Advice on tax code please PAYE

mikeyboy

hi,

I hope someone can help here, as I am beginning to worry that a big bill will sitting on my doormat if I don't get to the bottom of this problem.

basically, I started working for my present employer in June 2009. I also got a company car in October 2009.

my tax code has remained at 647L M1 since start date.

The P11D which I have a copy of for the 09/10 tax year, shows my car as having a cash equivalent value of £2069.00. There was also a fuel cash equiv value of 1672.00

My coding notice which is dated 7th jan 2010 for the 10/11 tax year also shows my code !!! 647L.


Since April this year, i have opted out of the private fuel card and keep records to prove this

My concern is that I have had the company car for over a year, but still am on the 647l M1 code. Surely this tax code should be reduced to reflect the benefit in kind of the car?


I have tried ringing the tax office, but they are always busy and end up in hash button he'll. I wrote to them back in Feb asking for confirmation of the effect of the car, confirming my P11D etc, but have not had any reply.

Sorry if this is really long winded, but I am really concerned they will wollop me with a sudden tax increase.

Please help!

Thanks
My concern is that I have now had a company car for over a year and ye

mikeyboy

Forgot to mention, i am a basic rate payer currently.

chrismac1

You are right to be concerned. It's a shame they can't be more professional. First, keep back 20% of the value of the benefit so that when they finally wake up and bill you it does not lead to debt problems. I'd suggest raising a formal complaint about this with HMRC's complaints process. It moves at the speed of a snail with an elephant strapped to its back, but at least having done this it's clear for the future record that you've taken all the steps that con resonably be expected of you. So the usual tactic of blaming the employer / blaming the taxpayer / blaming the dog will not wash further down the road.

mikeyboy

Thanks Chrismac1

It is rather worrying that the revenue are in a position of power and can simply wait over a year and then slap me with a chunk of tax due.

I will have to start doing what you suggest and put a little aside each month.

Does complaining to the revenue ever do any good, I.e. Are they willing to admit they are slow and accept a lower amount and/or installments? If they ask for a large chunk i am probably not in a position to pay it in one go.

I just cannot believe how slow they are in sorting this whole thing out.
Thanks

Tarasam

Ok, you're right in the case of HMRC should have answered the letter sent in, agreed,
BUT
you've known that you had a company car and fuel (obviously no fuel now) and you've also known that your tax code was wrong, so why did you not perservere (sp?) in contacting HMRC by telephone.
I'm sorry and I do feel for you because you are going to get a bill, sooner or later, but the longer this goes on the higher the bill. I appreciate its hard to get through (I should know i'm on the other end of the phone working relentlessly trying to answer the calls) but there are quieter periods, the contact centres are open 8-8 Mon - Fri and 8-4 Sat.
You need to ring now and get the code amended asap to limit the damage, the code will be issued on a Wk1 basis and the underpayment looked at at the end of the current tax year.

Chrismac - your attitude and opinions of HMRC and the CCs are sad to say the least. All I see is your constant berating on here, I appreciate you deal with them on a regular basis and the service appears to have been poor BUT as an advisor some of the agents / accountants that I deal with on a daily basis also leave a lot to be desired. I had to explain SA Payments on account recently to an agent, that frightened me, the examples I could provide you would make your hair curl, some are appauling.

I agree that formal complaints are required and the more people that complain may eventually cause some sort of change in HMRC but I'm not holding my breath.

mikeyboy

Kellyshay, thanks for your reply.

Can you give me any indication as to how they will collect the ouststanding tax.. Will they amend the tax code to a K which pays it back overbthe next year, or will they want a lump sum?

I have an awful feeling I could be looking at thousands due :-(

suso

chrismac1 wrote: »

You are right to be concerned. It's a shame they can't be more professional. First, keep back 20% of the value of the benefit so that when they finally wake up and bill you it does not lead to debt problems. I'd suggest raising a formal complaint about this with HMRC's complaints process. It moves at the speed of a snail with an elephant strapped to its back, but at least having done this it's clear for the future record that you've taken all the steps that con resonably be expected of you. So the usual tactic of blaming the employer / blaming the taxpayer / blaming the dog will not wash further down the road.

this is a usual post from someone who says they are an agent but refuses to telephone HMRC on the dedicated agents line, because he might speak to someone who knows better than him, Its a shame he can not be more professional

HMRC response to letters they receive, at the rate of of receiving 2.1 million paper self assesment tax returns that means approx 5743 a day. spread over the year, add to that the normal post and you see the post situation they are in

John_Pierpoint

I telephoned HMRC to query a tax situation - it took me 53 hours to get through to someone who knew what they were talking about.

I won't be doing that again.

Can I have a dedicated line please?

p00hsticks

mikeyboy wrote: »

Can you give me any indication as to how they will collect the ouststanding tax.. Will they amend the tax code to a K which pays it back overbthe next year, or will they want a lump sum?

I'm not an expert, but I went through this a few years back with medical insurance.

If it's like me, chances are that your employer didn't produce the P11D for 2009-2010 tax year until around June (the HMRC deadline is usually sometime in the start of July) and HMRC didn't then adjust my tax code to reclaim the tax owed until the following tax year.

And it seemed to continue like that each year, with the figures from the P11D in July used to amend my tax code for the following year ....

mikeyboy

Thanks for all the replies, very much appreciated.

Can anyone clarify if HMRC will accept installments for the tax due, ie. Just adjust my PAYE code further? Also, can this be over more than one year, as if they want more than say an additional 200 a month it will be very tight on our budget.
Thanks

System

When the 09/10 is reconciled and shows an underpayment the normal procedure would be to collect it via a deduction from your 2011/2012 tax code. Obviously when the P11d is processed and the car and fuel benefits in kind are included in your code this will be an additional deduction. So you can ask for the 09/10 underpayment to be collected over a longer period than 1 year. The maximum is 3 years.

Bear in mind though that you will probably have an underpayment for 10/11 too and if HMRC do add the car and fuel benefit into your code in 10/11 on a week1 month 1 basis (non-cumulative) then the PAYE system will throw up what is called a "Potential underpayment" for 10/11. That is the systems estimate of how much tax they think you will owe from 6th April 2010 until the date in the 10/11 tax year that the new code is operated. That potential underpayment will automatically be included as a deduction in your 2011/2012 tax code.

So assuming HMRC reconcile 09/10 and process your P11D what you should expect to see in your 11/12 code from 6th April 2011 is

Personal allowance of £6475
Deduction for car benefit
Deduction for fuel benefit (if not corrected re non-use of fuel card)
Deduction for 09/10 underpayment
Deduction for 10/11 potential underpayment

So be aware of this when negotiating with HMRC the term over which you want the 09/10 underpayment collected. Also when 10/11 is reconciled some time after 5th April 2011 the actual underpayment for that year may be more than the potential underpayment the PAYE system originally estimated and so the balance of that will be collected in 12/13 from 6th April 2012.

I hope that's not too confusing