P800 Underpaid Tax Medical Expenses

Gas_Powered_Toothbrush

sheepchick wrote: »

So they way i look at it, i signed the forms to join the medical benefit scheme, submitted to my employer, therfore they know my benefits and should of included this in my tax code. SO i think they should pay as I have done my part?

Nope.

The employer doesn't make any changes to your tax code, that's HMRC. And they'll only do that if they're notified of a benefit. The employer only has to notify them of this once a year via the P11D, which is done after the year's finished. When you started receiving the benefit, it was your responsibility to inform HMRC.

Now, if your employer knew their !!!! from their elbow they should have told you the amount of the benefit and suggested that you give HMRC a call. But a failure to do this is just a lack of common sense on their part, and not grounds for getting the underpayment written off as employer error.

dori2o

sheepchick wrote: »

So they way i look at it, i signed the forms to join the medical benefit scheme, submitted to my employer, therfore they know my benefits and should of included this in my tax code. SO i think they should pay as I have done my part?

This is where a lot of people get it wrong.

Although your an employee with a salary taxed under PAYE, the responsibility to pay the correct amount of tax lies with you, the individual.

HMRC can only be sure the code they issue is correct if they have the most up to date information possible. Employers can only operate the tax code that is given to them by HMRC.

Alan_T_2

dori2o wrote: »

HMRC can only be sure the code they issue is correct if they have the most up to date information possible.

Or in my case ignore the P11D information sent to it and send out an incorrect tax code to my employer resulting in underpayment. Although it seems that they appear to have done this to everyone that I've spoken to with a staff mortgage at my team, so it looks like they ignored all P11Ds sent in for the company I work for.

joncombe

I have also had one of these letters stating I have under payed by £89.60 for the tax year 2010-2011. I only got the letter on Friday even though it relates to the tax year 2010-2011 and we are now in the 2012-2013 tax year! Like the original poster it relates to private health care.

I left the company in March 2011 but they sent me the P11d showing this benefit and the same amount (£444) as on the P800 I got from HMRC so I do know that a correct P11d was issued. The letter from the company is dated 23rd June 2011. I have been in contact with the company and they have told me that they sbmitted this form on time. However I have not had a letter saying my tax code changed.

So it seems to me HMRC have been provided the correct information but have failed to apply it to my tax code. Do I have grounds to appeal given that it has taken them over a year to claim I underpayed tax and they have been provided with the correct information on-time? I have telephoned them about it but they said they did not recieve the P11d until August 2011 and so it was issued too late. Obviously I didn't generated the P11d but I know that it was generated correctly as I have a dated copy and have no reason to dispute their claim that it was submitted on time given that they have 100s of other UK employees and told me they have had no one else affected.

The company I currently work for has also just issued me a P11d so I will be interested to see if HMRC issue a new tax code based off that...

System

The short answer (based on what you've posted so far) is ESC A19 is unlikely to apply. The longer answer is depends, if there's more to it.

The starting point is HMRC have 4 years from the end of a tax year in which to notify you of underpaid tax - unless ESC A19 applies. The slightly oversimplified version would be....

ESC A19 could apply if HMRC held information about your benefits during 2010-11 but failed to act on it at the time and, by extension causing the underpayment.

What you'd need to look at in the first instance is what info HMRC had during 2010-11. For example, did you tell them the benefits in your tax code were wrong? If not then consider what your employer told them. For example if you received benefits in kind during 2009-10, your employer would (in normal circumstances) notify HMRC of these by July 2010 (2010-11 tax year). Did HMRC make use of this info? If the underpayment arose because of an increase in the value of your benefits during 2010-11 or benefits received for the first time during that year, HMRC would not have been notified of this by your employer until July 2011 (2011-12) in these circumstance HMRC would not have caused the underpayment and ESC A19 cannot apply.

You might also have a problem with the reasonable belief test within ESC A19. But that's a whole different matter.