Post your case here

[elaine@cheapaccounting]

Come on chaps - let's keep this on track.

The law is clearly there - income and taxes act.

If we want FREE public services then we should have to pay tax.

However the issue being argued here is we pay it at the time - not several years afterwards.

 

[GaryMc]

Apologies Elaine - this last bit probably should be moved to the Time Out section. If any of the mods can move the last few posts then we can get the thread back on track

 

[inditime]

My case:
Happily going about my work and life, then HMRC send me a P800 dated 27Dec2010. I have 2 incomes, normal full time PAYE, and my RN pension.
Code 614L on pension, BR on full employment.

I received the P800 on the 7th Jan 11, FY2008-2009, £3381.

I read your advice and sent letter 1 via post.

Then on 1 Feb I received a new PAYE coding notice for year 2011-2012.
BR for full employment, and 221L for my pension. Clearly HMRC has gone against it's own rules and applied automatic recovery via PAYE to my tax code for a payment which is over £2000.

Then I got a demand for payment on 10 Feb tp be paid in full. How can they demand payment and recover the cost via PAYE at the same time? Obviously another HMRC fubar.

I have tried to ring them as I have until 10 Mar to pay this demand. Never managed to speak to anyone as I get the standard recorded message and asked to try again later, the call ends automatically.

I receive a standard response letter from my first Letter 1 on 21 Feb.
They tell me that they are correct and that I must still pay the outstanding amount on the P800.

23 Feb, I respond to there response with Letter 2, complaint letter including the remitting example.

1 Mar, Im still waiting for a response, and still not able to get through on the phone.

I would suggest I write a letter to query my PAYE Coding Notice of 221L and the fact that I am awaiting a response before I consider my next action on the P800 demand. How long can I hold out after 10 Mar without paying?

Any suggestion or help on my next move would help .

Thanks in advance.

Inditime.

 

[Nicolai]

My case seems fairly straight forward:

> 3 P800s received on 24th Feb for 2007-08, 2008-09 and 2009-10, with a total underpaid of £2232
> I joined my current employer in Jan 2008 and it looks like I was on BR until a change was made in April 2010. I've already slapped myself for not spotting this, however I don't recall receiving a change of tax code letter.
> I believe I handed in my P45 early on, but have no proof of this.
> No indication of when or how I'm expected to pay this.

Do I have a case under ESC A19 for HMRC failing to take reasonable action / 12 month rule, etc. or should I be lobbing this back to my employer as their mistake?

Any help greatly appreciated.

 

[Tom McClelland]

My case seems fairly straight forward:

> 3 P800s received on 24th Feb for 2007-08, 2008-09 and 2009-10, with a total underpaid of £2232
> I joined my current employer in Jan 2008 and it looks like I was on BR until a change was made in April 2010. I've already slapped myself for not spotting this, however I don't recall receiving a change of tax code letter.
> I believe I handed in my P45 early on, but have no proof of this.
> No indication of when or how I'm expected to pay this.

Do I have a case under ESC A19 for HMRC failing to take reasonable action / 12 month rule, etc. or should I be lobbing this back to my employer as their mistake?

Any help greatly appreciated.

I'm not sure that I understand this. If you were on BR from Jan 2008 to April 2010 then how did you underpay tax in those years, unless you're a higher rate taxpayer, in which case the error would have come out in your Self Assessment return?

What mistake do you think your employer might have made? Employers should just operate tax codes as instructed by HMRC. They don't have any discretion. If an employer (and payroll operators are only human) makes a mistake in your tax code for some reason, it should be automatically detected by HMRC in the employer's year-end P14 return for you.

 

[elaine@cheapaccounting]

I'm not sure that I understand this. If you were on BR from Jan 2008 to April 2010 then how did you underpay tax in those years, unless you're a higher rate taxpayer, in which case the error would have come out in your Self Assessment return?

What mistake do you think your employer might have made? Employers should just operate tax codes as instructed by HMRC. They don't have any discretion. If an employer (and payroll operators are only human) makes a mistake in your tax code for some reason, it should be automatically detected by HMRC in the employer's year-end P14 return for you.

Tom - with respect this is not the case that HMRC detect an incorrect BR code.

I have a case last week - higher rate tax payer, no additional income therefore no need for SA. Put on BR code. New code sent from HMRC - they failed to apply.

The tax payer has been told by HMRC that they will seek repayment from the employer for the error

 

[elaine@cheapaccounting]

My case seems fairly straight forward:

> 3 P800s received on 24th Feb for 2007-08, 2008-09 and 2009-10, with a total underpaid of £2232
> I joined my current employer in Jan 2008 and it looks like I was on BR until a change was made in April 2010. I've already slapped myself for not spotting this, however I don't recall receiving a change of tax code letter.
> I believe I handed in my P45 early on, but have no proof of this.
> No indication of when or how I'm expected to pay this.

Do I have a case under ESC A19 for HMRC failing to take reasonable action / 12 month rule, etc. or should I be lobbing this back to my employer as their mistake?

Any help greatly appreciated.

yes send a letter two in my example, stage one here ...

http://www.cheapaccounting.co.uk/blog/?p=1436

 

[Tom McClelland]

Tom - with respect this is not the case that HMRC detect an incorrect BR code.

I have a case last week - higher rate tax payer, no additional income therefore no need for SA. Put on BR code. New code sent from HMRC - they failed to apply.

The tax payer has been told by HMRC that they will seek repayment from the employer for the error

Interesting, so HMRC has a system that detects that the employer received the P6 letter! Clearly far easier for HMRC to have a system that operates using telepathy to detect postage received by employers than it is for them to simply check every P14 against the tax code that they've instructed.

My guess is that "seek repayment from the employer" is code for "forget about it".

 

[Tom McClelland]

Furthermore, thinking about it, with higher rate taxpayers the problem is systemic, not administrative. There is no set of tax codes that can reliably be given to a higher-rate tax payer with multiple jobs that will deduct the correct income tax at source, unless HMRC can foretell the future and knows exactly how much income will be received by the taxpayer in each job for the entire year in advance... BR and D0 are too blunt instruments for that.

 

[elaine@cheapaccounting]

Interesting, so HMRC has a system that detects that the employer received the P6 letter! Clearly far easier for HMRC to have a system that operates using telepathy to detect postage received by employers than it is for them to simply check every P14 against the tax code that they've instructed.

My guess is that "seek repayment from the employer" is code for "forget about it".

They have a system that says that they sent the P6 - yes. I agree about no proof of receipt but in any case it is hardly the employee’s fault that this was no picked up.

What they don't do is ..

• Reconcile the tax each year for under payment
• Pick up underpayments in a timely fashion for immediate action so as not to cause long term hardship
• Look at common sense issues such as pay over higher rate threshold having a BR code applied
• Check before sending the P800 demand that they or the employer hasn’t cocked up
• Avoid wasting tax payers’ money trying to collect tax that isn’t due

Shall I go on?

Sorry not having a go at you Tom – I think we are ‘on the same side’.



I get very frustrated about the lack of common sense applied by HMRC in this – the cases are beginning to get to me as some of the stories where demands are being made are terrible.



Moreover HMRC are taking months to respond to letters but are very quick to send out demands before they have looked at the appeals – se today’s Daily Mail ...

Pensioners given days to meet shock tax demands

Read more: http://www.dailymail.co.uk/money/article-1361990/Pensioners-given-days-meet-shock-tax-demands.html#ixzz1FQV3FrMp

 

[elaine@cheapaccounting]

Furthermore, thinking about it, with higher rate taxpayers the problem is systemic, not administrative. There is no set of tax codes that can reliably be given to a higher-rate tax payer with multiple jobs that will deduct the correct income tax at source, unless HMRC can foretell the future and knows exactly how much income will be received by the taxpayer in each job for the entire year in advance... BR and D0 are too blunt instruments for that.

Totally agree

So how come the P14 submission doesn't go BR code applied to salary over higher rate threshold - wrong!


Should software check for this?


Whatever way you look at it – if the system is wrong can the employee be held liable for underpaid tax.


Unless we except everyone to fully understand the tax system in the UK then this can’t be something that Joe Public can reasonable expect to understand.


If we want everyone to be responsible for their own tax then we need to go the way of the US and everyone files an annual tax return.


Is that what needs to happen?


Would everyone really want this?

 

[Tom McClelland]

I'm sure that we're exactly on the same side. But I'm disturbed by the "go for the employer" implication as it also seems grossly unfair. Assuming that the employer *did* receive the P6 (and even if it reached their building it might not get in front of the payroll operator) anyone can make a mistake, and it is a mistake that didn't benefit the employer by one single penny. In fact the immediate beneficiary was the employee who faced a lighter tax burden. To expect the employer to be financially responsible for a multi-year slip-up that benefited the employee and that HMRC has had years to *easily* spot and correct seems as unnacceptable to me as going after the employee for the money; not at all something to be pleased about.

Just my 2p.

 

[elaine@cheapaccounting]

Yes it is as unfair to expect the employer to pay as it is for the employee to pay

The rules are there though and all I can do is advise those who have an underpayment to follow them.

see the Guardian ..

http://www.guardian.co.uk/money/2010/sep/07/tax-error-letter-templates

I am sure that we both can agree that all of this could have been picked up by HMRC well before - if it had been we would not be having this debate would we

 

[toniyoung]

I have another case where the taxpayer has an employment as well as a state pension and some other private pensions.
None of the pension income has been taxed in 08/09 or 09/10.
Can we appeal under ESC19A against the tax on the state pension on the basis that HMRC had the information etc....?
What about the private pensions?
Would be grateful for opinions/ similar cases.

 

[elaine@cheapaccounting]

I have another case where the taxpayer has an employment as well as a state pension and some other private pensions.
None of the pension income has been taxed in 08/09 or 09/10.
Can we appeal under ESC19A against the tax on the state pension on the basis that HMRC had the information etc....?
What about the private pensions?
Would be grateful for opinions/ similar cases.

yes - use letter one on the blog Toni

They must have had the info - how else did they calc the underpayment

 

[HeatherDorset]

I have a teacher's pension and a part time job with the NHS. These are my only two sources of income.

2008/09 - £3,397
2009/10 - £4,458

I retired 5 years ago and although I am a higher rate taxpayer, I had always thought that things were correct. I tried to ask the Revenue to take ESC A19 into account, but they have rejected this argument twice. In my last letter to them, I asked for it to be reviewed by an adjudicator, but they simply said that ESC A19 didn't apply and I should make arrangements to pay the outstanding amount. They did not mention whether it had been looked at by an adjudicator.

Is it worth using your templates and making a complaint about it now? I feel that I have reached the end of the road and maybe should pay the tax (somehow!).

Thanks for any pointers.

 

[elaine@cheapaccounting]

Is it worth using your templates and making a complaint about it now? I feel that I have reached the end of the road and maybe should pay the tax (somehow!).

Thanks for any pointers.

Yes use the complaints letters - mark it formal complaint.

They have to response to a formal complaint as explained here..

http://www.hmrc.gov.uk/complaints-appeals/how-to-complain/make-complaint.htm

 

[elaine@cheapaccounting]

BTW keep an eye here as we may have some more important press coverage on this next week

 

[jrs101]

Hi

I received a P800 at the weekend saying i owe about £1250 for 2007-2008.

Can anyone help as to what I should do.

I have seen your link for letter templates but not really sure what option I should pursue.

One source of income for 2007 (contracting) and then PAYE from Dec 2007 up until present day.

HMRC are saying I need to provide them with company names I worked for from April 07 until Dec 2007.

Is it unlawful/unfair to request this money back as it relates to 07 (despite the fact it may or may not be right)?

thanks

 

[Tom McClelland]

This doesn't sound like a run of the mill case like some of the others.

Did you correctly report your 2007 contracting income at the time? Presumably either as a sole trader or as a limited company? If you were paid in 06-07 through a limited company do you know if it correctly filed P35/P14 for your earnings at the time?

If the answer to those questions isn't "Yes" then it may not be unreasonable for HMRC to want to look back at that year, if it has now discovered that you had income then. But if everything was correctly filed and reported at the time then you probably have a strong case.

 

[bigbadal]

Hi, should I pursue this....

Calculation letter received Feb 2011 ( a couple of weeks ago).
For 2007-2008 and underpaid amount of about £860. This was for medical and travel insurance for me and my family (a benefit in kind). The amount was notified to HMRC in July 2008 - confirmed by my company payroll and HMRC.

I understand from that they HMRC had all they needed to have quite rightfully asked me to repay tax due to them for that year at any time from July 2008 onwards and most likely to have adjusted my tax code in April 2009 in order to do so.

However, HMRC claim they wouldn't have done that when the info was received - it's not their problem..... I have written a letter, recorded as advised but had already called them prior to finding this forum. Any advise much appreciated.

Regards

Allan.

 

[elaine@cheapaccounting]

yes see here - use letter one in stage one

http://www.cheapaccounting.co.uk/blog/?p=1436

 

[jrs101]

This doesn't sound like a run of the mill case like some of the others.

Did you correctly report your 2007 contracting income at the time? Presumably either as a sole trader or as a limited company? If you were paid in 06-07 through a limited company do you know if it correctly filed P35/P14 for your earnings at the time?

If the answer to those questions isn't "Yes" then it may not be unreasonable for HMRC to want to look back at that year, if it has now discovered that you had income then. But if everything was correctly filed and reported at the time then you probably have a strong case.

Thanks for the reply.

It was a limited company and any income/tax was handled through a "third party" company and I would pay them a monthly fee to operate such affairs.

I do not know if it correctly filed P35/P14 for earnings at the time. I am not getting anywhere when contacting them.

So, I would assume and have no reason not to that they should have submitted these to HMRC and presume the tax office should be pursuing them, is that right? Are they liable?

 

[elaine@cheapaccounting]

Are they liable - what did you ask them to do? As a director it is your responsibility for the returns of the company including the P35 etc. If you did not instruct them to do this then they may have not done it.
With clients we agree our terms of reference in enagagement letter at the start.

As already stated this does not fit the typical cases that we are finding and I would suggest that you talk to your accountant regarding your case.

 

[jamesrcook]

Hi there,

New to forum but glad I found it!

P800 dated 13 February 2011 saying I underpaid tax of £1,620.51 in 2007-8. Caused me and my young family a great deal of stress (received on a weekend - great way to ruin one!). Reason given is tax code failed to accurately reflect P11d benefits. My employer confirmed the P11d was sent in June 2008.

I sent a holding response on 22nd Feb saying I would be using ESC A19 and followed it up with a formal letter one on 28th February once I had all the information about the P11d. No response as yet.

I have now received a 2011/12 Coding Notice (received 11th March but dated 22nd Feb) in which they have unilaterally amended my Code to recover the underpaid tax. I have written again saying they should not amend my tax code like this until the ESC A19 complaint is resolved. I find it astonishing that after 3 years they allowed only 8 days between issuing the P800 and the Coding Notice. They aren't allowing people any time to gather there thoughts and dispute what they are doing!

Sorry for the rant!

 

[crispee]

Received 2 P800's last week - 2008/2009 for £690 and 2009/2010 for £3590 (this includes previous 08/09 of £690 with a statement that 'this calculation includes an underpayment for an earlier year').

Personal circumstances are that I left the Royal Air Force after 23 years service and took up civilian employment. I started with my new employer 3 months prior to my 'end of Service' date and so had 2 incomes for that period. When my RAF wage ceased I was then eligible to recieve my Service pension and have done so since. The timeline is as follows:

Oct 2008 - Started transition to new employment. 2 wages.
Jan 2009 - RAF pay ceases, pension starts. 1 wage, 1 pension.

Prior to starting with my new employer I contacted my existing tax office (Cardiff) by telephone and my new tax office (Newcastle) to inform them of the change in cicumstances. When I started with my new employer I completed the necessary paperwork for payroll and subsequently forwarded my P45 once it arrived.

I sat back, concentrating on my new career and assumed that because I had made both tax offices aware and done the relevant paperwork that all was in order as I heard nothing from them until January 2010 (excepting the annual P60s) when I received 2 tax coding notices. One was for my pension (pension < £9000) at 647L and the other for my main income at D0. I rang the tax office and asked them to explain what/why D0 as it was one I'd not seen before. I was flabbergasted to be told that they wanted 40% of every penny of my main wage (wage circa £45k). They said that this was wrong and swapped the tax codes between the two incomes.

All has been quiet until last week when the dredded P800's arrived. I have to say that in all honesty I was unaware of the problem mounting up and had made efforts at the beginning of this new chapter of my life to ensure the tax office was made aware of my situation. As they are supposed to be the experts I assumed they would get it right. I have reviewed their figures and it would seem that they failed to take enough tax from my pension during those years but surely that was not my fault? I know I should have sat down and reviewed my P60s etc when I got them but as both my pension and wage are PAYE I trusted that all was well.

I am putting together Letter 1 but is there anything I should not state or state additionally?

Thanks in advance.

Letter 1 sent with additional copy of letter setting precedence as you suggested.

Demand arrived last week requesting payment by 11 March so I called them. They stated that they hadn't yet seen my appeal but that they would respond by 18 March.

HMRC response letter arrived this morning stating that they had reviewed my records and agreed I did NOT need to pay the £3600 under ESC A19 and that my records had been updated.

Many thanks to you all for the efforts on this website to help those of us who have been affected by this issue. Bravo!

 

[Bob]

Letter 1 sent with additional copy of letter setting precedence as you suggested.

Demand arrived last week requesting payment by 11 March so I called them. They stated that they hadn't yet seen my appeal but that they would respond by 18 March.

HMRC response letter arrived this morning stating that they had reviewed my records and agreed I did NOT need to pay the £3600 under ESC A19 and that my records had been updated.

Many thanks to you all for the efforts on this website to help those of us who have been affected by this issue. Bravo!

Great news. Sure that Elaine will appreciate that you have returned to thank her and her colleagues

 

[Bob]

No respect yet Only response to date is amended P800s - only this time also including underpayment for 2007-08 so we now have 06-07 07-08 and 08-09

Demand has now gone up from £1,120 to £1,854

Have effectively redrafted original claim and suggested - nicely - that they may care to respond to it this time

 

[Erikkuyl]

Hi all

I've also received notice that I have underpaid tax between 2007-2008. I had 3 jobs during the period. One was a temporary job (I earned £7383.99 and paid tax of £1624.26 on tax code BR). The second job was a full-time job (I earned £39260.62 and paid 9976.72 tax on tax code 522L). The third was another full-time job where I earned £18557.69 and paid tax of £4901.12 on tax code 522L).

HMRC are saying I owe tax of £1039.10 since collectively my income put me in a higher bracket. I passed along all P45s when I started the new positions. HMRC says they can't understand why I was put on either BR (which was the tax code for the previous job) or 522L (which they say is an emergency code.) Prior to the 2007-2008 tax year, I was required by HMRC to fill out self assessment forms even though I was working at places where I was paid via PAYE.

I just spoke to someone there who wants me to make monthly payments to pay this off. I have been unemployed since August of last year and just began a temporary job that will end at the end of this month. I don't have anything lined up at the moment and explained this to HMRC.

Should I file a complaint? Do I stand any chance to have this waived? (The accountant at the place I worked at where I made the £39,260.62 helped me with the issues I was having with HMRC at the time and was fully aware of my situation so I don't understand how this could have happened.

I appreciate any help and advice...

Erik

 

[Tom McClelland]

Should I file a complaint? Do I stand any chance to have this waived? (The accountant at the place I worked at where I made the £39,260.62 helped me with the issues I was having with HMRC at the time and was fully aware of my situation so I don't understand how this could have happened.

If all P35 and P14 information was correctly filed at the time by your employers then this looks like a standard ESC A19 case where following the procedures outlined by Elaine (write the standard letter, and follow it up with the standard complaint when they reject it) would get the underpayment waived. That's how it looks to me from the information supplied, anyway.

 

[Erikkuyl]

Hi Tom

Many thanks for that. I will prepare the letter today...

Erik

 

[Erikkuyl]

Hello

Is there a difference between W1 and M1 in the amount taken out? I noticed in the form that HMRC sent that they have my tax code as 522L wk1 for 2 of the jobs yet the P60s for both jobs show the tax code as 522L M1.

Many thanks.

Best,
Erik

 

[Tom McClelland]

Hello

Is there a difference between W1 and M1 in the amount taken out? I noticed in the form that HMRC sent that they have my tax code as 522L wk1 for 2 of the jobs yet the P60s for both jobs show the tax code as 522L M1.

Many thanks.

Best,
Erik

Payroll professionals often refer to non-cumulative codes as "Week 1" even when they aren't operating a weekly payroll. Week 1 or Month 1 just means "not operated cumulatively".

 

[Erikkuyl]

Hi all

One other question. The company that gave me the temporary job that I had at the beginning of this period never provided me with a P45 (only a P60 at the end of the tax year). They are going to issue one now. Should I forward this to HMRC or will they see a copy? Will this change anything?

One was a temporary job (I earned £7383.99 and paid tax of £1624.26 on tax code BR). The second job was a full-time job (I earned £39260.62 and paid 9976.72 tax on tax code 522L). The third was another full-time job where I earned £18557.69 and paid tax of £4901.12 on tax code 522L).

HMRC are saying I owe tax of £1039.10 since collectively my income put me in a higher bracket. I passed along all P45s when I started the new positions. HMRC says they can't understand why I was put on either BR (which was the tax code for the previous job) or 522L (which they say is an emergency code.) Prior to the 2007-2008 tax year, I was required by HMRC to fill out self assessment forms even though I was working at places where I was paid via PAYE.

Many thanks
Erik

 

[callsecam]

Received a letter saying:
"I have now made the necessary amendments to the Tax calculation previously issued for the year shown above. My revised calculation is shown on the enclosed sheet. The reason for the underpayment DUPLICATE PERSONAL ALLOWANCE RECEIVED."

The calculation shows I have underpaid 591.99 for my PAYE Income of 14673.

Few days later, I've received another letter changing my tax code to 451L which subtracted £2959 for 'underpayment restriction' resulting my personal allowance to be £4516 (£2959 at 20% is £591.99).

I have reviewed the recommendations in the forum.
Which sample letter should I send from the guardian website?
Is 'Letter 1 Making a claim through a Extra-Statutory Concession (ESC) A19' only for 'multiple' failures, i.e. 'failed more than once', 'build up over two whole tax years'? If it is only for one year of arrears as in my case, does ESC A19 not apply?

Some members are recommending to phone them - should I just do that?

 

[elaine@cheapaccounting]

Some members are recommending to phone them - should I just do that?

If said members have experience with dealing with HMRC in this matter and have proof that this approach works then go for it.

As someone who has dealt with many of these cases and have positive results of tax written off I do not recommend this approach.

My approach is documented here ..

http://www.cheapaccounting.co.uk/blog/?p=1436

 

[Bob]

Did you have a nice holiday Elaine :| We missed you

 

[elaine@cheapaccounting]

Did you have a nice holiday Elaine :| We missed you

Yes Bob -lots of sunshine and walking done.

Glad to hear that my absence is noted

 

[callsecam]

Thank you, Elaine,
I've just sent the letter.

 

[busir]

Hi Elaine, I recieved the tax underpayment statement from HMRC and it mounts upto £20,000. (DEVASTATING). Reason they mentioned is High Rate Tax Band. It spans over years 2007-08, 2008-09 and 2009-10. It will go as high as £25,000 when I shall recieve tax underpayment for 2010-11
Actually I was on basic tax band when I started job with NHS and it was continued. I am with same employer during this time and have been recieving P60 every year. They said there was some mistake in applying the correct tax code despite the fact they had all the correct informations at that time, on the bases they had been issuing P60 and now calculated underpayment. My pay-roll dept and hmrc pointing finger on each other in terms of applying wrong tax code. Is there any way or hope here for me?