Agency deducted c.£4k tax from payslips that HMRC never received
Need some advice please because I’m not getting to the bottom of it with my agency, and I’m worried I’m not going to get my money back.
I work for a local authority through an agency but they have nothing to do with payroll - the agency handles all pay through approved timesheets. All timesheets were submitted and approved on time.
For my first 9 weekly pay periods, around £700-£800 income tax was deducted each week from my payslips. However, HMRC/Government Gateway only showed ONE of those weeks reported, that being the last week of the 9 week period…
Example of Wk9:
- Payslip:
- Gross: ~£2.4k
- Tax deducted: ~£818
- NI: ~£87
- HMRC / Gov Gateway for same week:
- Same gross
- Tax showing: ~£336
- Same NI
So the NI matches perfectly, but the income tax doesn’t.
HMRC also confirmed my employment start date was submitted around 2 months late, which explains why the earlier weeks are missing entirely from their system.
The agency keeps saying:
- my net pay is “correct”
- the missing amount belongs to HMRC, not me
- once they upload the historic weeks, everything will reconcile
But I cannot get a straight answer to the actual question:
If they deducted c.£818 from me, but HMRC only received/shows c.£336 for that week, where is the remaining c.£482 currently sitting?
What’s making me more uncomfortable is:
- all pay AFTER those first 9 weeks suddenly became correct
- HMRC and payslips now match exactly
- communication has been awful for nearly a month since raising this
- they aren’t being forthcoming with historic payslips, information or status updates
- HMRC told me they cannot refund money they never received
I’ve worked in finance/accounting for 8 years and every payroll I’ve ever had has matched Government Gateway penny for penny, which is why this feels so wrong to me.
I also understood it to be a legal requirement that what is reported to HMRC matches the payslip figures. So if the original payslips were wrong, surely they would need corrected payslips and corrected RTI submissions rather than just saying “it’ll reconcile later”?
At this point I’m convinced HMRC don’t owe me this money because they don’t actually have it. In addition to HMRC agreeing with me on the basis of the salary, calculations and information provided.
Has anyone dealt with something similar with PAYE/RTI/payroll corrections? Especially through agencies?
In my situation - please can you advise what I am best placed to do? Do you believe the money is with HMRC or the agency?
Thank you