Company mis-filed my taxes

[camel]

Company I work for screwed up my taxes.

For several months last year (2005) I paid no tax because (as I found out today) the payroll lady mistakenly put my band cut off, i.e. 28600 approx into my tax credits/tax free allowance (which I suppose should be max 3000) on the payroll system.

Obviously I knew that something was up so I told her there must be something wrong. She just said she simply put the figures into the system and the system told her zero tax. She advised me to contact revenue and have them issue some certificate to the company. I did this (I assume the certificate was received).

I let the matter drop there as from the start of this year the tax did indeed start coming out, and I also assumed I was repaying tax for the times when I didn't have to pay any.

This month I decided to quit and strike out on my own. So my accountant looked at my P60 from last year and instantly noticed the glaring mistake. So I'm now faced with a huge tax bill, I assume 15,000+, because of a payroll mistake in my company that I did bring to their attention.

Any advice?

 

[ClubMan]

For several months last year (2005) I paid no tax because (as I found out today) the payroll lady mistakenly put my band cut off, i.e. 28600 approx into my tax credits/tax free allowance (which I suppose should be max 3000) on the payroll system.

Obviously I knew that something was up so I told her there must be something wrong.

At the time? After checking your payslips?

She just said she simply put the figures into the system and the system told her zero tax. She advised me to contact revenue and have them issue some certificate to the company. I did this (I assume the certificate was received).

A tax deduction certificate perhaps? This should be issued to your employer allowing them to correctly calculate deductions based on your latest statement of tax credits.

I let the matter drop there as from the start of this year the tax did indeed start coming out, and I also assumed I was repaying tax for the times when I didn't have to pay any.

Keeping your tax affairs up to date is ultimately your own responsibility no matter what your employer does.

This month I decided to quit and strike out on my own. So my accountant looked at my P60 from last year and instantly noticed the glaring mistake. So I'm now faced with a huge tax bill, I assume 15,000+, because of a payroll mistake in my company that I did bring to their attention.

Any advice?

Your accountant is best placed to advise you on settling any outstanding liabilities in the most cost effective way.

 

[camel]

Yeah, I told her at the time that I wasn't being taxed, she didn't physically look at my payslips but did check the 'system' and told me everything seemed to be calculated correctly.

I agree that my tax is ultimately my own responsibility, and I realise I'll have to settle the bill. My accountant is on the case and will know tomorrow how much I'll have to write a cheque for (which I don't have...will need to call to the bank).

I'm just airing my gripe. One of the advantages of working PAYE is that it's someone elses jobs to deal with all this stuff.

Should I send the company my accountancy bill!?

 

[ClubMan]

One of the advantages of working PAYE is that it's someone elses jobs to deal with all this stuff.

Not always true. PAYE employees still have to ensure that their tax affairs are up to date and double check that Revenue and their employers have and act on all relevant info.

 

[ubiquitous]

(I assume the certificate was received).

Never, ever assume anything when you are depending on the Revenue (or indeed any other State agency or govt dept to do something for you.

As Clubman says, you are ultimately responsible for your own tax affairs. It must have been obvious to you that there was something fundamentally wrong with your net pay given that your monthly PAYE deduction suddenly fell from approx €1250 (€15000/12) to zero.

If your employer had overpaid you by mistakenly adding an extra zero to your monthly pay cheques, then you would have had a moral and legal responsibilty to (1) alert them to the error; and (2) refund them the overpayment. This applies regardless of whether or not you spent the money in the meantime. Frankly, I don't see any difference here.

 

[camel]

Ok, maybe I didn't make myself clear. I did alert the company to the fact that my tax bill had gone to zero. Is it them still my responsibility to seek the services of an accountant (not every joe soap knows the ins and outs of the Irish tax/paye system believe it or not, or even that revenue cannot be trusted to sned certificates they have promised to...) even though I'm working for a reasonably sized company with a payroll function.

As I also said in my original post I know that the final bill is my responsibility.

 

[ClubMan]

Ok, maybe I didn't make myself clear. I did alert the company to the fact that my tax bill had gone to zero. Is it them still my responsibility to seek the services of an accountant (not every joe soap knows the ins and outs of the Irish tax/paye system believe it or not, or even that revenue cannot be trusted to sned certificates they have promised to...) even though I'm working for a reasonably sized company with a payroll function.

One way or another it is your own responsibility to make sure that your tax affairs with Revenue and your employer are kept up to date and to take whatever steps are necessary to rectify matters if this is not the case. Just notifying Revenue and the employer and leaving it at that is not necessarily the solution. Also it's not necessarily the case that an accountant would be required in a case like this.

 

[Satanta]

Is it them still my responsibility to seek the services of an accountant

No. Obviously not. But it is still your responsibility to ensure your tax situation is correct. If you believe you need an accountant to do this (or potentially to save you money on your tax bill) thats a decision for you to make.

The mistake by your employer hasn't left you out of pocket, you simply repay what you should have paid in the first place. (Open to correction here, but if it's a large bill you can't cover straight away Revenue may be open to adjust your tax cert to recoup the payments missed??? Hopefully someone with experience/knowledge of this may be able to clarify)

 

[ClubMan]

(Open to correction here, but if it's a large bill you can't cover straight away Revenue may be open to adjust your tax cert to recoup the payments missed??? Hopefully someone with experience/knowledge of this may be able to clarify)

Yes - Revenue may do that especially if attempting to collect it in one go would cause the taxpayer hardship. However isn't the original poster going self employed so this may not be an option?

 

[Satanta]

However isn't the original poster going self employed so this may not be an option?

True. That (important) detail slipped my mind as I read through the thread, hopefully it might be of benefit to someone else (at least now that it's confirmed).

Out of interest, any way a non-PAYE employee can deal with (non) payments in a similiar manner?