PAYE Tax liability

mdebets

Who is liable to pay the underpaid PAYE tax, if the employer is calculating it wrong?
The calculation of my PAYE tax is a little bit complicated (can't go into more detail, or it would identify myself and y employer). I have gotten different opinions from HR (actually two different opinions from different persons) and from Revenue. At the moment, the calculation is in my favour (i.e paying less tax than what Revenue is saying). I advised HR about this, but they think they are correct.
If Revenue decides in the future, that this calculation is incorrect, who is liable to pay the outstanding tax, me or my employer?

Ardeehey

You are if your emplyer has been deducting too little tax then you've been overpaid, it's a pain but you'll have to stump up. And to be honest I would plan for it because the Revenue are rarely wrong on these types of things. If it's a large amount I'm sure there would agree to a phased payment but hopefully it works out in your favour

Ghostrider11

Dont think Ardeehey is correct in this case. The primary responsibility for the deduction of PAYE on earned income rests with the employer. if there was a revenue audit of the firm at which it is discovered that there is a underdeduction of PAYE revenue will seek that additional tax from the employer. Of course the employer will seek to pass on this libility to the employee via the next payroll ( or perhaps over a few payrolls if substantial)
What is interesting however is a situation were the employee leaves. Revenue will look for the money from the employer and as the emplyee is no longer employed it can be difficult for them to get reimbursement.

2ndcoming

The above is incorrect. The legislation states the onus is on the taxpayer to ensure their tax is deducted correctly by their employer, per their tax credit certificate issued to them at the start of the year.

The employer is only a collection agent in the case of PAYE employees, the employee is the taxpayer so if the employer doesn't deduct it correctly the employee is the one left with the bill.

On the above Revenue don't audit a company's payroll, except for cases where the employer hasn't fully paid over what they deducted from employees. After the employer has deducted the tax it is their responsibility to pay it over, whether they deduct enough in the first place on an individual basis is only relevant to that individual.

thesimpsons

agree with 2ndcoming. The full responsibility rests with the employee to ensure their own tax situation is correct. Your annual tax cert states is it up to the employee to ensure their information is up to date and accurate. Employer must deduct on the basis of the information supplied to them by Revenue. An employee cannot change their tax credits/cutoffs directly with the employer.

allthedoyles

The tax office can only issue a cert based on the most recent info received and the employer can only act on most recent info received from tax office .

When employees start a new job , the employer mostly puts him/her on emergency , which give a month or so for employee to sort out .

But sometimes , an employer might use a P45 or a current tax cert , and put employee on week 1.
This can sometimes mean an under deduction from employee, which in my opinion is the fault of the employer.

gerrykeegan

Ardeehey wrote: »

You are if your emplyer has been deducting too little tax then you've been overpaid, it's a pain but you'll have to stump up. And to be honest I would plan for it because the Revenue are rarely wrong on these types of things. If it's a large amount I'm sure there would agree to a phased payment but hopefully it works out in your favour

Can't agree with "Revenue are rarely wrong"

My tax cert was wrong in 2009 2010 2011 and 2012. Every time I rang Revenue the admitted they were wrong. On one occasion and I quote, the girl said. Yes this happens a lot and we don''t know why.I had claimed medical expenses online. I had a receipt for the claim. They could see the claim but never applied them to my records.

thesimpsons

allthedoyles wrote: »

The tax office can only issue a cert based on the most recent info received and the employer can only act on most recent info received from tax office .

When employees start a new job , the employer mostly puts him/her on emergency , which give a month or so for employee to sort out .

But sometimes , an employer might use a P45 or a current tax cert , and put employee on week 1.
This can sometimes mean an under deduction from employee, which in my opinion is the fault of the employer.

yes but the onus is on the employee to check his payslip to ensure that they are on the correct rates. At the end of the day, even if the employer (or Revenue) make a gross error inputting a figure incorrectly, Revenue still puts the onus on the employee. Its tough luck for the hundreds who don't understand the tax system, or check things regularly, but thats life.

there is often no reason for an employer to put any employee on emergency tax. employer can ring Revenue and get all the relevant tax credits/cutoffs before running the new employees first payroll. Only time I've ever put someone on emergency tax is if they are new to the tax system or I've been instructed to by Revenue.