PAYE Fiasco update - Summary of how to fight your case

Discussion in 'PAYE letters 2010' started by [email protected], Feb 9, 2011.

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  1. elainec100@cheapaccounting

    [email protected] UKBF Newcomer Full Member

    13,268 2,882
    In recent weeks HMRC have issued further demands for underpaid PAYE relating to 2007 / 2008.

    In addition they have been heavily criticised by the Accounts Committee for how they have handled this whole situation.

    You can read more of the criticism here:

    Whilst of course I agree with the criticism what I find ridiculous is that a policy decision has not been made to write off the underpayments for previous tax years and start doing things right from the current tax year.

    We have handled many cases so far with demands from £1,00 up to over £9,000.

    Our experience to date is ...

    · HMRC are taking an excessive amount of time to respond to correspondence – they are struggling with the number of cases

    · They are not being consistent in their approach – cases with similar backgrounds are having tax written off whereas other similar cases are having to proceed to complaints

    · HMRC will often reject the ESC A19 but write off the tax on a compliant

    · Their approach is to demand the tax without listening to facts

    · The tax payers believe that HMRC had all of the correct information in order to calculate the tax at the time – not several years later

    · HMRC MUST have had the information as they have worked out the underpayments now due!

    The whole situation is one of the worse I have seen HMRC handle.
    It is causing untold stress and anxiety to all those receiving these demands.

    Whilst I cannot alleviate the stress and anxiety I can provide some practical help in the way of suggesting how to manage the response to the demands received.

    Here is my advice on how to deal with your letter from HMRC …..

    Stage One
    I am not going to re-invent the wheel on letters to send to HMRC regarding the underpayments of tax.

    The Low Incomes Tax Reform Group has prepared sample letters and these can be found on the Guardian Web Site here:

    (I shan’t copy them in case of copy right).

    The first thing is to work out which category you circumstances fall into and use the relevant letter from the site to match your circumstances:

    1.Did HMRC know about your additional income because they had been told by you or by the payer of the income e.g. DWP for Incapacity benefit, NHS for pensions etc

    (but see my note below)

    2.Did you provide the correct information to your employer and they have made an error

    3.Do you need the underpayment adjusted because it is incorrect

    4.Do you need your underpayment explained

    5.Do you need to complain because HMRC have not handled your case at all well

    From what we are seeing so far a lot of cases fall into the first category.

    Add this to the standard letter where it applies
    I would use the sample letter provided but add something to it.
    Just before the final line of

    “I look forward to hearing from you.”

    Add this paragraph in bold, red letters:
    I refer to the attached letter demonstrating that you have applied the ESC A19 to a case of very similar circumstances to mine. In this letter you state “.. we should not ask you to pay the tax underpaid …” and you have written off the tax due. I ask that you apply this precedent that you have set to my underpaid tax:

    Download and attach am copy of this to your letter:

    Download letter from here.

    Stage Two
    If HMRC rejects the write off then do not give up.

    The next stage is a compliant.

    Here is the text for your complaint letter ...

    Dear Sir

    Your Name here
    National Insurance Number – your NI number
    HMRC reference number – the reference on the letter

    Thank you for your letter of (enter the date that the rejection letter was sent from HMRC).

    I would like to raise a formal complaint regarding this matter as I think that the ESC A19 does apply.

    You were well aware of my various sources of income as you have used the information previously provided to calculate the underpaid tax.

    Given this I feel that you should apply the ESC A19 because:

    Exceptional Circumstances
    In exceptional circumstances, arrears notified less than 12 months after the end of the relevant tax year may be considered where both of the following apply:

    * HMRC failed more than once to make proper use of information received about a source of income

    * HMRC allowed tax arrears to build up over two whole tax years

    The above clearly applies to my situation.

    I am aware of various cases where you have written off the underpaid tax due. Having set a precedent for the write off, I formally request that you apply the same treatment to my underpaid tax and that the full amount is also written off.

    Can you please:

    • · acknowledge receipt of this complaint letter, by return

    • · advise me of the complaints procedure and how long it will take for you to review this matter

    • · let me know your outcome and the reasons for reaching your decision
    I look forward to hearing from you and hope that this matter can be resolved very quickly.

    Yours sincerely

    Stage Three

    If that doesn’t work do get in touch with us at:

    [email protected]

    A Plea from me to you ...

    Can you please tell me if you do get your tax written off as a result of the above.

    This helps us to build up a list of examples and use this to help others!

    Thank you
    Posted: Feb 9, 2011 By: [email protected] Member since: Nov 4, 2005
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