Work Tax question please???

kenandhayley

I hope someone here mite b able to advise me on this!!
Cutting a long story short, after speaking to tax office they told me I underpaid tax in 2009 by nearly €1900!!! They said by looking at my P60 I didn't pay 1c tax during the year when I should have and to check it wit my employer.
So rang employer and they said as far as the accountant was concerned I had a full tax credit (?) for that year so they didn't need to deduct any tax?!??
So now I'm left with the €1900 bill and have no idea why or who's fault it is????
Any ideas??

Thoie

It depends on a lot of factors (which you may not want to share on the internet). Did you only have one job, or were you working two jobs, or had a second income somehow?

Do you have your 2009 P60 to hand? Were your entire earnings for the year around 28k?

Take a look at http://www.taxcalc.eu/ and select 2009 and put in your earnings for the year there and it will give an approximation of how much tax/prsi you should have paid.

Messing around with some figures, if you'd earned around 18k in 2009 you'd have had no tax liability. Is it possible there's a typo somewhere that says you earned 28k instead of 18k? That would match the discrepancy.

kenandhayley

No that was my only employment, but my husband is also working and as far as I no we are jointly assessed?
My total earnings for that year were only just over €18000 but the tax office said according to my tax credits that year I should have paid just over €1800?????
I'm confused now as my employer said I didn't have to pay any??

Howjoe1

Have you been allowed your full Personal, PRSI tax credits on the balancing statement ?

Had you a second source of income or did you transfer credits to a spouse?

don't want to get your hopes up too much, but Revenue do make mistakes.

Thoie

kenandhayley wrote: »

No that was my only employment, but my husband is also working and as far as I no we are jointly assessed?
My total earnings for that year were only just over €18000 but the tax office said according to my tax credits that year I should have paid just over €1800?????
I'm confused now as my employer said I didn't have to pay any??

Ask the Revenue how much they think you earned that year according to their records. If they answer "28k", then there's a typo somewhere (prob on your P60) where someone's typed 28 instead of 18. If that's what's happened you'll have to ask them how to remedy that - may need to get old payslips from your company to show that you only earned 18.

Another possibility is that your husband's income "ate" your tax credits (not sure if they do it that way any more), in which case you wouldn't have had any tax credits, and would therefore owe tax. If that was the situation, then it would have been up to you to notify your employer that you had no tax credits for the year, otherwise they'd assume you had the standard ones as printed on your tax cert for the year.

If you have you and your husband's P60s for 2009, the easiest thing tonight is to play with the tax calculator and see if they gel.

namenotavailablE

At an absolute minimum, you would have been entitled to an employee tax credit of €1830 and a cut-off point of €18000 (restricted) in 2009.
Using these values, your PAYE bill would have been €1770 (calculated as 20% x 18000 less tax credit of 1830). The income levy would have been €240 extra.

If your employer assumed that your credits were €3660 [which means that you and your husband split the total credits equally between you rather than giving the higher earner (I'm assuming that's your husband for this example)], then no tax would have been deducted.

So- I think you need to check out the value of your tax credits per your P60 and compare to what the employer is using on your last payslip for 2009 (or on the P35 s/he returned for 2009). It could be the case that the employer assumed 1 value for credits and the tax office actually had another value, giving rise to the discrepancy.

Howjoe1

namenotavailabl wrote: »

At an absolute minimum, you would have been entitled to an employee tax credit of €1830 and a cut-off point of €18000 (restricted) in 2009.
Using these values, your PAYE bill would have been €1770 (calculated as 20% x 18000 less tax credit of 1830). The income levy would have been €240 extra.

If your employer assumed that your credits were €3660 [which means that you and your husband split the total credits equally between you rather than giving the higher earner (I'm assuming that's your husband for this example)], then no tax would have been deducted.

So- I think you need to check out the value of your tax credits per your P60 and compare to what the employer is using on your last payslip for 2009 (or on the P35 s/he returned for 2009). It could be the case that the employer assumed 1 value for credits and the tax office actually had another value, giving rise to the discrepancy.

and not to scare you too much, but, if all the credits were with your husband and the employer mistakenly presumed you were claiming half the credits, then the same situation might arise 2010:(

relax carry on

kenandhayley wrote: »

No that was my only employment, but my husband is also working and as far as I no we are jointly assessed?
My total earnings for that year were only just over €18000 but the tax office said according to my tax credits that year I should have paid just over €1800?????
I'm confused now as my employer said I didn't have to pay any??

Sounds like your spouse had your personal tax credit of 1830 Euro for 2009 meaning he paid 1830 less tax than he would have otherwise.
You can confirm this by looking at your tax credit certificate for 2009.

It may be that your employer was using a cert from 2008 or a cert from early in 2009 before your 1830 personal credit transfered to your spouse meaning they did not have the correct cert. Without the up to date information they couldn't have taxed you correctly.

kenandhayley

Yeah that seems to b exactly what has happened. My P60 says tax credits 3660 and my husbands says 5580??
It seems to b a mix up between the tax office and my employer? How would that have happened?? I presume the tax office would have notified the employer that I didn't have full credits?
What do I do now???

namenotavailablE

€3660 on your P60 means that the employer used that value when calculating your tax. Hence no tax deducted by the employer.
Now you need to check what value the tax office staff have for your tax credits and your husband's. They probably issued you a P21 document showing how they calculated the €1800 liability- check what value they are showing for your tax credits on that.

Howjoe1

kenandhayley wrote: »

Yeah that seems to b exactly what has happened. My P60 says tax credits 3660 and my husbands says 5580??
It seems to b a mix up between the tax office and my employer? How would that have happened?? I presume the tax office would have notified the employer that I didn't have full credits?
What do I do now???

bottom line....your stuck having to pay it. see will they collect it over 2/3 yrs by reducing future tax credits. at least that would avoid the pain of an upfront lump sum.

Also, ask your employer to show you where he got the tax deduction card saying your credits were 3660.

kenandhayley

The tax office has already told me that I didn't have a full tax credit (which is what my employer thought) so my question is now, am I still liable to pay the outstanding figure even though I have nothing to do with the tax credits??

Howjoe1

kenandhayley wrote: »

The tax office has already told me that I didn't have a full tax credit (which is what my employer thought) so my question is now, am I still liable to pay the outstanding figure even though I have nothing to do with the tax credits??

Yes. the onus is on the taxpayer to ensure his/her tax credit certificate is correct. THis is the line they are taken with the OAPs who were not paying enough tax due to SW Pension not being taken into account.

Were you both working in 2008. If so, did you not notice that your husband was suddenly paying a lot less tax in 2009? did you or your husnband request that your credits be transferred to your husband? were you working on a "net pay" arrangement?

If your employer got a tax cert with nil credits for you and wrongly operated same, you could ask him to accept/share the burden (not enforceable I would imagine)

relax carry on

kenandhayley wrote: »

The tax office has already told me that I didn't have a full tax credit (which is what my employer thought) so my question is now, am I still liable to pay the outstanding figure even though I have nothing to do with the tax credits??

Yes. As your spouse benefited from your 1830 personal tax credit. If he did not have it, then you wouldn't have paid any tax but then he would have paid an extra 1830 tax.
To find out how it happened, ask Revenue how many tax credit certs were issued for you in 2009 and when. Then ask your employer what's the date of the last cert they have for you for 2009. It is likely as I said earlier that your employer was using an incorrect cert either from 2008 or prior to your personal tax credit moving to your husband.

You can try to get Revenue to collect the underpayment over 4 years by reducing your credits.

namenotavailablE

I'd second the suggestion to try get the repayment spread out by reducing your tax credits over a few years- I am repaying a smaller amount over 3 years this way. It's relatively painfree (insofar as paying tax can be painfree!)

kenandhayley

Ok. Thanks to everyone that replied, u helped make sense of it anyway!