Under taxed by my umbrella, now I have a huge tax bill

[BobbyCrane]

The problem is that paying the correct tax is down to the individual. It doesn't matter that you trusted your advisor to tell you the right amounts, it's still your responsibility

There is a separate argument about recovering that money from whichever advisor made the mistake, if indeed it is that simple, but the OP will have to find the money from somewhere.

And I suspect CU will not comment publicly until they fully understand what happened.

They know - 7 months of batting me away means they definitely know what went on. They tell me that they’ve changed their processes but not admitted that they were flawed before.

[cojak]

Even easier than that, if OP gave CU a P45 or P60 the code will be on there, if he didn't then CU will emergency tax him at 20% which it looks like whats happened.

I feel a sticky coming on...

[VelcroPower]

Normally the Umbrella company will have absolutely nothing to do with the tax code other than applying it based on the information supplied by you/HMRC

It's not their job to manage your tax, it's their job to get the payroll right based on the information they have received.

Having said that, in my former life in umbrella payroll we periodically went through and reviewed anyone with a BR tax code earning over £x to let them know they could be underpaying tax and to speak to HMRC as a matter of urgency to rectify it.

It's not a part of the normal service (or T's & C's) by any means but it doesn't take that much to check.

So yeah it's something they maybe *could* have done, but I don't think they are in any way obliged to do it.

[BobbyCrane]

what was your tax code in 2017/18?
What was it in 2018/19?
What is it this year?

br
br
0t

[WTFH]

br
br
0t

And there is the answer.

BR tax code is not CU's fault/responsibility.
It means all your income is taxed at basic rate. CU have applied that correctly.

It might be worth investigating why you were on a BR code in 2017, and see how far back you've been on that code.
Were you, at some time, declaring you had multiple jobs?
Were you claiming a pension?

[BobbyCrane]

And there is the answer.

BR tax code is not CU's fault/responsibility.
It means all your income is taxed at basic rate. CU have applied that correctly.

It might be worth investigating why you were on a BR code in 2017, and see how far back you've been on that code.
Were you, at some time, declaring you had multiple jobs?
Were you claiming a pension?

I was working through my Ltd co on “outside IR35” contracts before so BR was right.
Why is it not their responsibility to understand from what they are processing that higher tax is due and advise me accordingly? If I were a permanent employee in a normal company, I would not expect to have to be a payroll or taxation expert to know if I were paid correctly!

[cojak]

The problem is that paying the correct tax is down to the individual. It doesn't matter that you trusted your advisor to tell you the right amounts, it's still your responsibility

There is a separate argument about recovering that money from whichever advisor made the mistake, if indeed it is that simple, but the OP will have to find the money from somewhere.

And I suspect CU will not comment publicly until they fully understand what happened.

All they need to do is to say ‘We hear you, let’s speak offline’.

[SimonMac]

I was working through my Ltd co on “outside IR35” contracts before so BR was right.
Why is it not their responsibility to understand from what they are processing that higher tax is due and advise me accordingly? If I were a permanent employee in a normal company, I would not expect to have to be a payroll or taxation expert to know if I were paid correctly!

Sorry but this is wrong. A BR (or any tax code) and Outside/Inside has no relationship what so ever

[WTFH]

I was working through my Ltd co on “outside IR35” contracts before so BR was right.

Why was BR right when you were working through your own Ltd?

Why is it not their responsibility to understand from what they are processing that higher tax is due and advise me accordingly?

because the previous company - i.e. your Ltd - had happily been paying you with the wrong code and had never queried it.
Why is it not the responsibility of your previous company to supply the correct information to the umbrella?

If I were a permanent employee in a normal company, I would not expect to have to be a payroll or taxation expert to know if I were paid correctly!

Why did the previous company - i.e. your Ltd - not check your tax code was correct?

[cojak]

Normally the Umbrella company will have absolutely nothing to do with the tax code other than applying it based on the information supplied by you/HMRC

It's not their job to manage your tax, it's their job to get the payroll right based on the information they have received.

Having said that, in my former life in umbrella payroll we periodically went through and reviewed anyone with a BR tax code earning over £x to let them know they could be underpaying tax and to speak to HMRC as a matter of urgency to rectify it.

It's not a part of the normal service (or T's & C's) by any means but it doesn't take that much to check.

So yeah it's something they maybe *could* have done, but I don't think they are in any way obliged to do it.

Now THAT’S a great idea, VelcroPower - it is NOT beyond the wit of man to set up a monthly report that looks up 0T tax codes and send out automated emails to people every month, reminding them to look up, and sort out their tax code with HMRC.

I hope any Umbrella reading this give the idea serious consideration. You’re not legally obliged but you are their employer after all, at least pretend that you care and do this for your employees.