Six million people have underpaid or overpaid tax

Oneday77

Your PAYE tax code is your own responsibility to understand and query.
I work for a Payroll Software company with customers that may have 50,000 employees. How can they possibly know that a code supplied by P6 from the HMRC is valid for that EE. People could have second incomes, pensions, investemnts or savings that adjust the codes. That isn't an Employers responsiblity to check.

This is pure speculation but my guess is the people affected will be people who have switched jobs or have taken on second jobs. Situations where your code is likely to get lost\changed\mis-managed.

barak

I heard an accountant [I believe] on the radio today saying that there may be cases where HMRC should not be recovering any underpaid tax. This could be where the error was HMRC's [which seems to be the case] and the taxpayer had no reason to believe that their coding was incorrect.

He referred to 'A19'.

http://www.hmrc.gov.uk/manuals/epmanual/ep6618.htm

dori2o

suso wrote: »

at the end of each year, your PAYE account is assessed.

If there are documents missings , (eg P11d's, P60/P45/P14's) then your year is classed as being "open" and will be reviewed manually,

according to the national audit office report published earlier in the year, there are approximately 16 million tax years currently classed as being open. affecting some 13 million individuals. the estimated timescale for clearing these is 4 years.

If your year is classed as being open from more than 2 years ago then yes they will review it, if its classed as being settled then unless you ask for more information then they will not review it.

HMRC are proposing to write off collecting underpayments from PAYE from over 4 years ago, in preparation for the reduction in timescales announced a couple of budgets ago, (2008 i think) where from 2012 they will only review the last 4years tax rather than 6 years.

As regards penalties, no, there are no penalties connected with an individual PAYE payment, if the underpayment is large and cannot be collected through the tax code, they you will be given 30 days to pay or you will be put into self assesment, once in SA then penalties, interest do apply.

When NPS came in all years prior to 08/09 were cleared as balanced if they were still open.

The cases that have been reported are for 08/09 and 09/10 only, HMRC staff, especially those in customer facing/contact roles were advised of this matter a number of weeks ago. The only way HMRC will review years prior to 08/09 is if the customer specifically requests an assessment for that year.

As has been said, it is likely that those who have overpaid fall into the following groups.

1) Moved employer but not handed in p45, or incorrectly completed/submitted p46.

2) Had more than one employment at the same time and both employers used the emergency tax code, therefore giving the personal allowance twice.

3) Were higher rate tax payers on their total income but no tax has been deducted at the higher rate.

There will be no penalties for this assessment and in 99.9% of cases no intrest added to the balance.

Anyone who receives an assessment that confirms that you have underpaid, especially for 08/09, and the underpayment arose as you did not keep HMRC informed of changes, may want to consider appealing on the basis of Revenue Delay. HMRC would normally be expected to complete these assessments/reviews within 12 months of the end of the tax year, and as this time frame has now passed, you may be able to argue that the charge should be waved on this case. It may be accepted, it may not, but you have nothing to lose by trying.

woolysheep

:mad: Hi there, I received the dreaded brown envelope today from HMRC stating that I have underpaid my tax by £3,762.80 for the tax year 08/09.
I have worked for the same company for twenty years and recently in 2008 my job was reassessed and I got a £2540 pa pay rise bringing my income up to £17,855 pa. Increments continued and in March 2009 I was earning £19.308 pa. I also took another p/t job within the same firm in 2008 earning perhaps another £200 pm.(12,577 pa) The Tax Code for this p/t post was BR, my substantive post was taxed according to HMRC's P800 and it tallys with my payslips.
The letter today states that I earned £53601 :rotfl: (Flat Rate Job Expenses :- £60
Job Expenses:- £18 £53,601 less £78 is £53,523
Total:- £78

Personal allownce:- £6035
Income Tax is chargeable on £47,488
Basic Rate @20% £34,800 £6,960.00
Higher Rate @40% £12,688 £5,075.20
Tax Chargeable:- £12,035.2
Tax Underpaid:- £3,762.80

Will someone please advise me. Can this be correct?

morgani

Just to let you know there are a group of us accountants including myself that are offering a FREE service on UK Business Forums see http://www.ukbusinessforums.co.uk/forums/forumdisplay.php?f=122

We decided to get together to help out the millions of tax payers affected by this and help for free.

There is a helpline set up which is 01480 718 418.

Simply leave details and your situation will be dealt with by one of us.

We done this through our good nature to help out those of you unfortunate enough to be effected by HMRC. We do not receive any income and by doing it through a central system we can each reduce the workload and admin involved and help many more people than one of us alone could.

chrismac1

Wooly sheep - to answer we're going to need to know the following details from your P60s for 08/09:

Final tax code, gross taxable pay and tax paid.

on the face of it this could well be yet another howler from the HMRC fiasco machine, but without the details we can't be sure of that.

dori2o

woolysheep wrote: »

:mad: Hi there, I received the dreaded brown envelope today from HMRC stating that I have underpaid my tax by £3,762.80 for the tax year 08/09.
I have worked for the same company for twenty years and recently in 2008 my job was reassessed and I got a £2540 pa pay rise bringing my income up to £17,855 pa. Increments continued and in March 2009 I was earning £19.308 pa. I also took another p/t job within the same firm in 2008 earning perhaps another £200 pm.(12,577 pa) The Tax Code for this p/t post was BR, my substantive post was taxed according to HMRC's P800 and it tallys with my payslips.
The letter today states that I earned £53601 :rotfl: (Flat Rate Job Expenses :- £60
Job Expenses:- £18 £53,601 less £78 is £53,523
Total:- £78

Personal allownce:- £6035
Income Tax is chargeable on £47,488
Basic Rate @20% £34,800 £6,960.00
Higher Rate @40% £12,688 £5,075.20
Tax Chargeable:- £12,035.2
Tax Underpaid:- £3,762.80

Will someone please advise me. Can this be correct?

Well if your earnings decribed above are correct then no, as the calculation states you earned £53000, unless there is something you have not told us.

You need to ring HMRC and find out what income they have used in the calculation, and what these sources are. it may be that they have received 2 P14's from one employer, it could be they have doubled up on your income for some reason.

Whatever it is, the sooner you can get in touch and find out what the reason is, the sooner you can confirm if the calculation is correct or not.

woolysheep

Hi there,

I have in front of me my P60 for 08/09 Total pay for year £26,800
Tax Deducted £4136.29.
NI Contributions £756 Earnings above Earnings T'hold:- £17565.
Employer's Contribution:- £1691.22.

TAX CODE 0611L0

woolysheep

Hi, thatnk you for replying. My P60 for 08/09 is as follows:-

Total Pay £26,800.53 Tax £4136.20

S'ANN.

£1,263

NI Cont. £756 - Earnings above T'Hold £17563 - Employer's Contrib.
£1691.22

P/Time Job:- PAY £5429 TAX £1194.38 Earnings Above £5429
Employer's Contrib. £597.

Woolysheep

chrismac1

Wooly, looks like you've had a wally on your case! The taxable income they've quoted you is exactly double Job A. This is rare, but not unheard of. What happens is someone has two jobs, with income A and income B.

The wally takes the figures and goes A plus B = 2A instead of A+B. Spookily in every single case of these I've heard of - 5 or 10 - the answer is 2A where A is the higher salary. Does this mean they sometimes come up with 2B, give massive tax rebates and the taxpayer just lies low? Who knows.

Your immediate task is to badger them like hell on how the 53,601 was calculated. Badger, badger and badger - do not accept jobsworthy drivel over the phone as an answer. This is one the phone helplines should be able to resolve quickly for you.