Underpayment of Tax. Who is responsible???

Carraig95

Hi all!

Just a quick one for ye!

I applied through a tax refund company to see if I was due back any tax...and they came back saying I owed a fairly significant amount as my tax paid last year was underpaid by my employer.

I work full time and for the last few years was getting one full time wage. Mid way through last year they split my payment to two part time positions (as I am on two different part-time contracts). As soon as this was done my wage increased by about €40 per week. I raised the issue wit my boss and she said 'Just leave it'. Raised it again a few times and it was completely fobbed off. Sent a fax with all my details to the revenue and went in with an enquiry at one stage and never heard anything back.

In the email from the tax refund company they said 'once observed it will be offset against future refunds or tax credits'. Does this mean I will have to pay back the full amount asap? Or will it be stretched out over a period of time? Is there any way my boss is responsible for my tax affairs (as they pay my PRSI, structure my payment etc) or is it entirely my responsibility?

Pretty flustered now and any help would be greatly appreciated.

Jasper79

Hi,

This happened to me last year too when I applied for refund.

I was due 300 euro back but my employer underpaid by PAYE by 900.

Net result was I owed revenue 600.

They adjusted my tax credits for this year so down 50 euro a month.

You can check on PAYE Anytime or give revenue a ring.

Also although your employers mistake, it's your tax liability .

Carraig95

Jasper79 wrote: »

Hi,

This happened to me last year too when I applied for refund.

I was due 300 euro back but my employer underpaid by PAYE by 900.

Net result was I owed revenue 600.

They adjusted my tax credits for this year so down 50 euro a month.

You can check on PAYE Anytime or give revenue a ring.

Also although your employers mistake, it's your tax liability .

Thanks! Absolutely seething with my employer! Especially because I raised the issue with them numerous times and I got this blasé attitude back saying it was something to do with my payment being changed from full time to two part time positions. I have very little understanding of tax and placed a serious level of trust in my employer. Just raised the issue with my manager and was told tough s**t basically.

Oh well!

aoifemrtn

Carraig95 wrote: »

Thanks! Absolutely seething with my employer! Especially because I raised the issue with them numerous times and I got this blasé attitude back saying it was something to do with my payment being changed from full time to two part time positions. I have very little understanding of tax and placed a serious level of trust in my employer. Just raised the issue with my manager and was told tough s**t basically.

Oh well!

I posted on a simliar issue yesterday. I'm a PAYE worker who underpaid her tax. As I was PAYE I (foolishly) assumed everything was fine. I now owe 4K to the revenue and have no means of payment.

Still working through this. (sigh)

Aoife.

Carraig95

aoifemrtn wrote: »

I posted on a simliar issue yesterday. I'm a PAYE worker who underpaid her tax. As I was PAYE I (foolishly) assumed everything was fine. I now owe 4K to the revenue and have no means of payment.

Still working through this. (sigh)

Aoife.

That's a nightmare!!! Bad one. Presume they reduce your tax credits or is that how it works? Spoke to the tax rebate company and they told me my credits will get hit and it'll be taken off me over the course of three years. Not too much on a weekly basis (if that's how it works) but still a headwreck!

Hope it works out!

bridster007

A very large number of people working in payroll have no idea how to calculate a persons tax manually on a piece of paper. They just punch numbers into a package and assume the output is correct. They have no ability to check it. Worse still, they have an attitude that the "system is right" and will not entertain queries.
Never trust anything from a payroll dept.


I am not so sure about the point that the employer has no liability as they are the responsible authority for operating the PAYE system.

You could post over in the tax forum on www.askaboutmoney.com as there are a lot of experienced posters there.

Carraig95

bridster007 wrote: »

A very large number of people working in payroll have no idea how to calculate a persons tax manually on a piece of paper. They just punch numbers into a package and assume the output is correct. They have no ability to check it. Worse still, they have an attitude that the "system is right" and will not entertain queries.
Never trust anything from a payroll dept.


I am not so sure about the point that the employer has no liability as they are the responsible authority for operating the PAYE system.

You could post over in the tax forum on www.askaboutmoney.com as there are a lot of experienced posters there.

Thanks for that! I actually had it out with the boss and she came back and was very apologetic. I reckon she got some advice from someone because I was informed that as soon as I get any notification from Revenue I am to let them know.

Absolutely ridiculous attitude she had at the start in fairness, just fobbing it off saying it wasn't her problem! Ah well, won't let this one lie anyways.

Thanks!

tomjoad

http://www.revenue.ie/en/business/paye/guide/employers-guide-paye-tax-year.html#section6


Read point 6 here.
Based on what you say, you have a good argument that reasonable care was not exercised.
You have a right to expect that the employer has proper training and procedures in place to correctly process payroll.

You may end up negotiating a 50/50 settlement at a minimum.

Note that there may be tax implication if the employer agrees to pay the tax for you ( you will need to be taxed on this as a benefit) .

However, at this stage you are dealing with tax refund company.
Your employer should have submitted his P35 at this stage for the year and the Revenue should now be picking up the issue themselves.

barneystinson

tomjoad wrote: »

http://www.revenue.ie/en/business/paye/guide/employers-guide-paye-tax-year.html#section6


Read point 6 here.
Based on what you say, you have a good argument that reasonable care was not exercised.
You have a right to expect that the employer has proper training and procedures in place to correctly process payroll.

You may end up negotiating a 50/50 settlement at a minimum.

Note that there may be tax implication if the employer agrees to pay the tax for you ( you will need to be taxed on this as a benefit) .

The employer may remain liable to Revenue for the tax they didnt deduct, but that doesn't mean the employee is entitled to a credit for it - you are only entitled to a credit for tax deducted - so the OP still has not paid enough income tax.

Mr. Incognito

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