Under taxed by my umbrella, now I have a huge tax bill Under taxed by my umbrella, now I have a huge tax bill
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  1. #1

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

    I work in the public sector, paid through an umbrella company (I wont name them yet) which failed to make the correct tax deductions and resulted in a £27,500 tax bill for 2018/19 and because I don’t have that kind of cash sitting around, a likely interest bill between £1,800 and £2,000.

    It was my first time through an umbrella co and with the way they break down payslip earnings, I assumed that the tax rate was being suppressed somehow, naive I know. I quantified the error in June 2019 when I got my P60.

    Company are claiming that they are not responsible for the incorrect tax codes being used in the preparation of my weekly or monthly pay, that HMRC should have spotted it and changed my tax code. HMRC have told me that they issued the correct code to the co in September 2018 but they deny this.

    My contention is that I pay a fee for a specialist service which is purely one of payroll and correct deduction of taxes as due. I have asked for a return of my fees and the interest cost but they are refusing.

    Anybody else been through this?
    Do I have a legal case?

  2. #2

    Fingers like lightning

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    So you had no idea you were paying £27,500 less tax than you should have been in a single tax year..........
    "why ride a vespa when you can push a lambretta?"

    As I look ahead, I am filled with foreboding; like the Roman, I seem to see "the River Tiber foaming with much blood."

  3. #3

    Respect my authoritah!

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    The tax is due, regardless of your tax code. Have you talked to HMRC and requested time to pay - or even if the debt can be collected via your tax code, or at least some of it. It obviously won't remove the interest required, but it should mitigate it.

    As far as a legal case, my guess is probably not. But you could try and maybe you'll get a settlement to make you go away.
    Down with racism. Long live miscegenation!

  4. #4

    bored now

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    Don't know how to break it to you but while you thought you were using an umbrella I think you were actually an unwitting member of a Tax avoidance scheme.

    You really should name the umbrella so we can point you in the direction of the appropriate thread in the https://www.contractoruk.com/forums/...eme-enquiries/ forum.
    merely at clientco for the entertainment

  5. #5

    Some things in Moderation

    cojak's Avatar
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    And you need to find out who your umbrella really is and if necessary leave them immediately.

    Read this to find out more: How to choose a legitimate umbrella
    "I can put any old tat in my sig, put quotes around it and attribute to someone of whom I've heard, to make it sound true."
    - Voltaire/Benjamin Franklin/Anne Frank...

  6. #6

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    Quote Originally Posted by NotAllThere View Post
    The tax is due, regardless of your tax code. Have you talked to HMRC and requested time to pay - or even if the debt can be collected via your tax code, or at least some of it. It obviously won't remove the interest required, but it should mitigate it.

    As far as a legal case, my guess is probably not. But you could try and maybe you'll get a settlement to make you go away.
    I don’t dispute that the tax is due. Yes, spoken to HMRC and they won’t collect under revised codes because the debt is too large (over £3k).

  7. #7

    Contractor Among Contractors

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    Which umbrella?
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    Former member of IPSE.


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  8. #8

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    Quote Originally Posted by Major Hassle View Post
    So you had no idea you were paying £27,500 less tax than you should have been in a single tax year..........
    Yeah, helpful Major Hassle. Perhaps read the post properly and reply only if you aren’t just smugly judging my situation?

  9. #9

    bored now

    eek's Avatar
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    Quote Originally Posted by wattaj View Post
    Which umbrella?
    Can I correct that

    Which tax avoidance scheme masquerading as an "umbrella"?

    To give us the best advice we can we really do need to know at least the name of the umbrella so we can identify who is responsible and point you at appropriate experts.
    merely at clientco for the entertainment

  10. #10

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    Quote Originally Posted by eek View Post
    Don't know how to break it to you but while you thought you were using an umbrella I think you were actually an unwitting member of a Tax avoidance scheme.

    You really should name the umbrella so we can point you in the direction of the appropriate thread in the https://www.contractoruk.com/forums/...eme-enquiries/ forum.
    Legitimate, well known umbrella co, with good recommendations from senior people I trust. They are accredited members of the FCSA.

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