Supposed £7,300 paye underpayment 08/09 and 09/10

payevictim

Hi Everyone,

I rang HMRC yesterday to sort oun an error on my tax code for 2011/12 and was informed i had a letter on its way out informing me of an £7,300 tax underpayment, £6,500 was for 08/09 and £800 from 09/10.

To say i feel physically sick is an understatement. This has arisen due to having a company car up to 01/04/2010. I have no issue paying the last years amount as i can see where the error has occurred and they are notifying me within the allocated 12 months however the 08/09 bill is ridiculous.during that period i had 4 different company cars (due to one being stolen mid year and then being given pool cars that were always near end of lease and then having to go back to lease company).

The really frustrating thing is that they were notified of all changes and my tax code was changed twice in the year.

I really dont know where to go from here as i am worried that my next two years are going to be hell because of this.

I have read about people challenging the letters due to the HMRC not acting within appropriate timescales etc, would this be applicable to me?

Any help would be greatly appreciated

James

System

First you need to check that HMRCs calculations are accurate.

If they have been adjusting your tax code because of the company car changes, there is a good chance that they have miscalculated.

You need to check your P11Ds and P60s for the two tax years against your P2 Coding Notices and the P800 letter(s) when it arrives.

Post the figures on here if you need help with the checks.

payevictim

my P2 for tax year 09/10 (dated 11,01,2009 so based on previous 08/09 figures) states:
your tax code is K494
Here is how it is worked out:
your personal allowance is £6475
Car benefit is -£9542
reduction to collect unpaid tax £753.46 is -£1883 Total -£11425
tax is due on -£4950

This is just a holy mess, i have been on a K tax code for 3 years as it always seems to be wrong.

I'm so fed up with this and that why i opted out of the company car scheme, help!

James

System

payevictim wrote: »

my P2 for tax year 09/10 (dated 11,01,2009 so based on previous 08/09 figures) states:
your tax code is K494
Here is how it is worked out:
your personal allowance is £6475
Car benefit is -£9542
reduction to collect unpaid tax £753.46 is -£1883 Total -£11425
tax is due on -£4950

This is just a holy mess, i have been on a K tax code for 3 years as it always seems to be wrong.

I'm so fed up with this and that why i opted out of the company car scheme, help!

James

You definately need to collect together as much documentation as you can going back through several tax years until you can be sure that you can check all the calculations.

Your P60s will tell you your total earnings, tax paid and final tax code for each tax year. Check the tax code against the relevant P2 to make sure the appropriate code has been used.
Check that the tax code on the P2 was calculated correctly.
Then check that the tax owed for previous years is accurate as shown on the 09/10 P2 - i.e. "reduction to collect unpaid tax £753.46"

Does the figure of "Car benefit is -£9542" agree with your P11D ?

It's a case of steadily working through the documentation you have for each tax year to confirm that HMRC have used the appropriate values in their calculation.

payevictim

this is where i am confused, i didnt get the p11d until 15th june 2009 and the p2 was dated jan 2009, my p11d totals are over 2 jobs and 5 cars and totals £7,740:wall:

im soooo confused

Is the P2 a forecast of what they think will be the case?

payevictim

08/09 p60 figures were:
pay £44,418
tax £11,920
NI 2994.48
Tax code K285

System

payevictim wrote: »

this is where i am confused, i didnt get the p11d until 15th june 2009 and the p2 was dated jan 2009, my p11d totals are over 2 jobs and 5 cars and totals £7,740:wall:

im soooo confused

Is the P2 a forecast of what they think will be the case?

payevictim wrote: »

08/09 p60 figures were:
pay £44,418
tax £11,920
NI 2994.48
Tax code K285

The P11D you received on 15 Jun 2009 would have been for the 2008-09 tax year.
The P2 received in Jan 2009 would be for the 2009-10 tax year, so the answer to your question about the P2 is : Yes, it is a forecast based on what happened in the previous tax year.

The tax paid from the 08/09 P60 looks OK based on the tax code of K285, so the only question is if that was the appropriate tax code for your circumstances ?

It will help us to see the full picture if you pull all the paperwork together for tax years 07/08, 08/09 and 09/10 then post all the figures in one go.