Tax underpayment and tax free allowance

[PainTrain]

I woke up to an email from HMRC today to say that my tax code had been changed, upon going through the portal it appears as though this is correct and I have gone from 1257L to 867L for the next tax year.

This is due to two employers using my tax free allowance codes concurrently.

For context I worked for company A full time from 2015 to 2016, and dropped to part time hours when I moved to company B in 2016. I then left company A entirely in 2021. This duplication of codes meant that I underpaid my income tax by £3,897 over the duration. National Insurance was unaffected.

Having just spoken with HMRC they stated that they attempted to contact company A to submit a different tax code, however this obviously didn't happen.

Is this just a case of grin and bear it, or is it worthwhile taking this up with company A as the HMRC advisor suggested?

Thanks,

[Rufus Stone]

What do you expect company A to do about it?

[leef44]

There is nothing to grin and bear.

HMRC has corrected the issue by adjusting your PAYE code to get to the same end to ensure you pay the correct tax. If you stop working for that company in the future then let HMRC kwow but otherwise it sounds like all is ok.

[Countdown]

PainTrain said:

I woke up to an email from HMRC today to say that my tax code had been changed, upon going through the portal it appears as though this is correct and I have gone from 1257L to 867L for the next tax year.

This is due to two employers using my tax free allowance codes concurrently.

For context I worked for company A full time from 2015 to 2016, and dropped to part time hours when I moved to company B in 2016. I then left company A entirely in 2021. This duplication of codes meant that I underpaid my income tax by £3,897 over the duration. National Insurance was unaffected.

Having just spoken with HMRC they stated that they attempted to contact company A to submit a different tax code, however this obviously didn't happen.

Is this just a case of grin and bear it, or is it worthwhile taking this up with company A as the HMRC advisor suggested?

Thanks,

When you started working for B they would have asked you to complete a New Starter Form. On that form you should have ticked Box C. they would then have allocated you a BR tax code rather than giving you the full personal allowance.

However it's super-odd that HMRC didnt pick this up for the last 4 years. I have two lots of PAYE income (as does my daughter). in both cases HMRC identified it after year end and adjusted our tax codes accordingly. Actually they did the same for my youngest as well (who works at McDonald's as well as for her University as a Student Guide). You can actually do it yourself by logging onto the Govt Gateway and putting in your estimated earnings.

TL:DR Nothing you can do about it and it's not really A or B's fault. You have to pay the underpaid tax.