Reply to: Paid twice in 1 accounting month

[northernladuk]

Got any umbrellas you recommend? They are being quite bad and the screwed up big time at the beginning by processing my monthly invoice as if it was weekly.

Clarity Umbrella. Lucy posts on here regularly and knows her stuff. I was with her under a different group but they would be my first choice.

[Mobix]

Got any umbrellas you recommend? They are being quite bad and the screwed up big time at the beginning by processing my monthly invoice as if it was weekly.

[eek]

In which case not a clue as they have enough information to put you on as 1257L without any emergency bits

[Mobix]

Without P45? I gave them my P45 from the limited company. They said they do not need it though and asked me not to send it to them. Do you mean P45 from the current tax year?

[eek]

You mentioned umbrella receiving the correct tax code but this was their response:

"You would have been allocated the tax code 1257L M1W1 as when you completed the new employee starter form, you entered that this was now your only job."

By the sounds of it the umbrella thinks this is the correct tax code but according to you guys this isn't?

It's an emergency code see https://www.which.co.uk/money/tax/in...s-ambdb8y7h2yx - without a p45 it is where you end up until you fix it

[Mobix]

You mentioned umbrella receiving the correct tax code but this was their response:

"You would have been allocated the tax code 1257L M1W1 as when you completed the new employee starter form, you entered that this was now your only job."

By the sounds of it the umbrella thinks this is the correct tax code but according to you guys this isn't?

[hobnob]

Given that OP is on emergency pay it will be sorted out when one of the following occurs:-

1) over the next few pay pockets after your umbrella receives the correct tax code (which the OP can sort out himself)
2) In January 2023 after he completes the self assessment form.

It's worth noting that Jan 2023 is the *deadline* for the SATR (2021/2022), but you don't have to wait that long. I submitted mine (for 2020/2021) on 8th May, and got the rebate on 17th May. The only reason I waited that long (rather than doing it on 7th April) was to get the annual interest summary from my bank account, so that I could enter the exact amount in the SATR.

In OP's case, it would be plausible to reclaim the extra tax in May 2022 rather than Jan 2023.

[eek]

The ratio of money missed out is actually a bit worse due to student loan. That money now could have been used to pay for a deposit or invested. I don't know, if I was designing a payroll system for contractors I would have a check is this person on a monthly timesheet? If yes, check if they have already been paid this month, if yes ask if they want to process 2 payments within the same tax month. Anyway I'm ranting.

As for the P45. This is probably my fault but I assumed that If I started working with the umbrella on the 5th of April then there was no need for me to provide a new P45 since I couldn't have paid any tax so far?

Emergency tax codes tells payroll to ignore accumulative figures - divide the allowances by 12 and use that 12th as the starting point for all calculations. If you had accumulative figures the income tax and PAYE figures would be better but it's unlikely they would be the great fix you hoped them to be.

I would just be thankful that you did this in May and not in March - if that was the case getting the excess Student loan payment back would be nigh on impossible.

Oh and while it may make sense for umbrella firms to retain money for a few days, in reality you really, really, really don't want umbrella firms doing that.

[Mobix]

But having had a quick look at a caculator I can see why the OP is complaining.

£10,000 a month generates a take home of £5800.
£20,000 a month generates a take home £10700 - which means the OP is going to be £900 down until things get caught up in July, although he may have the same problem in September with both his July and August payments being in the August tax month.

Oh and I can't think of any fix for the issue except finding an agency that pays slightly less rapidly...

The ratio of money missed out is actually a bit worse due to student loan. That money now could have been used to pay for a deposit or invested. I don't know, if I was designing a payroll system for contractors I would have a check is this person on a monthly timesheet? If yes, check if they have already been paid this month, if yes ask if they want to process 2 payments within the same tax month. Anyway I'm ranting.

As for the P45. This is probably my fault but I assumed that If I started working with the umbrella on the 5th of April then there was no need for me to provide a new P45 since I couldn't have paid any tax so far?

[eek]

It's not a fault of the agency or umbrella. They are paying you according to the contract terms. You submit timesheets each month and they pay you each month. It's not up to them to manage your tax affairs.

Assuming you are not on an emergency tax code (did you check that as SiMac suggested?) then you will get the PAYE element back in your next pay packet. If you're on emergency tax, then why have you not given the umbrella a P45? Do you have two jobs, or are on two payrolls? If so, then you'll have to wait to the end of the tax year as that's not the umbrella's fault, no matter how much you think you're being treated unfairly.

A nanosecond search on google for the term "reclaim overpaid NI" brings up this result, which will tell you more about how to claim the probably insignificant amount of NI you've overpaid: https://www.gov.uk/claim-national-insurance-refund

Was about to reply but there is no need ^ is just about everything you need to know.

Given that OP is on emergency pay it will be sorted out when one of the following occurs:-

1) over the next few pay pockets after your umbrella receives the correct tax code (which the OP can sort out himself)
2) In January 2023 after he completes the self assessment form.

But having had a quick look at a caculator I can see why the OP is complaining.

£10,000 a month generates a take home of £5800.
£20,000 a month generates a take home £10700 - which means the OP is going to be £900 down until things get caught up in July, although he may have the same problem in September with both his July and August payments being in the August tax month.

Oh and I can't think of any fix for the issue except finding an agency that pays slightly less rapidly...

[ladymuck]

I just checked and my tax code ends with W1M1.

According the gov website it's
If your employee’s tax code has ‘W1’ or ‘M1’ at the end


W1 (week 1) and M1 (month 1) are emergency tax codes and appear at the end of an employee’s tax code, for example ‘577L W1’ or ‘577L M1’. Calculate your employee’s tax only on what they are paid in the current pay period, not the whole year.

Any idea what I can do to get the money back ASAP? I'm applying for a mortgage and the lender wants to see payslips.

Same umbrella screwed up my first payments by processing my monthly payment as if it was just 1 week.

Nothing has been screwed up. The tax code tells your umbrella what to do.

Now, what are YOU going to do to get your tax code sorted? It's your responsibility so I suggest you fix it. Where is the P45 from your previous employment? Why haven't you provided it to the umbrella yet?

The mortgage company don't care what your tax code is, they just want to see payslips that match the level of income you've said you earn.

[SimonMac]

I just checked and my tax code ends with W1M1.

According the gov website it's
If your employee’s tax code has ‘W1’ or ‘M1’ at the end


W1 (week 1) and M1 (month 1) are emergency tax codes and appear at the end of an employee’s tax code, for example ‘577L W1’ or ‘577L M1’. Calculate your employee’s tax only on what they are paid in the current pay period, not the whole year.

Any idea what I can do to get the money back ASAP? I'm applying for a mortgage and the lender wants to see payslips.

Same umbrella screwed up my first payments by processing my monthly payment as if it was just 1 week.

There isn't, any overpayment in tax will be sorted out at the year end (although odds are there will not be an over payment as SA etc will mean you will just owe them less if you've paid yourself any dividends), move on there is no point trying to pursue this as the agency won't help as they have paid you want HMRC has told them to based on the information they have at the time of the RTI.

Let me repeat that, there is no money due back to you as no error has been made, you have been paid twice within a month, that is bad luck not anyones fault.

[Mobix]

I just checked and my tax code ends with W1M1.

According the gov website it's
If your employee’s tax code has ‘W1’ or ‘M1’ at the end


W1 (week 1) and M1 (month 1) are emergency tax codes and appear at the end of an employee’s tax code, for example ‘577L W1’ or ‘577L M1’. Calculate your employee’s tax only on what they are paid in the current pay period, not the whole year.

Any idea what I can do to get the money back ASAP? I'm applying for a mortgage and the lender wants to see payslips.

Same umbrella screwed up my first payments by processing my monthly payment as if it was just 1 week.

[ladymuck]

I get that but it feels like to make like I missed out on a lot of money now due to my agency's and umbrella's faults. They are both the tax experts not me. Both companies take money for my paycheck each months and they kind get this simple thing right or even warn the contractor in advance. It is always beneficial to have the money now rather than later. Any idea how I can get the refund straight away?

It's not a fault of the agency or umbrella. They are paying you according to the contract terms. You submit timesheets each month and they pay you each month. It's not up to them to manage your tax affairs.

Assuming you are not on an emergency tax code (did you check that as SiMac suggested?) then you will get the PAYE element back in your next pay packet. If you're on emergency tax, then why have you not given the umbrella a P45? Do you have two jobs, or are on two payrolls? If so, then you'll have to wait to the end of the tax year as that's not the umbrella's fault, no matter how much you think you're being treated unfairly.

A nanosecond search on google for the term "reclaim overpaid NI" brings up this result, which will tell you more about how to claim the probably insignificant amount of NI you've overpaid: https://www.gov.uk/claim-national-insurance-refund

[Mobix]

It all gets sorted out over time, as ladymuck said. Most likely through an adjusted tax code next year, but you can also get a refund.

I get that but it feels like to make like I missed out on a lot of money now due to my agency's and umbrella's faults. They are both the tax experts not me. Both companies take money for my paycheck each months and they kind get this simple thing right or even warn the contractor in advance. It is always beneficial to have the money now rather than later. Any idea how I can get the refund straight away?