RTI and HMRC - a whinge

[Sean Key]

I am posting to share this experience, whinge, and see if anyone can offer any advice?

I and my wife are applying for a re-mortgage, using one of the specialist contractor brokers, as I've run a Ltd Co. for the past 6 years.

My better half is a locum medic, but the new kind, where she is contracted on multiple short-term part-time contracts, to the same employer [is this starting to look like what the future might look like for us, if HMRC get their way?].

So, my income verified fine. However, there seems to be some confusion between HMRC and my wifes employer over what her pay has been. Basically, HMRC think is £9k less than it was.

This came to light when we asked HMRC for an 'Emloyment History' letter, as the P60 generated by her employer was wrong.

Last year she had one contract that ran all year (2 days a week) plus 5 contracts than ran sequentially filling a 3rd day a week.

When rendered as monthly RTI returns, plus another correction return at year end, the picture gets really confusing. Trying to correct it is hard, as we have been caught in a loop between HMRC saying the employer needs to send a correction, and the employer saying there is nothing to correct and the problem is at HMRCs end.

This has dragged on for 3 months, delaying our re-mortgage, which has cost us a few thousand having to pay the old mortgage rather than the cheaper new one.

The first reason I wanted to mention this is because this feels like the kind of set-up that HMRC seem to want to herd us towards - multiple permie contracts. Combined with RTI returns, it doesn't seem to work.

The second reason is to ask if anyone has any advice about any of the following;
- anyone come across this before, how long did it take to sort out, did you do anything we haven't tried?
- is there a legal obligation on the employer to make accurate returns?
- do we have any right of redress here?
- where can I get detailed info about what's supposed to go into a P60 when either you've changed employer in-year, or your current employer has issued you 4 x P45 in the same year
- where can I find a spec for the format and content of an RTI return, I can't fathom out how the corrections are meant to be related to the monthly submissions.

Any help appreciated. Yesterday she got notification of a tax refund (based on the incorrect low salary), so we have to phone up HMRC again and stop that now as well !

[NickFitz]

It might be worth asking the mods to move this thread over to Accounting/Legal, as those who hang out there are more likely to be able to offer you useful advice, and also have too much good taste to be looking in General

[cojak]

Done, thanks NF (and Missinggreenfields)

[Jessica@WhiteFieldTax]

Yes, the employer has a obligation to report accurately. It's fundamental, and penalty backed.

However if the employer says it's right, then why are HMRC saying it's wrong? The employer is more likely, on balance, to be correct.

The detail here, if you can share it, may unearth something.

FWIW when you have multiple employments with same employer, the biggest risk is duplicate records. Look very carefully at every P45, P60, etc, to see if payroll number the same, NINO correct.

If she had a cumulative tax code then previous employments should flow through to final P60 in the "total for year box" cf the "pay this employment" box, which will only be the latest contract. The P45 from previous contracts feeds into the "total for year box"

However if she had a non cumulative tax code at any stage, eg week one/month one and that found its way in to a P45 then, AFAIR, that doesn't find its way onto the new employment record.

Bottom line, multiple PAYE has always creaked with simultaneous multiple employments, the more you have, the more it creaks (I do voluntary tax work for low income OAPs and if they have 2 or 3 small pensions it becomes a burgers muddle), and multiple,employments with the same employer would make it creak more.

I suspect both HMRC and employer are right in their own way, but the dots aren't being joined up.

HTH