Can you appeal against underpayment of income tax ?

ASR

I have just received a notice from the Humber Area tax office saying I have underpaid tax, cumulated from tax years 2005-6, 2006-7 and 2007-8.

Reason being they did not include company car, fuel and expenses benefits on their coding notices sent to me/my employer the for the first 2 years and 3 months of my current employment which started in June 2005.

Can anyone tell me if I have any right to appeal/complain, if anyone has been in a similar situation, or what HMRC will do to my tax code/payment ?

Bizarrely on the same day I received a new coding notice which does not give any reference to this.

Any advice/comments would be greatly appreciated !!!

Elaine_Wilson

Depending on the actual form of the notice you may be able to appeal but in any event you can certainly challenge the calculation if you think it is wrong. An appealable notice will always have a statement informing you of your right to appeal.

Have you been sent details of how the figure is arrived at? If not, ask for these and check them thoroughly.

I suspect (as I think you do) that the figures are right and it is the method of collection which is worrying you. As the figure is under £2,000 they may well collect this from you over the year 2009/10 by an adjustment to your code number. This would mean additional deductions of about £137 per month. As the debt has accumulated over nearly three years it may be possible to arrange for it to be collected over a longer period but I doubt you can demand this.

They may be amenable to negotiation as they have not kept your code number up to date but don't push this aspect too hard because in fairness you should have noticed this fact by the end of July 2006 at the latest and told them about it by October of that year.

fengirl_2

To add to what Elaine says, HMRC will take the view that you knew you had a company car and that this is a taxable benefit. You will also have been provided with forms P11d detailing the amount of the benefit each year.
Take the view that you have had an interest free loan from the government for the past 3 years.

MarkyMarkD

Is it not possible that it's in fact the employer's fault for failing to submit the necessary forms to HMRC regarding the benefits? If it is their fault, then you should consider asking them for some cashflow assistance with the impact of their error.

But as the others have already said, you've actually had an interest free loan from HMRC and you should yourself have been aware that your notices of coding should have included the taxable benefit associated with your company car.

WH39

ASR

Find myself in the same position, but its HMRC fault having been paid weekly for a year and then moving to monthly paid, HMRC failed to transfer all information for my fuel allowance. I would point out that we receive our tax code and p11d forms every year, you look at them to see that your car information is correct ie (its the right car your been taxed on) so why would you question the figure that they send us. got a meeting this week to sort out the sorry mess I find myself in due to some horses !!! at HMRC not doing there job I will be looking for them to alter my tax code and I will be seek to have it done over 2 year. (£1300.00approx):mad:

ASR

Thank you all for your info.

These benefits are clearly shown on my P11D forms, hence the reason I never questioned it. However of course my wage slips have the higher tax code with no deductions. As a young person with no previous experience in a complicated 'taxing' system, I was not to know that this tax code meant it was not being deducted. It appears all necessary info was submitted to HMRC by my employer and is their internal error. I am now not in a position to take in a cut in my wage on their behalf as I'm now a homeowner with a mortgage and a tight budget without an allocation for surprises such as this, which will be the base of my argument when I tell them where to go. Of course it is unclear at this stage whether a complaint/appeal to the general commission would be successful in the slightest, I can but try.

RayWolfe

And you never got any notices of coding?
I think you will find that they will take the money by changing your code for future tax but there is no way you will end up not paying it. Get used to it or you will end up disappointed.

ASR

Yes as I've stated I received Notices of Coding which did not deduct the benefits, but due to the P11D forms listing the benefits and an increase in tax being paid I had no reason to suspect it wasn't being deducted. Furthermore I cannot see why, even with a small chance for success, I would give up and let them charge me as they please for their error.
:money:

mtem74

Sorry but I agree with the others. You've had the car and never thought to check with the tax office you were paying the right tax. Others at your job must have moaned about the level of tax they were paying, so that could have been a hint. You've had the coding notices.
At the end of the day the onus is on the indiviual to ensure his/her tax affairs are correct. A phrase you'll hear alot from HMRC

Elaine_Wilson

ASR wrote: »

Of course it is unclear at this stage whether a complaint/appeal to the general commission would be successful in the slightest, I can but try.

Be careful what you say if you take this approach.

The Commissioners are there to resolve disputes about the amount of a liability where there is a disagreement between the taxpayer and the Revenue. Appearance at a hearing involves HMRC in a fair amount of work. A threat to call for a hearing can therefore be powerful when the point at issue is a grey area and a precedent will not be set by them backing down.

Your argument is not about the amount of the liability (if I understand everything correctly). So an appeal to the Commissioners is not appropriate. If you insist on this and your is appeal is thrown out I think you will find it harder to negotiate an extended timescale for repayment of your liabilities.

I do sympathise with your position but, technically, you have failed in your duty as a taxpayer. You had sufficient information to determine your were underpaying tax and did nothing about it. If I were advising you I would suggest you first check the amount owing is correct and then play on the fact that you were aware that all relevant info had been submitted by your employer to negotiate an acceptable repayment plan.