Boulder to London

I was reminded late last week of something on old boss of mine at GE used to say when approached by people asking for a pay raise.  He’d say, “If you want to discuss your salary, I’m more than happy to, just realise the number can go both up and down”.  This was usually enough to end most of the discussion fairly quickly and probably saved him a lot of time over the years.

While my recent experience wasn’t with my boss, it had a direct impact on my paycheck.  Here’s what happened….

About two months ago, one of my colleagues was on the phone to the equivalent of the IRS in the UK, called the HMRC (Her Majesty’s Revenue and Customs).  When she finished the discussion, she looked over at me and said, “You should really call this number”.  She had just been in a discussion with the HMRC and had realised that she had overpaid taxes and was going to get a 500 GBP refund.  As a bit of backround information, most people are not required to file a tax return in the UK, so I’m not exactly sure how one knows if they have paid too much or too little taxes.  However, in your first year of employment, if you do not work a full year (as she hadn’t), you may be taxed as if you are going to earn your basic pay for 12 months, when in fact you earn it for something less than that and therefore, may pay too much tax.  Since I started in July and the tax year runs April to March, I figured there was a chance that I too paid extra taxes.  I was quite happy as I called the number and found a very friendly person.  I gave them my details and they said they would be glad to send me the form to complete to evaluate my situation.  Great I thought…a refund just in time for Christmas!

Well, I got busy before Christmas and didn’t get the form mailed until sometime after the first of the year.  I didn’t think much of it until a few notices from the HMRC showed up last week.  They were just basic information that provided a few codes that had changed given the updated information.  It wasn’t until Friday, when I got my January paycheck that I noticed something was wrong.  My paycheck was significantly lower than expected.  Since I was on the road in Rome, I couldn’t investigate directly, but had our HR person start to look into it.  The report back from her was that everything was calculated correctly and since she didn’t have access to my past pay stubs, she couldn’t do a comparison to see what had changed.  I figured it had to be the tax line as everything else seemed to be correct.  The mystery was quickly solved when I got home on Friday night and found another letter from the HMRC saying that I had underpaid in the previous tax year by almost 2,000 GBP and that they would be collecting this in the current tax year.  Since there are only three paychecks left in the current tax year, they took the amount, divided by three and made the deduction…I guess next time I’ll heed my boss’ warning before going to speak with the tax man!