How to resolve an error with my PAYE income tax reporting

Question

My employer seems to have made a mistake when totalling the income tax on my 22-23 payslips and ultimately my P60 - I have found the month where this occurred, where the year to date tax column was not updated by the full amount of tax paid that month - this was then carried forward onto every subsequent month and onto my P60 at the end of the year. Now HMRC are asking me to pay this discrepancy.

I initially asked my employer if they could resolve the issue but they said I needed to contact HMRC. HMRC have told me it's up to my employer. Who's right and is there something I can say to them e.g. a form I need to ask for, that will send them in the right direction to helping me?

Answer 1

I think the employer is in the best position to help. They certainly can fix it, they just need to issue a replacement P60.

You could also push HMRC more. If you self-assess, you could just enter the correct figures on your tax return and include a note in the section at the end about what happened. If you don't self-assess, then try posting HMRC a copy of all your payslips and ask them to fix your tax calculation. If you are correct, they should have records showing they received the right amounts from your employer.

Answer 2

Your employer should pay your salary minus PAYE to you, and PAYE to HMRC. If they calculate PAYE too high / too low, then they should pay less money / more money to you, and more money / less money to HMRC. So you do your tax return, and you HMRC pays you the tax that was overpaid, or asks you for the tax that wasn't paid, which is inconvenient but you don't actually make money.

HOWEVER if the company paid you the right amount, and paid too little to HMRC, then the company needs to fix that. Because if you fix the mistake and pay HMRC, then you lose money.