I've paid too little tax and owe HMRC?

[Medic-one]

I got a letter from HMRC saying I've paid too little tax for "6 April 2021 to 5 April 2022" but never had to do anything tax related so was just wondering if people could explain things a bit to me.

I've moved to this country in 2006, straight into a NHS job and have been in that job since (ambulance paramedic). Everything tax related has always been done 'automatically' and I've never had to deal with tax returns or anything like that.

Since 2018 I also do the occasional bank shift for another NHS Trust (local hospital, in A&E) roughly about one or two a month, but can also go a month or so without doing any shifts in there.

I now got this letter to say I owe £ 752, to HMRC but I don't know in which job the tax has gone wrong.

I looked at my tax codes for my jobs for 2021 and 2022.

Main job (full time hours, paybanding and salary go up every year, though I'm now at the top of my band)

- Jan to Apr 2021 = 1254L CUMUL
- Apr to Dec 2021 = 1261L CUMUL

- Jan to Apr 2022 = 1261L CUMUL
- Apr - Oct 2022 = 994L CUMUL

Bank job (about 8 - 20 hours a month, paid weekly) = BR CUMUL for the whole of 2021 and 2022.

However there was this article in our local newspaper a few days ago saying "Southend Hospital 'payroll' issues sees nurses owe thousands to HMRC" and "“We were told it was an issue for HMRC but when any of us finally got through to HMRC, they stated it was for our payroll team to sort out."

https://www.echo-news.co.uk/news/23056161.southend...

So the 2nd job has had some payroll issue's by the looks of it, but I assume that's mainly for people who have that as their main job.

Before I start emailing both Trusts I thought I'd get some info here, as I'm not sure why my current tax code is lower then my previous ones in my main job, or is that normal when you have a 2nd job ?

And should second jobs always be on BR Cumul ?

Edited by Medic-one on Wednesday 26th October 13:22

[zedx19]

The letter will tell you why you've underpaid, it could be down to anything. You'd be better off speaking the HMRC though (Good luck).

I had a letter a few months back saying I'd underpaid, which was due to some company benefits changing (fuel card + private medical changes). I rang them, they setup a payment plan which they've managed to balls up entirely, such is the HMRC.

[otherman]

If you've got more than one source of income there's always a good chance it tax being wrong overall. What tax code does each job apply? You can see this on your pay documents.
The main job should have your notified tax code, the others will probably be BR which means you pay basic rate on the lot, assuming you used up your personal allowance on the main job. If you're in the 40% overall, that's probably where the underpayment comes from.

[Eric Mc]

Are you a higher rate tax payer?

[sociopath]

Find the p60 for both jobs, there are plenty of website calculators that will allow you to input income and tax paid and tell you what you should have paid

[Greenmantle]

Do a self assessment online. It will then calculate it for you.

[Medic-one]

zedx19 said:

The letter will tell you why you've underpaid, it could be down to anything. You'd be better off speaking the HMRC though (Good luck).

I had a letter a few months back saying I'd underpaid, which was due to some company benefits changing (fuel card + private medical changes). I rang them, they setup a payment plan which they've managed to balls up entirely, such is the HMRC.

The letter just lists income and income tax from both jobs, but I can't see where or why it's gone wrong.

Eric Mc said:

Are you a higher rate tax payer?

How would I find that out ?

[HappyMidget]

Medic-one said:

How would I find that out ?

Do you earn over £50,270?

[Medic-one]

HappyMidget said:

Do you earn over £50,270?

Only since last month, as NHS staff was given this payrise.

All NHS paybands and salaries are online so I don't mind putting them on here.

My gross yearly isn't on paper, however we get an extra 25% in unsociable hours (nights/weekend shifts) every month (even if I'm not working them) so if I was to add 25% to my annual salary (which is what I'm earning) than that takes it just over that amount by a couple hundred pounds, but only since September this year.

January - September 2022 Salary was £ 39.027 + 25% = £ 48,783

And from September it's £ 40.588, + 25% = £ 50,735

[Countdown]

Medic-one said:

Bank job (about 8 - 20 hours a month, paid weekly) = BR CUMUL for the whole of 2021 and 2022.

And should second jobs always be on BR Cumul ?

Edited by Medic-one on Wednesday 26th October 13:22

You've been taxed at 20% on your bank hours. It looks like some or all of that should have been at 40%.

If all your earnings are from the same "Employer" (same PAYE reference) then their Payroll team should have picked it up but sometimes payments going through late in the tax year arent always taxed correctly.

OTOH if it's different "Employers" then the only time the underpayment would have been picked up is when HMRC do their checks.

[Medic-one]

Countdown said:

You've been taxed at 20% on your bank hours. It looks like some or all of that should have been at 40%.

OTOH if it's different "Employers" then the only time the underpayment would have been picked up is when HMRC do their checks.

Thanks, that makes sense I guess.

They're both separate NHS Trusts so it's 2 different employers.

I also had a significant payrise in my main job in March 2021 (long story, big dispute, court involvement, but we, as a small group were proven to be right and won) so my annual pay went up by about 9K from one month to the next, which was in April 2021.

So I guess because my salary went up quite a bit in April 2021 in my main job I should have been paying more tax on my second job from then on, which hasn't happened, causing this underpayment, does that sound about right?

[Eric Mc]

Medic-one said:

How would I find that out ?

Do some sums. Honestly - it' not hard.

Add your Gross Salaries together for the relevant tax year and see if the combined gross salaries exceed the higher rate tax threshold.

All the information is available on line these days.

[AndyAudi]

Just asking as you might not be aware, but do you claim tax relief for things like professional suscriptions etc to be on a register, if not it might help offset a bit. You could have a few years worth


https://collegeofparamedics.co.uk/cop/Membership/T...

Edited by AndyAudi on Wednesday 26th October 23:04

[LosingGrip]

AndyAudi said:

Just asking as you might not be aware, but do you claim tax relief for things like professional suscriptions etc to be on a register, if not it might help offset a bit. You could have a few years worth


https://collegeofparamedics.co.uk/cop/Membership/T...

Edited by AndyAudi on Wednesday 26th October 23:04

And uniform! Think paramedics get a higher tax rebate as well.

[knitware]

Have you called HMRC?

I had a few letters this year threatening with legal action over unpaid VAT. In the end I called, emails wouldn't be answered.

When I called it transpired that I didn't owe any VAT, I paid my last bill months ago but the 'systems' hadn't communicated and therefore the letters.

[The Ferret]

Worth checking with the bank you work for to find out what tax code they currently have for you,

Going by your numbers above, it sounds like the code should be D0, as your full time job puts you into higher rate (just) and all of the pay from the bank should be subject to higher rate tax. If its not sorted, then expect the same problem for this year.

Are HMRC asking you to repay this tax now? They've reduced your tax code for 2022/23, but not sure whether this is to claw back the underpayment from last year, an attempt correct the tax for the current year, or something else?

[Countdown]

Medic-one said:

Thanks, that makes sense I guess.

They're both separate NHS Trusts so it's 2 different employers.

I also had a significant payrise in my main job in March 2021 (long story, big dispute, court involvement, but we, as a small group were proven to be right and won) so my annual pay went up by about 9K from one month to the next, which was in April 2021.

So I guess because my salary went up quite a bit in April 2021 in my main job I should have been paying more tax on my second job from then on, which hasn't happened, causing this underpayment, does that sound about right?

Yes.

[Countdown]

The Ferret said:

Worth checking with the bank you work for to find out what tax code they currently have for you,

Tax code will be on the payslips.

OP - I think it's already been suggested but what you really need is your P60s for last year and then punch the details into a website like "Listentotaxman.com". (although I'm not sure if it can deal with 2 jobs)

[The Ferret]

Countdown said:

Tax code will be on the payslips.

OP - I think it's already been suggested but what you really need is your P60s for last year and then punch the details into a website like "Listentotaxman.com". (although I'm not sure if it can deal with 2 jobs)

Good thinking on the payslip, I'm used to dealing with lazy arse idiots that would ring me and ask for their code in such circumstances, so I've given the lazy arsed idiot response there

It won't need to deal with 2 jobs. If he adds the P60 gross pay and tax figures for each employment together surely that will tell him how much his total earnings and total tax paid were, then just enter those figures as if they were one employment. It'll get more tricky if there are allowances, pensions, BIK's - so would need to be clued up on exactly how his tax code was made up in order to reconcile the exact amount owed.

[Countdown]

The Ferret said:

It won't need to deal with 2 jobs. If he adds the P60 gross pay and tax figures for each employment together surely that will tell him how much his total earnings and total tax paid were, then just enter those figures as if they were one employment. It'll get more tricky if there are allowances, pensions, BIK's - so would need to be clued up on exactly how his tax code was made up in order to reconcile the exact amount owed.

Yes it was the pensions I was thinking about. From distant memory the NHS pension Employees contribution rate is tiered depending on earnings. So the rate of deduction will be different.

Having said that I'm not sure if overtime is considered pensionable so it might be a moot point.