I have clients, who are company directors and get paid salaries by their companies. From time to time, they will be offered salaried work and they will stop working for their own company. I will give them a P45 for their new employer. Recently after working 2 months elsewhere, a client decided he didn't like working for someone else and left. He sent me the new P45, and I set up a new payroll record so he could start working for his company again.
Another 2 months pasted and I got a new coding notice BR W1/M1 for the new employment for the employer. For anyone who does not know - this means that each month they have no personal allowance to apply against that months pay. 20% of the amount due that month is deducted at source as Income Tax and has to be paid by the employer to HMRC. As the employers agent I can not do anything about it, but as the employees agent I can, even though HMRC will not have notified the employee yet. It will be another month before they find out.
So as the employees agent, I rang HMRC to find they had no record of the employee leaving his company payroll. I had the RTI submission from 4 months earlier in front of me, so I knew it had been done. I confirmed all the details, and that I had received a P45 from the other employer before adding my client back onto the payroll again. Funny this, I am speaking as the employers agent now!
The good news is the person I spoke to said they could sort it out straight away. It was good to speak to someone who knew what to do. But why did I have to ring HMRC to correct something that RTI was supposed to stop? I now have to let my client know that they will receive a wrong coding notice, and after intervention from me, they should receive a correct one later. In the meantime I will ignore the new coding notice as HMRC confirmed on the telephone, that the tax code I had been using was correct.