Umbrella and wrong tax code

[mememois]

Hey,
I've been contracting for over 20 years. When IR35 came in I was ok. But then got a contract a couple of yers ago and suddenly I owe nealry £4K to the HMRC!
Yes, my fault - I was kind of signing things blindly re SA but hell - it's HMRC who sets them up etc.
Bottom line - I woe the, I owe them cos they seem to send a wrong tax code!

My way of thinking: all nice good and dandy but
1/my (still current account) was doing taxes - be it for my ltd or SA - we've never been wrong!
2/ having to use umbrella's dictated by agencies was awful and resulted in me - trying to pay off tax I didn't know I owe!


I have a question, is there anyone else out there being charged for something they don't feel they owe?

IF I were a perm and tax people within a company get it wrong. -who pays??

[WTFH]

You are responsible for your own tax code if you fill in a tax return (which many permies do).
HMRC assign tax codes based on what you tell them. There’s a standard code, and then things get added or taken away based on what makes you different.

[mememois]

I know that! thx
I was a permie for a few years prior to contracting (and prior to intro of IR35).

I'm trying to argue that an umbrella company - OR HMRC - should be responsible for mistakes like that.

I might have been receiving a letter abt tax code etc but umbrella was there to sort it out. And notice mistakes.

That's it.

[eek]

I know that! thx
I was a permie for a few years prior to contracting (and prior to intro of IR35).

I'm trying to argue that an umbrella company - OR HMRC - should be responsible for mistakes like that.

I might have been receiving a letter abt tax code etc but umbrella was there to sort it out. And notice mistakes.

That's it.

Um no. The umbrella is legally required to use the tax code it is given by HMRC.

So if HMRC gets its estimate wrong it’s nowt to do with the umbrella

[WTFH]

I know that! thx
I was a permie for a few years prior to contracting (and prior to intro of IR35).

I'm trying to argue that an umbrella company - OR HMRC - should be responsible for mistakes like that.

I might have been receiving a letter abt tax code etc but umbrella was there to sort it out. And notice mistakes.

That's it.

OK, let me repeat myself - YOU are responsible for checking your tax code. Your umbrella is not managing your personal tax affairs, that is your job. If you chose to ignore letters about your tax code sent to you, how is anyone else supposed to sort out your failure to advise or correct.
It's your responsibility, it's your tax code.
You do your tax return, you check your tax code, not the umbrella. It's your responsibility, not theirs, to check tax codes and get them corrected if necessary.

[DolanAccountancyAshley]

You’re responsible for any taxes due and for ensuring your personal tax position is correct — including any PAYE deducted through umbrella companies. If you think the figures might be wrong, you can contact HMRC and request a breakdown or tax statements for the past few years, so you can review them and identify where any discrepancy may be.

[Protagoras]

IF I were a perm and tax people within a company get it wrong. -who pays??

As the tax-payer, you do. One's employer(s) apply the tax codes provided by HMRC.

Don't forget that you can login to HMRC's portal and enter the expected value of your taxable income(s) for the year.
HMRC will then set your tax code(s) accordingly. It's the easiest way to minimise surprises at SA time.

I have a question, is there anyone else out there being charged for something they don't feel they owe?

There are loads of such people ... e.g.

Probably 99% of the victims of Loan Charge legislation.
Those forced 'inside' IR35
Those whose income was a few quid over the limit for whatever benefit who now face paying back all the benefits
Students ...

[cojak]

You missed this thread then Using an Umbrella? CHECK YOUR TAX CODE!!