MSE News: Tax chaos Q&A: How to fight HMRC demands

becky8976

Hi,

Saturdays post delivered a letter saying they were not going to persue the 06/07 underpayment (worked it out to be £200) but we were responsible for the other years totalling approx £8,000. They have admitted in the letter that they did receive a P14 which is equivelent to a P60 but that it is not treated as notification of commencement of employment and that it's the individuals reponsibility to make sure the tax code is correct.

I don't understand why they think anyone would do this on purpose, which is what I get the impression they are saying! Surely they have a system in place where they should have contacted us back at the end of tax year 05/06 to let us know he had over paid by £1070.17. or maybe again the year after (they admitted they didn't and are not seeking it back) and then again in years 07/08, 08/09 and 09/10 when he owed £566, £3757 and £3563 retrospectively!! This is the point that they are not getting!!! Surely, it flags up that there has been an underpayment/overpayment and a letter should come out. We genuinely didn't understand the way the system worked and thought he was paying the correct amounts and continued to do so because we didn't receive any letters to suggest otherwise! Had we have received a letter back then I would have been in contact and would have understood that it's basically a tier system and had to phone them when we realised we were going to go over or fall significantly short of the previous years earnings.

I am getting a little tired of the standard line of 'It's the individual's responsibility to know they are on the correct tax code'. It seems that that is the line they use to try and avoid any responsibilty for lack of communications.

Thanks for all the advice and I am going to write to both of his employers asking them for details of tax code changes and EDI reports and see what happens. I am definately not giving up the fight, we can't afford to!

I even thought about bankrupcy but don't think that's an option really.

Good luck to everyone who's in this horrid boat.

Becky 8976

faineant

Success at last. 7 months later including 4 letters of appeals HMRC have finally backed down and applied ESC19 confirming no need to pay.:j

sethipushpinder

I have received letter saying I underpaid as I was in two jobs. what shall I do, sorry if already asked but do we have template letters?

Mikeyorks

But a template letter for what? A lot of the genuine underpayments are as a consequence of excess allowances being given because people have 2 jobs.

You first of all need to understand why it's gone wrong. If you post the details from the P800 and the similar details (Pay / tax / Code / year) from your P60s - someone may be able to shed some light?

antonic

How much profit can be made !:rotfl:

alunharford wrote: »

As a computer programmer, I have to ask how on earth somebody can produce a system so utterly flawed. Did nobody bother to do any of the calculations by hand to see if it works for one person?

notafreeman

Help/advice needed please + this may sound complicated but isn’t (hopefully), although it is lengthy so bear with me.
Basics – I received a letter from HMRC last year asking for my P45 1A for 2008/09 to check my tax payments for that year, which I duly sent off. I’ve subsequently received a P800 stating I owe them £700+ (don’t have documentation with me so can’t remember exact figure). I’ve asked for ESC A19 to be applied and sum written off on the grounds mistake was made by Benefits Agency and I notified HMRC of the discrepancy when I renewed my tax credits, but my application and appeal have both been rejected on the basis that HMRC doesn’t have a record of information being passed to them. All their decision letters just give this as a reason, no specifics.
Background: Lost job in November 2008, went on jobseekers allowance before finding full time employment again in October 2009. In April 2009, a P60U was issued by the Benefits Agency for the 08/09 tax year.
It showed my pay as £21,583.00 and a tax refund of £1012.60. What it should have shown was pay of £25,183, so someone had obviously mis-typed the amount and this I presume had generated the refund. I contacted the relevant Benefit Delivery Centre by phone (unfortunately didn’t note the date) to say the figure was at odds with the P45 that had been issued by my employer but was told by the BDC that the P60U was correct.
I also pointed out this discrepancy when I contacted HMRC tax credits, twice in July 2009, to renew my tax credits award, but was told it was not relevant. Other than the P60U, I have never received any letters or documents from the Benefits Agency explaining why a tax refund was generated and would therefore not have known if it was related to PAYE, benefits, tax codes etc.
Naturally, I forgot about it, believing that I had done all that was necessary and the tax authorities had everything they needed. So you can imagine how I now feel.
I’ve argued with HMRC that:
(a) I informed HMRC, albeit the tax credits section, so the information was in the hands of HMRC. They should have acted upon that information by either querying it further (they approved my tax credits on the basis of the ‘correct’ figure that was on the P45), or by relaying the information to the relevant department or by issuing guidance directing me to the relevant department.
(b) the Benefits Agency would have passed information to HMRC at the end of the 08/09 tax year about my income and tax for that year. That information should/would have included figures from the P60U or its equivalent showing pay and taxable benefit, tax deducted and any tax refunded. Therefore, that information including the generation of a tax refund would been in the possession of HMRC at the end of 2008/09. At that point the system should/would have shown there was a substantial difference from the P45 issued in November 2008 and the P60U.
(c) As the relevant information was in the possession of HMRC, or certainly should have been if processes and procedures were followed correctly, at the end of the 2008/09 tax year, it should have acted and resolved this matter during the 2009/10 tax year. Even allowing for delays, it should have been resolved by the end of the 2010/11 tax year i.e. two tax years after any error or otherwise first occurred.
That’s the general thrust of my argument. I haven’t mentioned the fact that every letter from HMRC has originated from different officers rather than one or two; they’ve managed to get wrong the dates the P800 was issued; my national insurance number incomplete; different dates given for full repayment, etc.
And to top it off, I asked for the return of my P45 1A, which is what sparked all this off, as the first HMRC missive had said: “Please make sure you send the original forms or letters to me. I cannot accept photocopies. I will return them to you as soon as I can.” So what do I get? Another letter with the following: “Unfortunately I am unable to do this as the P45 is not held. As this was handed into your local benefits office when you started claiming Jobseekers Allowance, the details will have been noted on their system and then the P45 destroyed.”
So the evidence I supplied to them as per their request seemingly doesn’t exist, and couldn’t have existed when I sent it to them!
Reason I’m contesting is that my circumstances have changed quite considerably in the last couple of years and I’m now on minimum wage, another fact they seem to have ignored along with my plea asking for any deduction to be spread over two or three years (received letter last week with tax coding – guess what, sum will be deducted in 2012/13 by adjusting my tax code!); plus I believe I’ve acted reasonably and notified them when I had to. I’m now at the stage where I’m reluctant to contact them or co-operate with them at all unless forced to.
Any suggestions as to whether I should or can take this further would be welcome. And again, apologies for such a lengthy post.

loveleelaydee

Hi notafreeman.
Im very much in a similar position. Have had a demand for almost £4000 as I had two employers using full allowance. This despite completing a p46 -which employer now conveniently doesnt have. HMRC are saying I didnt provide any info but as well as the p46 i told them as part of a child tax credit claim that i had two jobs about a month after i started second job. Been advised that child tax is not 'hmrc as such'! How the helll are we supposed to know that?! I have now received revised P800 calcs for a reduced amount (£3200) - no idea and no explanation why the amount has changed.
Ive been fighting this for two years as feel it is certainly not my fault when I provided all neccessary info in good faith. Any advice would be much appreciated.
Sorry not so much advice as moral support from someone in a similar situation freeman
Fran

Pennywise

Another angle for where an employer hasn't deducted the right amount of tax, is to check, not only when HMRC issued a tax code notice, but also to ensure they sent it to the right address (i.e. the employer's address). Ideally, you should obtain a copy of the notice to check all the details yourself.

I've been battling with HMRC to correct an employer address for two years now, and even after two formal complaints, and assurances from a complaints officer that the employer address has been corrected, they are still sending tax code notices to the wrong, old address.

So it's a possibility that the employer never received a tax code notice despite HMRC issuing it, and therefore claiming it's employer failure for a wrong tax code being used. In fact, if HMRC sent it to the wrong address, the blame points firmly back at them meaning even stronger grounds for the ESC to apply.

notafreeman

loveleelaydee wrote: »

Have had a demand for almost £4000 as I had two employers using full allowance.
Been advised that child tax is not 'hmrc as such'! How the helll are we supposed to know that?!
Fran

Initially they told me I had two employers using full allowance. No, no, no. I lost my job, sent off my P45 (as they admit in a letter I would have done as they no longer have it!), had a break abroad for five or six weeks, and then returned to sign on for jobseekers. Ref tax credits - the impression I get is different depts/sections just don't communicate and if tax credits aren't part of HMRC are they obtaining info from people under false pretences? The whole thing sucks. I think I'm going to carry on contesting it.
Suggest you get them to give you a full and proper reason/s for their decisions to change the amount they're demanding. If you get nowhere, try The Adjudicator's Office (google), their website says "The Adjudicator acts as a fair and unbiased referee looking into complaints about HM Revenue & Customs (HMRC), the Valuation Office Agency (VOA) and The Insolvency Service, across the United Kingdom." That's going to be my next step if I get nowhere with HMRC directly. Have fun!

Conorew_2

I got a letter about 2 months ago saying I had overpaid by around £700. Great I thought, I had just lost my job and this was a welcome boost. I still haven't found a job but hmrc have just sent another letter sayin I now owe around £700. How can they do this.
I believe everyone should pay their due's but if they made a mistake I don't think it fair that they then burden the innocent with their mistake.