Why do HMRC take so long to tell me my tax code is wrong and I owe them money?
HMRC aren't able to let you know that you've paid the wrong amount of tax through your PAYE income because they have to wait to the end of each tax year to find out! To be fair to them, they cannot possibly let you know any earlier!
Always ensure that you act upon the PAYE coding notices that HMRC issue to tax payers. Of course, it's frustrating that these 'tax bills' come through the door - especially when they're unexpected. After all you gave all your information to your boss(es) so you can't actually see how it wasn't correct in the first place.
The tax year runs from 6 April - 5 April.
When starting a new job, say your first job during the tax year - you wouldn't have a P45 to pass on to your employer as you haven't left any jobs during this tax year (yet). Ideally you should just have to complete a P46 with your new employer and HMRC should put you on the tax code 944L (currently during the 2013/14 tax year).
If you are starting another job during the tax year, then your previous employer should issue you with P45 certificate. A P45 certificate shows you how much you have earned and how much tax you have paid during the tax year (so far). The new employer then uses this P45 (after of course, you have filled out the trusted P46 with the new employer) to see what tax code you were on previously but more importantly to show how much you have earned/tax stopped during the year.
If HMRC do not have any of this information in a timely manner then it can mean that you are either under/over paying your tax. This is why they must wait until the end of the year to calculate it all, unless of course, you have called them on 0300 200 3300 to find out what is going on!
Always remember, that although you only really go to work to earn money, and not actually work out your own tax code, HMRC deem it the tax payers responsibility to ensure it's correct.
Don't even get me started on the poor people that have been employed with the same company for years, but have taxable benefits (medical, cars, fuel etc) and they still end up with under payments year in year out!
P.S. The perk is that HMRC do allow you to pay it over your future PAYE income, and don't demand it back straight away! of course though - there are time limits!