Under paid tax.. ESC A19 Help.

j3n.2011

Hi, I'm hoping someone can help my mum.

She has had a tax bill for £353 for tax year 09/10.
She earned in her job £9216.70 and paid £547.20 in tax, she also has a pension from her late husband in which she received £1865.76 and paid £21.20 tax.

She's currently paying it off through a lowered tax code, what she wants to know is, could she apply for the ESC A19?

I am unsure of how it works and both confused as to why she has paid so little tax on the pension and who is to blame for this mix up. Tax is 'supposed' to be deducted before she receives it. JLT pension scheme people have been paying tax with the code supplied by HMRC, so whose to blame and is she liable to pay it?

Hope this makes sense to someone as were confused!

Thanks in advance.

jem16

j3n.2011 wrote: »

She earned in her job £9216.70 and paid £547.20 in tax,

OK that's fine. Was the tax code 647L?

she also has a pension from her late husband in which she received £1865.76 and paid £21.20 tax.

That's wrong - she should have paid £373.15, hence the underpayment of £353. Presumably her tax code was not BR as it should have been?

She's currently paying it off through a lowered tax code, what she wants to know is, could she apply for the ESC A19?

Doubtful.

I am unsure of how it works and both confused as to why she has paid so little tax on the pension and who is to blame for this mix up.

Did your mum inform the pension company or HMRC that she already had a job which was using her tax code and therefore could not get her personal allowance on the pension?

Tax is 'supposed' to be deducted before she receives it. JLT pension scheme people have been paying tax with the code supplied by HMRC, so whose to blame and is she liable to pay it?

Ultimately it is your mum's responsibility to ensure that she is being taxed correctly. She should have informed the pension company initially that she already had a job and made sure that she did not get her personal allowance twice. BR would have been the correct code for her pension whereas I imagine she was given 647L.

In the absence of anyone informing HMRC of the two incomes it is more than likely that HMRC first learned of your mum's two incomes through the P60s which would have been sent to HMRC in May/June 10. HMRC then have a year from the end of that tax year - i.e. April 11 to inform your mum which they have done so i doubt an ESC A19 would apply.

patanne

what tax code did the pension have for her. It can't have been 647L as she has paid tax. Was it something like 176L? It may actually have been her employer that has used the wrong code if it has been split to say 176L & 471L. I can't understand why the pension has any code at all if it wasn't 647 (which it couldn't have been) or BR which it also couldn't have been

jem16

patanne wrote: »

what tax code did the pension have for her. It can't have been 647L as she has paid tax.

It's possible to have been 647L/M1 if the pension did not start until late in the tax year 09/10.

I can see where you are coming from though and more details are really needed.

1. What tax code was used on the job?
2. When did the pension start?
3. What was the monthly amount of the pension?
4. What tax code was used for the pension?

j3n.2011

jem16 wrote: »

OK that's fine. Was the tax code 647L?

Yeah thats correct.

That's wrong - she should have paid £373.15, hence the underpayment of £353. Presumably her tax code was not BR as it should have been?

Also right, they were using tax code 175L

Did your mum inform the pension company or HMRC that she already had a job which was using her tax code and therefore could not get her personal allowance on the pension?

She already had the job before receiving the pension. Shouldn't the HMRC of know this and provided the pension company with the correct tax code?

Ultimately it is your mum's responsibility to ensure that she is being taxed correctly. She should have informed the pension company initially that she already had a job and made sure that she did not get her personal allowance twice. BR would have been the correct code for her pension whereas I imagine she was given 647L.

647L was the tax code given for her job, not her pension.

In the absence of anyone informing HMRC of the two incomes it is more than likely that HMRC first learned of your mum's two incomes through the P60s which would have been sent to HMRC in May/June 10. HMRC then have a year from the end of that tax year - i.e. April 11 to inform your mum which they have done so i doubt an ESC A19 would apply.

She's been in the same job since 2003 and started receiving her pension in 2004.

Sorry if that makes no odds, still confused!

Thank you again

j3n.2011

jem16 wrote: »

It's possible to have been 647L/M1 if the pension did not start until late in the tax year 09/10.

I can see where you are coming from though and more details are really needed.

1. What tax code was used on the job?
2. When did the pension start?
3. What was the monthly amount of the pension?
4. What tax code was used for the pension?

1. 647L
2. Around February 2004
3. At the time of 09/10 it was £158.56 (Total) £156.16 (Net received)
4. 175L

jem16

j3n.2011 wrote: »

Also right, they were using tax code 175L

OK if they have given her that tax code on her pension, they must have split the tax codes so that 175L was for the pension and 472L should have been for the job. So why was 647L still being used in her job?

She already had the job before receiving the pension. Shouldn't the HMRC of know this and provided the pension company with the correct tax code?

They wouldn't have just known. However if she has been receiving the pension since 2004 and working since 2003 in the same job they would have known about both income sources.

Did she start to receive a state pension?

j3n.2011

jem16 wrote: »

OK if they have given her that tax code on her pension, they must have split the tax codes so that 175L was for the pension and 472L should have been for the job. So why was 647L still being used in her job?

No idea why 647L was still being used in the job.. ?

They wouldn't have just known. However if she has been receiving the pension since 2004 and working since 2003 in the same job they would have known about both income sources.

Did she start to receive a state pension?

No, she isn't old enough for a state pension.

jem16

j3n.2011 wrote: »

No idea why 647L was still being used in the job.. ?

She should have received P2 coding notices which explain what tax codes have been allocated to each source of income. You need to find them first.

In the absence of the P2 notices I would suggest your mum phones HMRC and find out what tax codes were allocated to her. If they say it should have been 472L for his job then you need to find out why the employer did not use that code.

There is no way that a 175L tax code would have been issued without the other tax code being amended so either HMRC or your mum's employer is at fault here. Although in saying that it is also your mum's responsibility to check that the correct tax codes are being used.

This thread seems to also apply to your mum.

https://forums.moneysavingexpert.com/discussion/3107270

antrobus

j3n.2011 wrote: »

She's currently paying it off through a lowered tax code, what she wants to know is, could she apply for the ESC A19?

I think the answer to this question might well be 'No'.

My understanding is that ESC A19 applies where HMRC is given some information and then fails to act on it within 12 months after the end of the tax year in which the information was received. Or to put it another way, if HMRC bogs up someone's tax codes for 2009/10 it has until the 5th April 2011 to correct its own mistakes. Presuming here that mum's 'lowered tax code' was issued prior to that date?

Someone will no doubt correct me if I'm wrong.

j3n.2011

Ok, that ACTUALLY makes sense, thank god for someone who knows what they are talking about.

Thank you so much for that!