underpayment of tax

working_forever

Hi there

Just wondered if anyone would comment on my tale of woe.

In February I received a letter from HMRC informing me that I had underpaid £3000 of tax. You can imagine I was very shocked. I have always been on PAYE and have worked full time for the past 40 years, never having had any problems with tax.

I telephoned to say there must be a mistake, but no, evidently in 2002/2003 while I was claiming childrens tax credits, (claimed for three years), the Revenue changed the way the credits were paid and my tax code should have been altered to reflect this. They say they would have sent notice of coding out to myself and my employer - neither of us received this notice. My employer wrote a letter to the Revenue confirming this and I appealed against this underpayment.

I wrote a total of six letters sent by registered post, (I have the receipts) and telephoned weekly to see if there had been a repy to my appeal. I only received a letter back to say I had not replied to them so they were changing the debt into self assessment. On 11th July during one of my telephone calls I was told that I had lost my appeal and that I now owed them £3800, as interest had been added to the underpayment (they has changed it into a self assessment debt, to enable interest to be added). But it has taken 6 months for them to decide and I still feel this whole situation is unjust. During one of my earlier calls, I was informed that on looking at my records closely a notice was not sent to my employer and it was doubtful or there was no audit trail for the notice to me, as it had been done manually. I have now paid the original amount, (through gritted teeth), as I have got myself in such a state abount it and do not sleep well, but I do not want to pay the interest, as I feel it would not have been added if they had answered my letters sooner.

I am still waiting for the official reply from them but feel I have been treated very badly. Has this happened to anybody else?

Yozzer

The tax system is not fit for purpose.
I am retired, and it has been discovered I had two tax offices dealing with my tax, (I knew of only one), both issueing tax codes, but only one of them sending it to me, tax codes completely different. My private pension was using the tax code issued by the office I knew nothing about for the last year, which I discovered when i got my P60 at the end of the last tax year.
Having now battled for months, waiting 52 working days for a reply, (outside their 42 day limit), I now have reason to suspect identity fraud. I have expressed concerns as I never received any communication on tax coding or forms from the office who has been suppling codes to my pension provider, and they have failed to explain how 2 tax offices can issue completely different codes, who they sent the coding to other than the pension provider, (they claim it was sent to me, which would have meant 2 tax codings which were different which would have alerted me), and how they now claim I am now underpaid! Concerns I have expressed regarding ID fraud totally ignored.
The tax system is a shambles, like many other systems in place at this point in time.
My wifes identity was stolen 20 years ago which became obvious under not very different circumstances, letters either ignored or passed off. In the end, it took only 10 minutes on the phone to locate the "other" wife who lived in Manchester. I reported it to the police, tax office, and anyone i thought would help, but to my knowledge, though they said it was sorted, nothing actually happened. When she retired it was a nightmare. The other woman had been claiming dissability allowance, and not paid into the government pension. Eventually her pension had to be estimated, and though ID fraud was accepted, as far as we are aware. nothing was done.
Sorry about the rant, but I can fully sypathise with you, it is an absolute disgrace what the government is getting away with at our expense.

ajbisgr8

Firstly, ask for your letters to be treated as an official complaint. The compalints teams have a lot more leeway in reolving matters than 'normal' staff. Explain that you never received any notice of coding and that this has been confirmed by HMRC staff, and that since the overpayment arose as a result of a change to their internal systems you could not have reasonably realised that there was a mistake in you coding. Point out that you paid the underpayment off and that the debt now relates to interest and charges, and point out that there was a substantial delay firstly in notifying you of the debt (tax credits haven't been paid via the employer for a number of years now) and then the delay in dealing with your appeal.

If you still get a negative response, try raising the matter with the adjudicator, who is kind of like HMRCs regulator.

ajbisgr8

FYI one of the tests that HMRC apply to complaints is the 'reasonable belief' test. If you can show that you hand resonable belief that you affairs were all correct and in order you're much more likeley to get a positive oputcome.