Does anyone understand ESC A19? Underpaid tax

heidi279

Hi again - thats great I will do the letter this week - thanks very much for all your help - as mentioned above I think 2009/10 will have to be paid but I hope that 2008 -09 can be adjusted as had all they correct information to hand. Will put an update on this thread when I eventually hear back. Many thanks eveyone Hx

mrkbrrws

I'm not aware of any law that requires employees to tell HMRC about a source of income they receive under PAYE. That's not to say that the tax isn't properly due though.

heidi279 wrote: »

You would think that the HMRC computer would be able to work out that my OH has two incomes (one of which never changes).

Which is exactly what they have now got - it's this new computer that produces these calculations.

The problem you might have is whether HMRC received information by 5 April 2009 that indicated higher rate tax would be due on the pension in 2008/09. They probably could only know that in May 2009 when they received the P14's from the employer/pension payer. They then have 12 months from the end of the tax year, which is 5 April 2011.

jennifernil

All these underpayment demands really do show how little many employees know about the tax system. I find it surprising that people do not show more interest in making sure they are paying the correct tax, especially as they are just as likely to have overpaid as underpaid.

If you have straightforward earnings, pension, savings, it really is pretty easy to check if you are paying the correct amount of tax. Info on allowances and tax bands is freely available on the HMRC website, so those who are able to come on MSE, for example, have no excuse for not knowing these figures.

Pennywise

jennifernil wrote: »

Info on allowances and tax bands is freely available on the HMRC website, so those who are able to come on MSE, for example, have no excuse for not knowing these figures.

Using that logic, you could say the entire MSE website is pointless as virtually everything discussed is already widely available on the internet.

jennifernil

That is not what I meant.

I meant that if people have computer and internet and knowledge to use them, they have both the means and the intelligence to be able to check their tax allowances. What is missing is the interest.

People check prices on the internet, do shopping, banking, swap utility providers.........why not find out about Income Tax too?

Everyone who gets a refund now will be very happy to accept it, but those who have paid too little tax, often for many years in some cases, are obviously not going to be happy to be asked to pay. But they have had the income.

I wonder how much of this tax will be written off? Is it significant?

chrismac1

I think heidi is getting some undue criticism here. In order to know that he was due to pay some 40% tax, her other half needed to:

1. Know exactly what his taxable gross across both jobs, inlcuding any benefits but less any tax-allowable expenses.
2. Keep up to date with the tax system to know where the 40% tax started - bearing in mind we get lots of posts on here thinking it is 37,400 and not 43,875.

In my experience about 20& of uk taxpayers with more than one source of income have this level of knowledge, it does not help that so many employers take months to issue P45s. Are we really saying that a Court would impose a duty of care on Heidi's husband that only 20% of the populace could meet - I doubt it!

Of course there were people who were in an excellent position to correctly assess the tax due, within about 40 days of the end of the tax year in question. By then they had the gross taxable pay from each job, and they also knew where the 40% tax level started. These people are known as HMRC. In my view a Court very much would expect these people to have a duty of care to correctly assess the tax bill in a case like this.

So if the reasonableness test is the one that matters on Esc19, unless somoene has been late in submitting a P45 or has filled in a P46 incorrectly, for me Esc19 should be allowed and the tax bill reduced accordingly.

jennifernil

I was not criticising anyone in particular, just making an observation.

The public in general seem to have very little interest in finding out about tax and how it works.

We have seen many posts on here where people have been paying far too much tax, there was one person the other day who had been on code BR since 1998 or something, so has lost a lot of money as they can only go back to 2004 to reclaim.

And we have seen quite a few where they have been getting 2 allowances against different jobs or pensions.

So the 2 extremes.

Winners and losers. I wonder if they cancel each other out?

I myself am not a taxpayer, so have no axe to grind, but I have made sure that I have read all the stuff HMRC have sent to my husband, and since getting broadband have used the internet to find answers to any questions as far as possible.

OK, there are people that have complex tax affairs, but I reckon the majority are fairly straightforward.

With the help of the info available from HMRC, or other sources, and a simple calculator,or even a paper and pencil, are you really saying that 80% of us cannot subtract our allowance from our earnings and figure out the correct tax??

If so, then ...........I don't know.........no much wonder the country is in a mess!

moneyfoolish

Well, as far as I'm concerned, if we're all supposed to spend our time checking our tax when we're on PAYE and it's not the responsibility of the Inland Revenue to make sure it's calculated correctly when they have been given all the correct information then they may as well scrap PAYE altogether and make everybody do a Self Assessment!

John_Pierpoint

You have got to be joking.
Self assessment involves double checking every penny of (already taxed at 20%) income and reporting that too.
There is often something that does not make sense - companies no longer send tax deduction statements as a matter of course and of course in the 2009 recession a lot of share dividends were skipped.
For standard rate tax payers, checking its right should be half an hour's work on-line or on the back of an envelope.

chrismac1

For me, the bottom line on PAYE is:

1. It started in 1944 and has operated without major glitches until about 2008.
2. Many other countries operate PAYE and I am not aware of any massive problems.

So the buck stops with HMRC / Gordon Brown. Too many database changes forced through at 100 miles an hour with laughable system testing before going live.

The fault lies with HMRC. No excuses, no ifs or buts or maybes. That is where the fault lies, and they need to fix it within the current operating method where they get the end of year information - not try anything even more ambitious like the idiots at the top are pushing for. And in the meantime they need to be a whole lot more reasonable with the hapless taxpayers caught up in this mess.