No 2018 tax cert & payroll never adjusted for 2018

CR1272

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First time poster alert!

Don't know where to start with this. Please forgive the long post.

My employer recently informed me that they had overpaid me in my January 2019 payroll, and would have to take back the overpayment in February (400+ euro worth). This was because with the new real-time revenue, a change in the way my tax credits are allocated had been flagged, but this wasn't applied to my January payroll. In addition, my net salary was also down 400 euro.

When I went investigating why the tax credit change had occurred (as neither I nor my wife had requested this), I discovered that I had no 2018 tax cert, and neither did revenue. I effectively wasn't employed for all of 2018 as far as revenue are concerned, and my personal tax credit had automatically switched to my wife in January 2018. My wife's 2018 cert didn't have my employer listed either.

But, because there was no 2018 tax cert issued, my employer never knew about the change in the tax credit allocation, and as a result, for ALL of 2018, I was still being paid on the 2017 basis, where I had my 3300 tax credit. And my wife was being paid on the basis of my personal credit having been switched to her (4950 credit).

This has left us with a tax underpayment to the tune of about 5100EURO, and my net salary being reduced by 400 going forward. (This is as a result of the tax bands, and is not a recalculation to payback revenue.)

On ringing revenue, they informed me that I had been "ceased" on their records at the start of 2018, and this triggered my personal tax credit switching to my wife. They said this was probably caused by a "Christmas Day Employment" record being added to my revenue record, which seems to be a 1 day employment record. I have no idea why that would happen, or what it is, and revenue don't know why it happened either (according to the chap I spoke to).

So, through no fault of my own, I am now left owing revenue 5 grand.

My question is not about the figures, as that all makes sense. My question is about who is to blame. I know ultimately, revenue will say it's up to me to make sure my tax is correct, but should this have been noticed by my employer? I'm not sure how they would know if they never received a tax cert? Should they have questioned why I never received a tax cert? Should the quarterly p30s have flagged this within revenue, as I would have been on them when they were returned by my employer, but if revenue thought I wasn't employed, should that have been flagged?

Has anyone heard of this type of thing happening before?

Again, sorry for such a long post. I hope I have explained the situation!
 
I really sympathise with your situation.

The 2 main people at fault here.

You- the revenue write out to you every time there is a change to your tax credits. This should have been flagged to you. Did you and your wife not notice a large change in net pay?

Your employer- Your employer should be regularly checking your tax credits. At an absolute minimum they should be checked before running the January and December payrolls. They would of also been notified when your credits were changed by email from the revenue. It is a 30 second job to download the changes from ROS and upload to a payroll package. Quarterly P30s from 2018 would of not have captured this but your P60 for the year should have. I would also question if it was them who made you "ceased" to the revenue. Did you have multiple employers in 2017/2018?

Unfortunately as the money is owed there is no way out of paying for it. Make 100% sure that the figure of €5,100 owed to the revenue is correct by asking for a P21 balancing statement for you and your wife. You could ask the revenue to extend the payment term and reduce the monthly amount but aside from that there isn't much else that can be done.
 
After you get the P21 revenue will most likely alter your credits for 2019 to spread the payment out over the year. They will probably state that on the P21 and notify your employer
 
Thank you both for your replies.

My wife's salary went up a number of time through 2018, so the change in her getting my credits was lost in her increased salary in the same month. Perfect storm, and something we've both learned a hard lesson from!

My employer says they never received any notification of the change in the allocation of the tax credits, and this makes sense if I have no tax cert for 2018. Revenue thought I had ceased employment, so one was never sent. As my employer didn't get it, they had no reason to alter my credits from the 2017 tax year.

My 2018 P60 says I have 3300 tax credits. My wife's says she has 4950, but obviously my employer wouldn't see my wife's P60, so notice that issue with the credits :(
 
Your employer should be downloading an up to date copy of employees tax credits every payroll run. There are 8 employees in my office and there were 5 changes in tax in 2018 which needed to be updated. The revenue notified me by email each time. You could go on a fact finding mission to find out who is to blame but it will still end up with you having to pay the revenue back the money so I would suggest you focus your attentions on the amount due and managing your tax credits through myaccount going forward.

Assuming both you and your wife earn over 35k the €5,100 figure seems high.

€1,650 from your personal tax credit and an increase of €9,000 for the 20% (€1,800) lower tax band = €3,450 underpayment.

Have you requested a p21? PWC have a good tax calculator too which will help with the figures. https://download.pwc.com/ie/budget-2019/income-tax-calculator.html
 
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