJ Heinz changed its name slightly (due to Warren Buffet effectively buying us out), but it was enough for HMRC to think that we'd all changed employers and our wonderful Pay Office it would seem was oblivious to any information that they might have told them. So, the other day, a letter from HMRC landed on  the doormat to tell me that I was entitled to a rebate  however ...... earlier in the year when my P60 arrived, I'd noticed that the figure in the red box ie the amount they said I would use if completing a tax return was way less than my total for the year. So I phoned the HMRC to ask if an error might have been made. He looked at various figures & agreed that an error had been made & that their estimate for my tax rebate was wrong.

Today a sizeable cheque arrived.

So, knowing you'd already phoned the tax office & kinda know it's a mistake, would you ..............
bank the cheque & wait for them to ask for the money back ...... it'd pay my car insurance next month very nicely 
or put the cheque to one side

Huh? P60's are issued by your employer, not HMRC. And it's your employers responsibility to deduct the correct amount of tax under PAYE based on your tax code.

So who made the initial error here? - Heinz or HMRC. If you aren't already on self assessment, then I would try very hard to sort this out ASAP with Payroll, because otherwise HMRC will put you on self assessment. And it's YOUR legal responsibility to make sure you pay the correct amount of tax, so it'll be you talking to Bubba in the showers if it goes horribly wrong.

Cheers
Malcolm

Pretty sure it's Heinz's fault because there are loads (if not all) of that have had a 'rebate'. It seems it's because HMRC think we've worked for two companies this year,  ............   

[aaronjb]

Pretty sure it's Heinz's fault because there are loads (if not all) of that have had a 'rebate'. It seems it's because HMRC think we've worked for two companies this year,  ............   

That would explain it - if HMRC thought Heinz was still your "primary" employment and the "new" company was your second job then they'll have taxed your Heinz income (which was actually zero) at your usual rate and the new company income at a flat rate 22% (if memory serves, or 10%.. I forget which) rather than the usual banded income tax rates.

Then at the end of the year they go "Oh snap, we taxed you too much, have some back!"

ISTR that's basically how it works, anyway, from sorting out my Dad's tax (pension taxed as primary income and a job taxed as secondary meant the tax never worked out right..)

[Andy B]

I'll phone them agai inthe next day or so & ask if I should treat the cheque as an interest free loan or send it back to them ...... but I can see that opening another can of tax worms   

[LC0112G]

I'll phone them agai inthe next day or so & ask if I should treat the cheque as an interest free loan or send it back to them ...... but I can see that opening another can of tax worms   

I'd get this sorted as a matter of urgency. The problem is that it's your responsibility to get your tax right. Neither your employer nor the tax man can know how much your total inome for the year is - you might have a paper round, or sell loads on eBay, or have shares that pay dividends for example. The tax man can be a vicious little sh1t if he thinks you owe him money - and recent law changes means they can dip directly into your bank accounts and take it without much/any warning.

Do you get monthly pay slips? If you do this should show your basic rate pay, and the tax and NI deducted. If your employer has changed, then you should have got a P45 from the old employer showing tax to date of change, then the new employer issues a P60 at end of year. Your pay slips may show when the error occurred. So whiilst the problem may have been caused by a Heinz alphabet-spagetti cock up, it's likely to be you that has to sort the mess out.

It'll be difficult to argue that you were un-aware of the problem when you obviously are, and therfore you could be liable to fines, late payment fees, and interest if it's lft to fester and it all goes wrong.

[LC0112G]

Pretty sure it's Heinz's fault because there are loads (if not all) of that have had a 'rebate'. It seems it's because HMRC think we've worked for two companies this year,  ............   

That would explain it - if HMRC thought Heinz was still your "primary" employment and the "new" company was your second job then they'll have taxed your Heinz income (which was actually zero) at your usual rate and the new company income at a flat rate 22% (if memory serves, or 10%.. I forget which) rather than the usual banded income tax rates.

Then at the end of the year they go "Oh snap, we taxed you too much, have some back!"

ISTR that's basically how it works, anyway, from sorting out my Dad's tax (pension taxed as primary income and a job taxed as secondary meant the tax never worked out right..)

Almost. What happens is everyone is allowed a tax free personal allowance - £9440 last year and £10000 this year. It can be different depending on lots of things, but that's the basic amount. HMRC then issue a Tax Coding notice to all your employers/ sources of income. You primary employer gets the tax code 944 for you. All other employers get a tax code of 000.

The Tax code tells the employer how much your allowance is (divided by 10). So they subtract (one twelth of) that amount from your monthly pay, and then tax you at either 20% or 40% (or 45%) on the remainder. If you don't earn £9440 from the primary employer, then some of your allowance will be left over, and this can be used to reduce your tax from any other employers. Pensions are usually classed as your primary income source.

So for example, if you get £8000 from a pension, and £6000 from some part time extra work. The pension provider will get allocated Tax code 944, so you won't be deducted any tax on that. However, the second employer will probably be allocated tax code 000, meaning that all £6000 will be taxed at 20%, so you'll only receive £4800, and pay £1200 tax. At the end of the year HMRC will (may!) realise that this isn't correct. Your yearly earnings were £14000, of which £9440 is tax free, so you pay 20% on £4560 = £912. So the tax man wil refund £288 (£1200-£912) excess tax you have paid.

PAYE works well for those with one income source, but can be a PITA for those with multiple income sources. It's no wonder many pensioners get in a mess with it when they're getting state pension, several occupational pensions and some part time income.

[aaronjb]

There we go .. I was close  It's been three years or so since I was looking at my Dad's tax stuff

[Andy B]

I'll phone them agai inthe next day or so & ask if I should treat the cheque as an interest free loan or send it back to them ...... but I can see that opening another can of tax worms   

I'd get this sorted as a matter of urgency. The problem is that it's your responsibility to get your tax right. Neither your employer nor the tax man can know how much your total inome for the year is - you might have a paper round, or sell loads on eBay, or have shares that pay dividends for example. The tax man can be a vicious little sh1t if he thinks you owe him money - and recent law changes means they can dip directly into your bank accounts and take it without much/any warning.

Do you get monthly pay slips? If you do this should show your basic rate pay, and the tax and NI deducted. If your employer has changed, then you should have got a P45 from the old employer showing tax to date of change, then the new employer issues a P60 at end of year. Your pay slips may show when the error occurred. So whiilst the problem may have been caused by a Heinz alphabet-spagetti cock up, it's likely to be you that has to sort the mess out.

It'll be difficult to argue that you were un-aware of the problem when you obviously are, and therfore you could be liable to fines, late payment fees, and interest if it's lft to fester and it all goes wrong.

and from, what the bloke at the tax office said last week, that's the problem. My 'old' employer - Heinz, didn't tell HMRC there was a name change & send a P45 to them before the new named employer ie Heinz 're-employed' me.
I only have one source of income ie what I earn from Heinz ...... no pension, no dividends from shares etc. The cheque is still at home,  though loads at work have banked theirs. 

[Andy B]

Just phoned the tax man again for confirmation. As a result of my previos call the cheque is now void while HMRC check the figures.

Another case it seems of HJ Heinz's ability to opps up the simplest of tasks!

[amba]

Sorry to hear your "wind fall " was short lived.

Typical HMRC..expect they will send you a bill now for stopping the cheque 

[Andy B]

Sorry to hear your "wind fall " was short lived.

But as expected, hence my phone call to them last week when the letter informing me of my rebate arrived. I was pretty sure there was an error in the first place. I suppose I could have banked it & then paid it back over the year when it was picked up on - like others at work have done. 

Typical HMRC..expect they will send you a bill now for stopping the cheque 

Nothing about the HMRC would surprise me 

[amba]

I,m still waiting for a sizeable rebate from overpayment on my last years self assessment as advised by my accountant from last years books.

Expect I will be still waiting this time next year though as unlike you ..they have my money and being Self Empolyed we are always a year in debt to them