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EXCLUSIVE: Tax shock for thousands of Asda workers

EXCLUSIVE: Tax shock for thousands of Asda workers

Tens of thousands of supermarket workers across the UK have been hit with a tax bombshell because of a “quirk” in Asda’s payroll system.

Staff across the country, including more than 1,000 employees in Tayside and Fife, have received final demands from HMRC for outstanding tax bills ranging from £72 to £160 because they all underpaid income tax last year.

Assuming each employee only has to pay back the minimum amount, then Asda across the UK will have to give more than £12 million back to the taxman.

The problem arose because of the way the supermarket giant which has just opened a new branch in Dundee and employs more than 1,000 people in the city pays its 170,000 UK staff.

Employees receive their pay every four weeks. This means that once every 20 years they are paid 14 times a year rather than 13.

PAYE (Pay as You Earn) tax contributions were not collected in the extra pay, meaning employees had, through no fault of their own, paid less tax for the year than they should have.

Employees began receiving letters from HMRC demanding they settle their tax bills last week.

Although workers will not be out of pocket as they received money that should have been taxed last year some have claimed that, as the fault originally was Asda’s, it is the supermarket that should settle the outstanding debts and not the workers who have suddenly been landed with bills.

One posted on Twitter: “ASDA HQ genuinely have messed up on this one.”

A second added: “An Asda error? Very very poor from them, Last thing the poorly paid staff need is a £100-plus tax bill.”

An Asda spokeswoman said all of the company’s UK employees had been affected.

She said: “Asda colleagues are paid every four weeks rather than every month. Due to a quirk in the calendar that only happens once every 20 years, our colleagues were paid 14 times between April 6 2012 and April 5 2013 (the 2012/13 tax year) rather than the usual 13 times.

“This situation arises every so often for all companies that operate a four-weekly pay cycle. We communicated this HMRC issue to our colleagues in May and again this month.

“People service managers are on hand in our stores and head office sites to explain the process but we encourage any colleague that is still unsure about their tax position to contact HMRC directly.”

HMRC said it could not comment on individual cases.

Asda is owned by the American company WalMart.For the latest on this story, see Thursday’s Courier or try our digital edition