MSE News: Millions more forced to pay £100s in tax underpayments

Lets look at the completely shoddy reporting her shall we.

now tax will be collected from anyone owing £50 or more

Thiswas always the case. The tolerance was increased to £300 due to the fact tha HMRC recognised that the in a large proportion of cases the errors were down to them and so increased the limits where tax would not be collected. In this case the number of errors that can be attributed to HMRC are much much lower.

This will either be down to errors by HMRC or to employers failing to supply information relating to changes in workers' hours or company benefits.

There is no responsibility whatsoever of the employer to notify of a change of hours at any time or for that fact a change of income. Neither is there any responsibility for the employer to notify a change of Employer Benefits during the tax year. They only have to report this at the end of the year.

The responsibility for ensuring the correct information regarding changes to benefits in kind, estimated earnings etc falls on 1 person and person only, the individual taxpayer.

Up to £3,000 per individual will be collected via PAYE with taxpayers asked to make "other arrangements" for additional debts.

Actually the largest calculated underpayment that can be collected via PAYE is £2000

The last time there were errors, a possible loophole - the E19 Extra Statutory Concession form - emerged that meant unpaid bills could be written off if HMRC hadn't used the information given to it correctly, but the timescales involved mean it is unlikely to apply this time.

This is not a 'loophole'. ESC A19 exists to ensure that HMRC operates within certain time limits on information that it receives. Where this information was acted on outside these time limits then the concession was given.

If the underpayment for 10/11 is a result of information relayed to HMRC in the 2009/10 tax year or earlier then again ESC A19 would apply.

It's about time MSE stopped looking to pick fights with HMRC and started advising people what THEIR responsibilities are when it comes to income tax.

The standard of reporting in this article is so bad it would even be rejected by the Daily Fail.

The majority of underpayments will be down to the following reasons

1) a change of employers during the year, and subsequently the individual not handing in their P45 from old employer to new.

2) a change to benefits in kind, whether that be a change of company car, an employee taking advantage of a staff loan at a preferential rate, an increase in medical insurance costs.

3) a taxpayer having relief for job expenses in their tax code based on earlier year expenses, but in the 10/11 tax year, their expenses are lower than in previous years and lower than the amount in the code.

4) people with more than 1 source of income, which in previous years when added together totaled less than the 40% tax limit, but in 2010/2011 the total income is in excess of the 40% tax limit, but has only been taxed at 20% due to the codes in operation.

The biggest problem s that too many people are unaware they they are responsible for ensuring the correct amount of tax is being paid, and they simply don't report change to HMRC, in many cases not even a change of address.

IMO, more needs to be done to educate people on their responsibilities when it comes to income tax, and this should start with the basics being taught at school in lessons such as PSE (physical and social education, if such a lesson still exists).

Im not saying that people should be taught the in's and out's, but the simple things. i.e. What to do with a P45, how to check your tax code, what changes to report to HMRC, what should you do if you start a job and have no P45?, I'm a student, what do I need to do if I only work in the holidays?

This is a highly misleading news item - PLEASE can it be removed.

Having read a few other topics on the forum today this 'Article' seems to be following the latest 'fad' on these forums.

Public Sector Bashing!!!!!


Come on Martin, get a grip of your website !!!!!!!!!!!!!!!!!

BoGoF wrote: »

The 'article' is an embarrassment to whoever wrote it. To quote from it

"This will either be down to employers failing to supply information relating to changes in workers' hours or company benefits."

Pure and utter nonsense.

I agree, as I mentioned in my earlier post.

I thought reporters were supposed to research their 'articles' before they went to print?