Post your case here

[elaine@cheapaccounting]

I have just received my appeal letter reply from HMRC regarding underpaid tax of £6680 for yrs 2008/9 and 2009/10 under the (ESC)A19 and have won my case,many thanks to Elaine and this forum,Elaine put together an appeal letter for me which I am eternally grateful for,this is a big worry off my mind and I would urge anybody wanting to draft together an appeal letter that its worth paying the fee to get Elaine to draft it for you and once again many thanks Elaine and keep up the good work.

Great news - well done.

 

[Judders]

Hi,

I am a higher rate tax payer, and have been with my current employer for over 11 years.

I only have one job / source of income.

Just received P800 for Tax Underpayment of nearly £5.5k! (cummulative for 08/09, /09/10, and 10/11)

Now I didn't really understand all of this until I have just started researching it all - it transpires that my employer has been using a tax code BR for me since I commenced employment!

I have never received any code notices etc. or any comms at all regarding my tax code. I assume that I gave them a P45 or filled in a P46 at commencement of employment, but I cannot remember.

This would clearly seem to be unfair and either HMRC or my employer (large FTSE 100) at fault (PAYE, single income, 11 years, no tax codes issued).

Am I correct, and shouled I therefore use letter template 1 (ESC A19) or template 2 (employer fault) or combine the two?

Any help really appreciated - we are a single income family with a 9 month old baby, and really can't afford £5.5k!

Thanks.

 

[mario1952]

Hi,

I am a higher rate tax payer, and have been with my current employer for over 11 years.

I only have one job / source of income.

Just received P800 for Tax Underpayment of nearly £5.5k! (cummulative for 08/09, /09/10, and 10/11)

Now I didn't really understand all of this until I have just started researching it all - it transpires that my employer has been using a tax code BR for me since I commenced employment!

I have never received any code notices etc. or any comms at all regarding my tax code. I assume that I gave them a P45 or filled in a P46 at commencement of employment, but I cannot remember.

This would clearly seem to be unfair and either HMRC or my employer (large FTSE 100) at fault (PAYE, single income, 11 years, no tax codes issued).

Am I correct, and shouled I therefore use letter template 1 (ESC A19) or template 2 (employer fault) or combine the two?

Any help really appreciated - we are a single income family with a 9 month old baby, and really can't afford £5.5k!

Thanks.

You may be best starting a new thread,anyway they can't chase you for years 08/09, /09/10 but Its definitely a HMRC or your Co fault,you need to have a word with your wage Dept about why coding BR was issued.

Look through this forum and you will find how to go about it,there is a link on this thread which I cannot duplicate.

 

[Tom McClelland]

In all fairness, if the questioner has been with their employer for 10 years HMRC has had ample opportunity to spot the error. And in such a case, where a tax code was set that many years ago, it is probably unreasonable to expect the company to have any recollection of why. The case actually goes beyond the 7 years for which PAYE records have to be kept. It could conceivably be something as simple as wrong P46 box ticked by the employee by mistake when they started.

As a higher rate taxpayer wouldn't self-assessment come into play?

 

[Judders]

Hi all,

Thanks for the replies.

I can start a new thread, but I thought that this was a kind of master thread for these P800s?

I have never been asked to do any self assessments, I was under the (potentially niave) impression that I was a very simple tax example, and that PAYE would just be doing everything correctly!

Its interesting, as when I started at my company I was "just" into the higher rate, so I probably actually overpaid tax on the BR code.

In recent years, with promotion and bonus this equation has changed. So joy of joys I now get a large bill!

So - what should be my course of action - send letter template 1 ESC A19. It is surely reasonable of me to have assumed that my tax affairs were in order, and HMRC has failed to act for over a decade! They have also let the arrears build over >2 years so therefore should waive even the most recent year?

Also - I now know I am on the wrong tax code, so should I also fix that, or will that complicate things?

Lots of questions, if you can only answer one then what should I do next?

Thanks!

 

[elaine@cheapaccounting]

see here and use the employer at fault option 2 in stage one ...

http://www.cheapaccounting.co.uk/bl...ax+Payer+Charter!+–+PAYE+Fiasco&searchsubmit=

good luck

 

My case (sorry about the double post, I'm new and don't know what has happened here. If a mod could delete the first that would be great.)

I've recently received a P800 asking for £559.23 for underpayment of tax for the tax year 2006/2007.

I was employed at the time and paid tax via PAYE.

Is there a time limit HMRC should have asked for this back in? I'm finding bits online saying they have 4 years but can't find anything official.

Also do I have grounds to use the ESC a19 as they must have had information regarding this tax year for some time now and failed to act upon it for the last 4 years never mind 12 months.

Any advice on how to proceed would be fantastic.

Thanks

 

[alexlowe]

hello,

I got a phone call from my boss this afternoon (i'm a PAYE) and he told that he's just done the wages but my hmrc have helped themselves to most of it... left me with less than £500.

I call them up and they have changed my tax code but can't explain why, they didnt know where I work or how long i've been there, said I've been claiming benefits when I havent refused to accept they had made a mistake... amongst other things said it must be my fault for not sending them my P45 (complete rubbish, i've never been asked to and always make sure my employer has all they need) also said it must be my employers fault for not questioning the change in tax code and told me to tell them to do the payroll again(!/?) the guy on the phone was ok at first but when I wouldn't go away got very difficult to deal with...

basically, I can't pay my mortgage or most of my bills let alone celebrate christmas and according to the guy on the phone all I can do about it is write them a letter and hope that they sort it out for next month.

I dont know what to do... any help/advice appreciated

 

[Tom McClelland]

hello,

I got a phone call from my boss this afternoon (i'm a PAYE) and he told that he's just done the wages but my hmrc have helped themselves to most of it... left me with less than £500.

I call them up and they have changed my tax code but can't explain why, they didnt know where I work or how long i've been there, said I've been claiming benefits when I havent refused to accept they had made a mistake... amongst other things said it must be my fault for not sending them my P45 (complete rubbish, i've never been asked to and always make sure my employer has all they need) also said it must be my employers fault for not questioning the change in tax code and told me to tell them to do the payroll again(!/?) the guy on the phone was ok at first but when I wouldn't go away got very difficult to deal with...

basically, I can't pay my mortgage or most of my bills let alone celebrate christmas and according to the guy on the phone all I can do about it is write them a letter and hope that they sort it out for next month.

I dont know what to do... any help/advice appreciated

They must have sent your boss a P6, I think. Before they did this they should have sent you a P2 explaining why your tax code has changed. Did you get one?

 

[alexlowe]

hello,

they have sent something to my parents house which i have not yet seen... why they have sent anything there is yet another mystery...

i forgot to mention that my boss said he thinks that they are saying i have underpaid but the idiot on the phone wasn't clear, he just kept using jargon and trying to get rid of me...

thanks.

 

[Tom McClelland]

hello,

they have sent something to my parents house which i have not yet seen... why they have sent anything there is yet another mystery...

i forgot to mention that my boss said he thinks that they are saying i have underpaid but the idiot on the phone wasn't clear, he just kept using jargon and trying to get rid of me...

thanks.

This illustrates the importance of reading and trying to understand the significance of official letters. If your parents had forwarded the letter to you then you probably would have had time to do something about this before the monthly pay run.

You need to see what they sent you as soon as possible because their letter should explain why they changed your tax code. My understanding is that they aren't supposed to make in-year tax code changes that would cause hardship.

 

[alexlowe]

Thanks for your help. With respect... they need to write to me where I live not where I used to live some years ago.

Well they are definately causing hardship, I don't know what i'm going to do... the guy on the phone says it's not their problem...

 

[Judders]

Elaine,

Thank you for your reply.

So you are suggesting that I use "employer at fault" rather than the "HMRC not using info available in good time" line of defence.

What is my rationale for the employer being at fault? I am new to all of this, but would assume that the base case is that the employer should only have used BR code on a temporary basis and should have changed this sooner than 11 years!?

However I do not know whether HMRC have ever issued a coding notice to my employer, so if they have not then can I state that the employer is at fault?

Just trying to establish which course of action would be most effective for me.

Many thanks.

 

[elaine@cheapaccounting]

Are you saying that you did not get a new notice of coding every year?

 

[Judders]

Elaine,

I have never had a notice of coding!

Joined the co. over 11 years ago, and this is the first comms I have ever had from HMRC.

The only paperwork I have ever received from anyone is P60's each year from my employer.

Thanks.

 

[elaine@cheapaccounting]

Why were you put on a BR code at the start? You say you are a higher rate tax payer - but that is not the case if you are on a BR code.

Based on what you say I don't think your employer is at fault - so you need to try sample 1.

Do remember that it is your responsibility to check your tax and you did receive a P60 each year so would have seen that the higher rate was not applied but a straight 20% or the rate in force at the time.

 

[Judders]

Hi Elaine,

I do not know why I was ever put on a BR code.

I honestly cannot recall whether I handed in a P45, or filled out a P46, but from what I have read over the last few days I assume that perhaps I filled in a P46 and said that I had already worked for another company in that tax year (I joined in June, so had worked for my previous employer Apr - Jun). Therefore my current employer put me on BR code?

Why they picked a BR code I do not know, I was only just into higher rate on annual salary, so perhaps its because it was June and I was still in basic rate threshold?

All over 11 years ago, so very tricky to know.

I thought that all of my tax orders were fine, assumed that PAYE would look after it all.

Until recent years the loss of personal allowance has more than cancelled out the gain from 20% v 40%, so that is why I had assumed everything was fine. I expect I was actually overpaying for a number of years.

Surely it is reasonable of me to expect my employer or HMRC to have put me on the right tax code at some point in the last decade? Or is that wishful thinking, and I should have noticed the code that I knew nothing of being incorrect?

Thanks for any help. 5.5k is a bit of a shock!

PS. This tax area is really quite enlightening once you start looking at it, but for someone who has just been single job PAYE all their life I knew nothing about tax codes etc. and I like to think I am reasonably intelligent! Would be useful if they actually taught you this in Schools! Thanks to all on this forum for helping to enlighten me.

 

[elaine@cheapaccounting]

Can you clarify what you mean by ...

"Until recent years the loss of personal allowance has more than cancelled out the gain from 20% v 40%"

What do you mean by the loss in personal allowance?

 

[Judders]

Hi Elaine,

OK, I assume that BR means that I get taxed 20% on everything.

So if on 44k pa, tax = £8.8k.

If personal allowance = 6.475k
Basic Rate = 0-37,400
Higher Rate - 37,401+

So first 6.475k is tax free
So taxable salary = 37.525k
BR = 37.4k = £7.48k
HR = 0.125k = £0.05k
Total Tax = £7.53k if taxed correctly.

So on 44k getting taxed at BR would mean overpaying tax by nearly £1.3k

Or am I missing something?

 

[elaine@cheapaccounting]

You need to check each P800 - the calcs will be on there for each year as the rates are different.

Good luck with it

 

[Judders]

Hi Elaine,

I have checked them.

They are correct for the last three years, and I have been underpaying due to the BR code. (by 1.9k, 0.5k, 2.4k). The letters do not state this, but it seems the obvious cause.

I was just mentioning that back in 01, 02, 03 etc I was probably overpaying tax, and certainly the total tax paid was not very different to what I expected to pay. Hence me never picking up on the incorrect tax code.

Anyway, its a slight aside.

Given what you now know of my situation do you believe that I have grounds to appeal? If so its letter template 1.

Is it reasonable of me to expect a correct tax code on PAYE?

Thanks.

 

[elaine@cheapaccounting]

Without knowing why you are on the BR code I cannot advise. This is the key to your case.

A correct tax code will be assigned if you provide your employer and HMRC with the correct info.

Without knowing why you were on the BR code in the first place I cannot comment on who is at fault!

 

[Tom McClelland]

Without knowing why you are on the BR code I cannot advise. This is the key to your case.

A correct tax code will be assigned if you provide your employer and HMRC with the correct info.

Without knowing why you were on the BR code in the first place I cannot comment on who is at fault!

It is conceivably even possible that BR was the correct tax code when the OP joined their new company 11 years ago. I would expect it to be virtually impossible for anyone to find out why that happened all those years ago. Perhaps the OP ticked box C on a P46, or perhaps the OP didn't provide a P46 or P45 at all which would automatically in those days cause a BR tax code to be used. (HMRC has since changed procedures and now a missing P46 more correctly generates tax code 0T/W1)

Presumably HMRC has had all the information it needed to spot the error (in the form of P14 submissions) for the last 7 years, and more. Someone earning more than the base rate bandwidth in one job on code BR should have rung automatic alarm bells at HMRC in any case. Gross dereliction that HMRC didn't pick it up sooner, in my opinion. (not that that necessarily cuts any ice in the appeals process, where Elaine's experience is the best guide of which tack to take)

 

[elaine@cheapaccounting]

How would HMRC know what code to change it to unless told the circs.

The usual chain of events is a BR code assigned which is then corrected via a subsequent event e.g. advising HMRC that this is the only job. Then the 'normal' personal allowance would be assigned.


The crux goes back to the allocation of the BR code and the fact that it has not changed.


In my experience of handling these HMRC will rule that they acted on info provided i.e. they were not told anything to re-assign the correct code.


Whilst of course it may be difficult to remember what happened 11 years ago often one does remember what job happened before.


Whatever happened HMRC have not be advise of the circs, the employer acted on the info provided so I can't see a reason for appeal so far unless more light can be shed on why the BR code was assigned.

You have to give HMRC some reason to rule in the posters favour!


HMRC have ruled that a P14 is not reason to change the tax code - I report this, I do not make the rules!

 

[Judders]

What I don't understand is what is supposed to happen here.

It wasn't unusual circumstances.

I cannot remember for sure but lets assume that I filled in P46 - option C?

- Leave Co. A in June 00
- Join Co. B in June 00, select "have worked for another company in this tax year, but this is my only job now"
- Get put on BR code
- 11 years later get tax bill.

What steps should have happened in the interim. Should HMRC have issued a coding notice, should my employer have contacted me / HMRC, or should I have just noticed the code BR on the annual P60.

Help!

 

[elaine@cheapaccounting]

Box C is if you have another job. This is the only box on a P46 that would put you on a BR code.

If this was ticked then it was incorrect - so your error. This is my point.

If incorrect it is your responsibility to tell HMRC.


How can you expect them to know?


Generally this is used where someone has two jobs or a pension. If their circs change then they tell HMRC.


Whilst you can't expect everyone to know the tax codes etc you can expect them to inform HMRC and their employer of the correct circs relating to their position.


Again unless you can shed any light on why the BR was incorrectly assigned (except for you ticking an incorrect box) then I do not see a valid reason for an appeal.
Of course you are free to get another opinion.


Good luck but I think I have covered all I can on your case.

 

[Judders]

Sorry - I mean box B

"This is now my only job, but since last 6 April

I have​

​

​

​

​

​

​

​

​

​

had another job, or have received
taxable Jobseeker's Allowance,
Employment and Support Allowance or
taxable Incapacity Benefit. I do not receive​

a state or occupational pension."

I wouldn't have ticked box C.

So given those facts why on earth was I ever on BR code?

And what should have happend by whom to pick up on the error?

Thanks.

 

[elaine@cheapaccounting]

Sorry - I mean box B


I wouldn't have ticked box C.

So given those facts why on earth was I ever on BR code?

And what should have happend by whom to pick up on the error?

Thanks.

As I think I have said - do you have proof of this?

You need the P46 to prove this is what happened.

Check with your employer and find out what happened when you joined.

You said "I honestly cannot recall whether I handed in a P45, or filled out a P46" so you cannot say that you ticked box B!

You can only argue the point if you have proof that an error occurred and so far there is none only an assumption that you must have completed a P46 and completed it correctly and someone else, not you, made the mistake.

With respect, if I can tear this apart HMRC will do a better job of it than me in an A19 appeal!

HMRC will argue that they acted on the info provided unless you can prove that they did not.

Again I have nothing further to add as there is still no further proof of an error being made.

Facts are the only thing you or anyone else can appeal on.

 

[Tom McClelland]

Sorry - I mean box B

"This is now my only job, but since last 6 April

I have​

had another job, or have received
taxable Jobseeker's Allowance,
Employment and Support Allowance or
taxable Incapacity Benefit. I do not receive​

a state or occupational pension."

I wouldn't have ticked box C.

So given those facts why on earth was I ever on BR code?

And what should have happend by whom to pick up on the error?

Thanks.

Might you conceivably have not filled in a P46 at all, AND not supplied a P45? in which case the correct default action by your employer would have been (at that time) to put you on code BR.

What should have happened by whom to pick up on the error? Who knows? It appears that HMRC had no systems to detect incorrect tax codes being applied by employers for whatever reason. The employer would have no reason to check, and you thought that everything was AOK. Many higher rate tax payers have at least one other income source, such as bank deposit interest or share dividends, and in such a case your Self Assessment return would automatically have picked up the error and corrected it.

HMRC should have picked up on the error if they had decent systems and controls, since HMRC had enough information, in the form of P14 submissions from your employer, to see that you were paying the incorrect amount of tax. However, as Elaine has correctly and knowledgably pointed out and I'd forgotten, HMRC has arbitrarily decided that it is allowed to ignore P14s when deciding whether or not it should already have known that an employee was having the wrong amount of tax deducted. I'd love to see that HMRC whim challenged by someone with deep pockets, because I suspect that the judgement would rip HMRC to shreds if it ever got to court, the logic being that P14s are easily the BEST form of information available to HMRC to make the "wrong tax paid" assessment. Far better than the horrifically poor dataset of the start/leave documents that they DO accept as evidence of their error.

But pragmatically I don't suppose that anyone will challenge this or seek some kind of judicial review of whether HMRC has worded ESC A19 unfairly narrowly to exclude its own inadequacy in interpreting P14s from consideration, because the amount owed by an individual would never cover the cost of the case.

So, even though the manifest unfairness of the P14 situation is blood-boiling I'll shut up about P14s in future, Elaine, if only to reduce my own blood-pressure.

 

[elaine@cheapaccounting]

So, even though the manifest unfairness of the P14 situation is blood-boiling I'll shut up about P14s in future, Elaine, if only to reduce my own blood-pressure.

As I said I only report on the rules - not make them.

If I had several million in the bank and could retire I'd take up these unjust fights but for now I have to accept life is not always fair and just

It sinks but the facts remain that it is the individual's responsibility to check tax codes.

 

[Judders]

Thanks for all of the advice.

P45, P46 - I don't know, it was 11.5 years ago. I do know that if I filled in a P46 I would have selected option B as it is the one that applied.

I therefore assume that probably there was no P45 or 46 as that is the only way I could have ended up on BR.

Anyway a lot of assumptions. Thanks for your time, I will go for option 1 and see what transpires. I assume that this will at least surface what was supplied when I joined the company and inform my actions from then.

Thanks, I'll stop with my unanswerable questions now!

 

[Judders]

Hi - sorry back again, but emergency situation!

As you know I got a letter on 28th Nov, and am just forming my reply.

However went to the cash point and got refused, checked my online banking thinking I must have been defrauded etc. and found out my Salary had gone down by £1600!

It appears that over 50% of my salary was taken as income tax last month!

What can I do, surely HMRC can't take this amount without any notice what so ever.

I am a single income family with a baby, and this makes me £1k overdrawn at the start of December.

New tax code on payslip 747L (not BR), but no notification.

I guess contact HMRC and my pay team, but what can I hope for.

Happy Xmas! (

 

[Tom McClelland]

Hi - sorry back again, but emergency situation!

As you know I got a letter on 28th Nov, and am just forming my reply.

However went to the cash point and got refused, checked my online banking thinking I must have been defrauded etc. and found out my Salary had gone down by £1600!

It appears that over 50% of my salary was taken as income tax last month!

What can I do, surely HMRC can't take this amount without any notice what so ever.

I am a single income family with a baby, and this makes me £1k overdrawn at the start of December.

New tax code on payslip 747L (not BR), but no notification.

I guess contact HMRC and my pay team, but what can I hope for.

Happy Xmas! (

This may be no consolation, but all 747L is doing is correcting your recent underpayment of tax between April and October this year. That complete correction has now happened in your current payslip and your pay next month should only be about £200 less than its previous normal value. HMRC isn't collecting any of your past underpayment by giving you that code. At a guess you must be on something around or over £50k/year and you haven't been paying higher rate tax until now, which you should have been paying on your income above c. £42k/year.

 

[Judders]

Hi,

Thanks for your reply.


After calming down, I realise that you are obviously correct. This is correctly adjusting my tax situation for this year rather than for previous years. Still not nice before Xmas!


Two questions arise;
1) Does the fact that HMRC have now issued me with a new code (without any contact from me) help with route 1 appeal. It surely demonstrates that they had all relevant information to correct the situation and took no action for 11.5 years.

2) I guess I should speak to my pay services guys about zero notice on this massive pay / tax adjustment! It doesn't seem like very nice practice to just do this with no notice, or just checking whether it would make my family broke!


Thanks.

 

[deadpixel]

Cheap accounting? how much do you charge for 1 tax return on average?

 

[Tom McClelland]

1. No, apparently it doesn't help. Everyone involved knows that HMRC had all the information it needed to spot that your tax was being done incorrectly all along. However HMRCs systems until last year were terrible and they weren't picking this up. On appeal HMRC will only accept very particular and specific failings on its part, to properly recognise and action starter documents from employers (which in your case should have been submitted 11 years ago). HMRC does not accept any responsibility in its appeals process for its other manifest and horrific failures to manage a basically effective PAYE system.

2. PAYE Deductions made your your employer's payroll department are not a matter of choice. They are a matter of law. When your payroll department received a notice of coding from HMRC it had no choice about what to do, which was to action the new tax code and deduct whatever tax was calculated as a result of that. So I don't think you have any particular grounds to complain to them.

 

[elaine@cheapaccounting]

Cheap accounting? how much do you charge for 1 tax return on average?

self assessment or corporation tax?

To help - All of our fees are on the web site.

 

[Judders]

Hi,

I have spoken to my pay team and asked them why I am on a BR code.

Their response is "This was the default tax code operated at that time when a P45 was not produced by you from a previous employment. The HMRC have kept you on this coding at each year end when Gross pay and tax figures have been sent to them. You will need to liaise with the Tax office. "

They also said
"the Tax office confirmed this code recently when they sent Pay Services a P9 (notice of coding to employers)"

My understanding is that its the employers responsibility to set up PAYE using a P46 when no P45 is supplied. I am therefore minded to use appeal letter 2, employer not operating PAYE correctly, as BR should only have ever been used on a temporary basis.

Sound correct?

 

[elaine@cheapaccounting]

No to me - no

It is your responsibility to ensure you are on the right tax code and provide an employer and the tax office with the correct information.

If they got a notice of coding then you will have got one too.

What has your employer done wrong? They have followed the rules.


The issue is that the BR code has never changed. That is not your employers fault as they can only change this is advised to do so by HMRC.


HMRC will only change it if you provide a reason to them to do so.


The fact that the onus is on the tax payer to know the tax system may be crap but that is how it is I’m afraid.

 

[Tom McClelland]

...

Their response is "This was the default tax code operated at that time when a P45 was not produced by you from a previous employment. The HMRC have kept you on this coding at each year end when Gross pay and tax figures have been sent to them. You will need to liaise with the Tax office. "

...

OK, this statement by them isn't quite true. Or certainly not quite complete. When you didn't supply them with the P45 from your previous employer they should have invited you to fill in a P46, and the P46 would have told them what tax code to use. There is no such thing as a "default tax code" unless for some reason you're unwilling or unable to fill in a P46, in which case BR should be used. So you need to ask them why they didn't give you a P46 to fill in? If they didn't give you one then I think you can argue that the employer was at fault.