Underpayment - Wrong Code for 5 years!

John_Pierpoint

jimmo wrote: »

No! No! No!
If you are going to claim under ESC A19, which is probably your only real hope, it really might be a good idea to familiarise yourself with it.
Take a look here.
http://www.hmrc.gov.uk/esc/esc.htm
Take a particular look at the reasonable belief test.
If code 973T has been used incorrectly for so many years and you had no reason to think it was wrong then you should be successful.
If you claim that you told HMRC that the code 973T was wrong but they continued to operate it, you cannot possibly claim that you had a reasonable belief that your tax affairs were in order.

This is a dangerous situation and just makes the relationship more adversarial.
I have recently received a letter from "the tax man" in response to a letter of mine about "Qualifying Time Deposits" saying that no further tax was payable. I'm 90% sure that the writer did not understand the situation, so I sportingly wrote back explaining in further detail and enclosing a section from the on-line tax manual.

What these instructions seem to say is "Don't try to be helpful" and "never make a statement always ask a question" then when it all goes pear-shaped one can fall back on the "You are the experts I am the idiot" defence?
Well in my case that is sometimes true!

Joe_Totale_2

Well it's not looking good, phoned HMRC - got a rather unhelpful lady who told me that the Tax Code error was my fault/responsibility.
She said that I received a P6 with the correct code (I didn't) and I should always check that my employer was using the right code (stupidly I had no idea what was correct). Tried to explain that I had worked part-time for the last 11 years, for the same charity, same hours - no other job.
Only difference being that years ago my WTC was included in my pay, but 3 - 4 years ago that changed, and was paid directly into my Bank ( I think that could be reason the code changed).
Going to be a major struggle to pay this, especially as hours will be cut soon (though that should bring me in under the personal allowance for next year!!).
Oh well!

[Deleted User]

Did you find out why such a high code was ever issued in the first place?

Joe_Totale_2

Deleted_User wrote: »

Did you find out why such a high code was ever issued in the first place?

They say their records dont go back that far!!!
Probably on a CD somewhere, in some cupboard, in some Tax Office, somewhere in the UK;)

Mikeyorks

Joe_Totale wrote: »

They say their records dont go back that far!!!

Which is rubbish.

They recently consolidated the old PAYE system (COP) onto a new system (NPS). They may not have immediate view of the old .... but it's certainly still available.

Write to them setting out your appeal ......... phoning them isn't going to get the considered response you need. Unless they can prove a subsequent code was issued ..... the 'T' in the code giving the problem indicates they should have kept it under review - and haven't.

Joe_Totale_2

Mikeyorks wrote: »

Which is rubbish.

They recently consolidated the old PAYE system (COP) onto a new system (NPS). They may not have immediate view of the old .... but it's certainly still available.

Write to them setting out your appeal ......... phoning them isn't going to get the considered response you need. Unless they can prove a subsequent code was issued ..... the 'T' in the code giving the problem indicates they should have kept it under review - and haven't.

Cheers for the advice Mike, all the lady at HMRC was saying was that it was my responsibility as they had issued me a correct code at the start of every year - I've never seen 'em, my employer says he hasn't (though dont know if they would???). Also HMRC told me to find the original form that had the errant code [they?] issued in 2001, they told me my employer should still have it. This bit could be problematic - My original employer ran out of funding 3 years ago, all departments including accounts made redundant, except mine, my department was taken over by another charity; I was kept on under TUPE, accounts now run by chartered accountants.

ps What does the T stand for?

Mikeyorks

Joe_Totale wrote: »

ps What does the T stand for?

Under the 'reason for use' regarding the letter 'T' :-

If there are any other items we need to review in your tax code, for example the income-related reduction to the Personal Allowance

As regards the rest. I would tend to agree with HMRC that most people (20M per year issued ... some 16M before the start of each tax year) get a P2 Coding Notice.

But you say you haven't ...... and your employer is still operating one issued 9 years ago! Which either moves the onus of proof back to HMRC to say why neither of you are aware - or moves the onus back to them to investigate why your employer is not operating PAYE correctly and allegedly ignoring Codes issued annually.

The 'evidence' is that you seem to have dropped down a crack somewhere ...... in this case it strongly suggests ESC A19 is applicable

Joe_Totale_2

Phew!!!
Well after 5 months, today I received confirmation that my claim under the A19 clause has been accepted, it's been a rather fraught time, thank goodness it's over:j