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    • stevebrickman
    • By stevebrickman 13th Jun 17, 9:47 PM
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    stevebrickman
    Tax Help! P11D BIK Issue
    • #1
    • 13th Jun 17, 9:47 PM
    Tax Help! P11D BIK Issue 13th Jun 17 at 9:47 PM
    Hi all - hoping for a little bit of help/guidence if thats ok please?!

    My tax code changed in April, resulting in in my net take home pay reducing significantly (a few hundred pounds).

    After a *lot* of phone calls with HMRC (who are not the most helpful bunch) as well as correspondence with my payroll dept - i believe the situation is a result of the following:

    - HMRC claim that the tax code change has happened because I have underpaid based on my benefits in kind not being taken into consideration in my tax allowance from a previous year.
    - They claim that they received a P11D in August 2015 - and this P11D triggered a change in tax code.
    - Through work - I benefit from a 'low interest loan' (a preferential mortgage rate essentially). Low interest Loans are considered 'benefits in kind', and therefore need to be captured on the P11D & considered as part of your tax allowance. The HMRC representative that I spoke to suggested that a lot of P11D related issues come about as a result of an 'end date' being set ('date loan was discharged') - rather than being left blank as it should be.
    - After a lot of digging, I managed to find the P11D (HMRC were unwilling/unable to provide a copy):
    - I moved house in May 2014. My old mortgage was paid down, and a new mortgage was set up for my new house. This is reflected on the P11D. Section H has room for 2 'low interest loans'. Loan 1 has an end date in May 2014 - reflecting that mortgage which was paid off. Loan 2 has a start date of May 14, and the end date is left blank - as I believe it should.
    - The P11D that my employer has produced looks correct. I believe HMRC made the tax code change on the basis of Loan 1 being closed down, and for some reason have made no consideration of Loan 2.

    Should I be liable for an HMRC error? Appreciate any thoughts on how I can progress things - i'm getting absolutely no where on the phone with them, and it feels grossly unfair that I should be penalised to such an extent ( a few hundred pounds a month!!) for something outside of my control, and which wasnt my fault!

    Thanks -

    Steve
Page 1
    • Dazed and confused
    • By Dazed and confused 13th Jun 17, 10:02 PM
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    Dazed and confused
    • #2
    • 13th Jun 17, 10:02 PM
    • #2
    • 13th Jun 17, 10:02 PM
    I know it's a long post but I'm a bit lost as to what you're actually asking (as you're no doubt now aware tax is all about the detail ).

    An August 2015 tax code change may well have been from the 2014:15 P11D.

    Do you have your P11D's for 2014:15, 2015:16 and 2016:17 (maybe bit early for this one?)

    Do you have your P60's for those years?

    Have you received P800 calculations for any of those years?

    And don't forget any extra tax you might have to pay is, at worst, simply tax which should have been paid in the past, effectively an interest free loan which you've benefited from.
    • stevebrickman
    • By stevebrickman 13th Jun 17, 10:13 PM
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    stevebrickman
    • #3
    • 13th Jun 17, 10:13 PM
    • #3
    • 13th Jun 17, 10:13 PM
    I know it's a long post but I'm a bit lost as to what you're actually asking (as you're no doubt now aware tax is all about the detail ).

    An August 2015 tax code change may well have been from the 2014:15 P11D.

    Do you have your P11D's for 2014:15, 2015:16 and 2016:17 (maybe bit early for this one?)

    Do you have your P60's for those years?

    Have you received P800 calculations for any of those years?

    And don't forget any extra tax you might have to pay is, at worst, simply tax which should have been paid in the past, effectively an interest free loan which you've benefited from.
    Originally posted by Dazed and confused
    Thanks for the reply (sorry - it is a bit of a ramble !).

    I have found my P11d's - all of which look correct...

    I believe HMRC have incorrectly processed the P11D for 2014/2015, submitted by my employer in Aug 2015.

    They have not taken into consideration a new staff mortgage, which is clearly stated on the P11D.

    My question is - should HMRC write this liability off given that it has occured because of their own error? I have not done anything wrong (neither have my employer) - yet i'm am being penalised to the tune of a few hundred a month - which I was not expecting!!
    • Dazed and confused
    • By Dazed and confused 13th Jun 17, 10:23 PM
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    Dazed and confused
    • #4
    • 13th Jun 17, 10:23 PM
    • #4
    • 13th Jun 17, 10:23 PM
    I think you need to consider each year at a time, that should make it easier for you to understand what's happened.

    So, for 2014:15 you have a P11D and you understand what the benefit in kind you should be taxed on?

    Have you received a P800 caclulation for 2014:15 and if so does it show the correct benefit in kind figures?

    If not what does your tax code for 2014:15 show for benefits in kind? This will give an indication of whether you owe anything for that year i.e. benefits in tax code are lower than the P11D value then you might owe tax for that year.

    For 2015:16 it is immaterial what your adjusted tax code was, what matters now is how much you earned and what the actual benefits were i.e. your 2015:16 P11D.

    Remember tax codes are just a mechanism to try and collect the correct amount of tax during the year, for lots of reasons the actual information may mean some sort of adjustment is required. It may be annoying if you have extra tax to pay but if you have paid too much tax you will get it back, do you really think it should be a one way street?
    • Dazed and confused
    • By Dazed and confused 13th Jun 17, 10:25 PM
    • 1,390 Posts
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    Dazed and confused
    • #5
    • 13th Jun 17, 10:25 PM
    • #5
    • 13th Jun 17, 10:25 PM
    Are you saying the benefit in kind estimate in your 2015:16 tax code was wrong because the 2014:15 P11D was misinterpreted?

    Ultimately this won't matter because it is the 2015:16 P11D which is what your tax for 2015:16 should actually be calculated on
    • stevebrickman
    • By stevebrickman 13th Jun 17, 10:43 PM
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    stevebrickman
    • #6
    • 13th Jun 17, 10:43 PM
    • #6
    • 13th Jun 17, 10:43 PM
    It may be annoying if you have extra tax to pay but if you have paid too much tax you will get it back, do you really think it should be a one way street?
    Originally posted by Dazed and confused
    I think I need to try and find the P800's & P60's (although I honestly cant remember having ever received a P800...)

    To your point - i'm all for paying what I owe - and I appreciate your balanced reply. My frustration is that i'm financially taking a bit of a hammering (possibly rightfully so!), when from my perspective I havent done anything wrong... neither has my employer.

    As a worst case- wouldnt you expect HMRC to be able to spread the liability over a couple of years??
    • Dazed and confused
    • By Dazed and confused 13th Jun 17, 10:52 PM
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    Dazed and confused
    • #7
    • 13th Jun 17, 10:52 PM
    • #7
    • 13th Jun 17, 10:52 PM
    Yes, logic would say that if it's a large amount (a few hundreds a month is large in my world!) then it should be possible to spread it out over a year or two.

    Having said that seeing as you have found HMRC hard going so far I would be inclined to be sure of my facts first before trying to change anything.

    If you check any P800's first (or check what tax should be owed to HMRC (or owed back to you) for each year in the absence of P800's) you should have have an idea of what tax arrears (if any) should be included in your current years tax code.

    Does your current code include an adjustment for both tax underpaid and an estimate of your benefit in kind?

    One thing which you could do with knowing is the amount of any tax owed at 05 April 2014 i.e the starting point before the more recent years tax owed (if any) is added.
    • stevebrickman
    • By stevebrickman 13th Jun 17, 10:59 PM
    • 7 Posts
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    stevebrickman
    • #8
    • 13th Jun 17, 10:59 PM
    • #8
    • 13th Jun 17, 10:59 PM
    Yes, logic would say that if it's a large amount (a few hundreds a month is large in my world!) then it should be possible to spread it out over a year or two.

    Having said that seeing as you have found HMRC hard going so far I would be inclined to be sure of my facts first before trying to change anything.

    If you check any P800's first (or check what tax should be owed to HMRC (or owed back to you) for each year in the absence of P800's) you should have have an idea of what tax arrears (if any) should be included in your current years tax code.

    Does your current code include an adjustment for both tax underpaid and an estimate of your benefit in kind?

    One thing which you could do with knowing is the amount of any tax owed at 05 April 2014 i.e the starting point before the more recent years tax owed (if any) is added.
    Originally posted by Dazed and confused
    You've been incredibly helpful - thank you. I'll try and dig that detail out.. feels like a task for tomorrow night now

    Cheers,

    Steve.
    • Dazed and confused
    • By Dazed and confused 13th Jun 17, 11:04 PM
    • 1,390 Posts
    • 569 Thanks
    Dazed and confused
    • #9
    • 13th Jun 17, 11:04 PM
    • #9
    • 13th Jun 17, 11:04 PM
    Yes, unlikely to be a five minute job now but once you've got the past few years sorted it should be easy enough to keep tabs on things going forward
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