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

Paul_Herring

pennypinchingmum wrote: »

But you'll find that a19 helps people who (like us) have always provided the right information but the tax office have not acted upon it in the required time. In case you don't believe me, which i'm assuming you won't, i'll include a direct quote-
was notified of the arrears more than 12 months after the end of the tax year in which the Inland Revenue received the information indicating that more tax was due,
http://www.hmrc.gov.uk/manuals/epmanual/ep6601.ht

Quote-mining is rarely a good idea. Lets have some context shall we?

Tax will normally be given up only where the taxpayer
* could reasonably have believed that his or her tax affairs were in order, and
* was notified of the arrears more than 12 months after the end of the tax year in which the Inland Revenue received the information indicating that more tax was due, or
* was notified of an over-repayment after the end of the tax year following the year in which the repayment was made

If, for example, you've been telling HMRC of changes of income, and you're not receiving updated P2's that reflect the change as a result, you can hardly "reasonably believe" that everything's in order can you?

Or am I being unrealistic here? I don't think I am.

DarkConvict

Paul_Herring wrote: »

By the same reasoning, then, you would refuse to accept any payment from HMRC if you'd discovered you'd overpaid instead?

Thought not.

It is your responsibility to ensure you're paying the correct amount of tax, not HMRCs. When you get your P2, you should check to make sure it is correct, not just ignore it or throw it away.

PAYE is simply a system that allows people to spread the guestimated amount of tax throughout the year, instead of in one lump sum at the end of the year. If HMRC aren't supplied with the correct information to make that guestimate, then they can hardly be blamed for getting the tax codes wrong.

Granted HMRC do have some of the blame, but you'll notice that those that do supply HMRC with the correct information (via self assessment for example) won't be getting these notices.

I agree and disagree.

Ultimately they work on the information given, and if that information is wrong mistakes do happen.

But in my post (#2), I gave them my honest answer and the accurate information they had asked for on the form. Even though they actually meant they wanted different information, which they later admitted to me on the telephone.

People can only fill in forms to the best of these knowledge and based on what the question is asking. If the question is wrong and the wrong information is supplied, this is an issue with the tax office.

I would prefer to have been overtaxed and then given a rebate, because when you think your tax is right you spend/save on your given monthly income not realising your actually £100 better off than you should be. At least with a rebate it is 'extra' money ontop of what u had budgetted.

Tax will normally be given up only where the taxpayer
* could reasonably have believed that his or her tax affairs were in order, and

But the government does not teach people how the tax system works, so most people have to assume the HMRC got it right, with no knowledge of the system they could only reasonably assume it was correct.

I assumed tax codes should all match up across incomes as i was told you get only 1 tax code, this was not the case. If my tax codes were different from child pension to a pay slip I would have quizzed it with my employer/HMRC.

zygurat789

pennypinchingmum wrote: »

Hello all,
Unfortunately we have today recieved a letter saying my husband has underpaid and owes (what is for us) a large amount of money. However it was for the tax year 08/09 and his employer sorts out all tax. So i'm hoping we can appeal but i'm unsure of how to do this so i'd like some advice?

First of all you need to find out if the underpayment is correct.
Do you know why there was an underpayment?
You need to understand this before going to HMRC.
The employer does not sort out all tax he merely operates a rigid government system the key variable being the code number.
It is your responsibility to ensure this code number is correct, however, we see many on here who don't understand any of it.
This really is a subject which should be brought up in the last year of schooling, after all school is supposed to prepare us for our working lives.

jammydodger0905

I just finished paying back nearly 4 years of underpaid taxes due to an HMRC error. My company was sending them the correct information, but they lost it all when their computers crashed so just stuck me on my old code, which was wrong! When I approached them about getting a rebate, they sprung it on me that I had actually been under-paying for nearly 4 years! I had to pay back every penny! I wish I had known about this clause....It could have saved me £1300! :mad:

chrismac1

One major piece of advice not given a high profile so far - there is a good chance your asssessment is wrong if you get one!

A client of mine has had a bill for 1,500 on the basis that 2 years ago he had a tax-free allowance from 2 different employers. NOT TRUE! In fact neither employer gave him a personal allowance, so HMRC owe him 1,800!

The computer system is awful. One example:

1. On my mobile I had one HMRC staff person telling me the screen said my client owed £200, they were threatening legal action.
2. On my landline - at the very same instant - another HMRC person was correctly confirming my view that his account was totally clear.

Eventually after much "jobsworth, no I can't do that" stuff I persuaded person 2 to call person 1 and confirm to her that her computer screen had the wrong tax bill.

So - if the HMRC computer cannot even show 2 of its staff people the same amount of tax due from the same taxpayer at the same instant in time, just how much chance is there that a bill they send to a given taxpayer is correct?

This whole thing has been one big mess from the day Gordon Brown announced HMRC was being formed.

chrismac1

I also want to add that my sympathies are 99% with the taxpayers here.

Under 13 Labour years, the UK tax code more than doubled. Tax credits came in, causing chaos as HMRC - which is all about getting money in - were being asked for the first time in their existence to pay some out. Self assessments came in. Revenue merged with Customs. A new computer system came in with totally inadequate testing. Tax offices were closed, good staff laid off - some of my clients have had letters from 10 different tax offices. All corporation tax in Cumbria is dealt with in Aberdeen, if you ring there 10 times you'll be lucky if it is not engaged one of those times.

Self-assessment is in many ways a mess, especially for people who rely on HMRC staff and its website and do their own returns. These folks usually get badly burnt and finish up with accountants, some of my clients are in this category.

PAYE is an absolute stroll in the park compared to self-assessment or corporation tax, it's a national disgrace so many mistakes have been made. Anyone who gets a tax bill as a result of this fiasco should make sure its checked out by someone who knows what they are doing, and who will charge a reasonable fee for doing it.

rentawitch

What worries me in the wording of ESC A19 is the Revenue have to ask for the money within 12 months of the end of the year in which they received the information.

An employer sends the year-end details of payroll on forms P35 and P14 to the Revenue AFTER the end of the tax year. For 2008/09 for instance, the P35 has to be with the Revenue by 19th May. Therefore the 12 months following the year in which information was available is not up until 5 April 2011.

I think this is the date the Revenue are likely to use when looking at ESC A19 claims. If they tell you about the underpaid tax before 5 April next year, then on the surface, A19 will not apply.

Unfortunately, if the amount you owe is less than £2,000 the Revenue will collect through your PAYE code next year. You will have to be very aware and challenge any such coding notices if you receive them.

Personally, I think everyone who receives such a demand should state clearly they do not think they should pay and if necessary, should get together with others in the same situation and resist. The embarrassment may well make the Government climb down.

Especially faced with concerted Civil Disobedience from all parties concerned.

I work in a firm of chartered accountants on the personal tax side and my clients should not be effected because we file tax returns for them.

I would certainly try the A19 route and see what the Revenue say.

BoGoF

I really don't think people should get their hopes up about getting tax waived under ESCA19.

As has said before there are 2 conditions that must be met, the delay aspect and the reasonable belief aspect.

Even if it is agreed a delay has occured 9 times out of 10 the reasonable belief test will fail.

hannah8008

Is it written in law that we have to pay tax on our income?

BoGoF

hannah8008 wrote: »

Is it written in law that we have to pay tax on our income?

No, the Government thought it would just help itself