Tax Code Employer Error

nutty_nat

Please can you help any advice would be greatly received!!!!!!!!

The company that I have a part-time job with had notification from IR in Jan 2010 that my code should be DO but they left it at BR and didn't change it until April 2011. I even called the company and asked them to change it but they told me they could not change the code. But the IR are telling me a new code was sent to them.

The IR have told me to put a letter back in writing to them and say there was an employer error with my coding, I am not sure the best way to go about this, the company has now been taken over by a new company but we still have the same terms and conditions.

I am now £3500 pounds in debt to the IR through no fault of my own.

CLAPTON

from what you say you were aware that your tax code was incorrect; presumably you saved sufficient money so you could pay the tax when required.

nutty_nat

CLAPTON wrote: »

from what you say you were aware that your tax code was incorrect; presumably you saved sufficient money so you could pay the tax when required.

Thank you for your reply yes we did save the money but we are looking for advice what is the best way to deal with this.

CLAPTON

in the uk tax system it is the responsibility of the tax payer to pay the correct tax

when you first joined the company you should have contacted HMRC explaining that you needed to have a D0 code

when this wasn't applied to your pay, you should have phone HMRC again

when that wasn't applied you should have phoned them again

by april when it hadn't been applied you should have contacted HMRC again to arrange payment

nutty_nat

CLAPTON wrote: »

in the uk tax system it is the responsibility of the tax payer to pay the correct tax

when you first joined the company you should have contacted HMRC explaining that you needed to have a D0 code

when this wasn't applied to your pay, you should have phone HMRC again

when that wasn't applied you should have phoned them again

by april when it hadn't been applied you should have contacted HMRC again to arrange payment

We have done all of the above and wrote letters!!!!!!!!!!!!!!!!

System

nutty_nat wrote: »

Please can you help any advice would be greatly received!!!!!!!!

The company that I have a part-time job with had notification from IR in Jan 2010 that my code should be DO but they left it at BR and didn't change it until April 2011. I even called the company and asked them to change it but they told me they could not change the code. But the IR are telling me a new code was sent to them.

The IR have told me to put a letter back in writing to them and say there was an employer error with my coding, I am not sure the best way to go about this, the company has now been taken over by a new company but we still have the same terms and conditions.

I am now £3500 pounds in debt to the IR through no fault of my own.

Since the code was issued in January 2010 and not operated by the employer it was up to you to contact HMRC and ask them to reissue the code. You had 12 months to get the code reissued
You can write to HMRC and say tell them you are disputing any underpayment of tax due to Employer Error. However your payslips would have shown that the employer was operating the wrong code and it was up to you to make HMRC aware that the employer was not following their instructions and so give HMRC the opportunity to reissue the D0 code.

If your employer is saying they didn't recieve the coding notice then it might be worthwhile checking the address the codes were sent to by HMRC and confirming with the employer their payroll address. There are many instances where the address the code is sent to is different from the actual payroll office or accountants address. This can cause delays in codes being operated as employers forward such notices on to who ever runs the payroll for them via their own internal mail.

chrismac1

If you have evidence that you told HMRC about the situation during the 09-10 tax year, then I would have a go here. There have been a few defeats for HMRC in the Tribunals recently. The one most relevant to your case is Budiadi, where the taxpayer was hit with a surcharge for filing late. The Tribunal accepted that the taxpayer had a "reasonable belief" that his employer had operated the correct PAYE on a termination payment - which they had not.

The circumstances are different to yours, and Budiadi still had to pay the extra tax on the payoff, he just got the surcharge quoshed. However, HMRC thought they had this whole area of the law stitched up in their favour - and this is still reflected on their website - whereas the Tribunals are taking a more "commonsense" approach. I suspect that behind that there is a recognition that HMRC are badly messing up and often hiding behind employers when it in fact is largely HMRC to blame in many cases.

If I were you I'd be prepared to pay the tax but I would not just roll over and die just yet.

puki

chrismac1 wrote: »

The one most relevant to your case is Budiadi, where the taxpayer was hit with a surcharge for filing late.

The circumstances are different to yours, and Budiadi still had to pay the extra tax on the payoff, he just got the surcharge quoshed. .

If I were you I'd be prepared to pay the tax but I would not just roll over and die just yet.

Where does the surcharge that you have imagined come from ? The OP has said they were aware their tax code was incorrect, they have saved the money to pay for the tax. and are looking for the best way to deal with it. The answer is simply pay HMRC when the P254 payment slip arrives There is no mention of a surcharge being levied. No mention of it being a self assesment case, Not everyone is looking to avoid their reponsibilities

chrismac1

Well I got the impression the OP was trying to minimise his tax bill, hence my post - no doubt the OP will correct me if I was wrong! I specifically said that Budiadi was not directly relevant, but there again how many tax cases are exactly the same as another given case? But what I am most definitely saying is that Tribunals have been effectively saying to HMRC "If you have not put your house in order and the taxpayer has acted reasonably, tough luck HMRC." In this and the help Pam has posted there is a chance. Perhaps less than 50%, but I guess that is what Mr. Budiadi's accountant told him too!

chrismac1

Note also that although Budiadi was a self-assessment case, the heart of the matter was a PAYE mix-up where either the employer or HMRC messed up - no prizes for guessing where my money is on that one! So that is directly relevant to the OP, because just as in Budiadi HMRC is pointing the finger at the employer who is pointing the finger at HMRC etc. etc. I have a couple of these cases on my books, in both in my view the employer has acted correctly and incompetent or inexperienced HMRC staff are merely blame-shifting.

nutty_nat

chrismac1 wrote: »

Note also that although Budiadi was a self-assessment case, the heart of the matter was a PAYE mix-up where either the employer or HMRC messed up - no prizes for guessing where my money is on that one! So that is directly relevant to the OP, because just as in Budiadi HMRC is pointing the finger at the employer who is pointing the finger at HMRC etc. etc. I have a couple of these cases on my books, in both in my view the employer has acted correctly and incompetent or inexperienced HMRC staff are merely blame-shifting.

Thank you everybody for your advice, we will complain for the error, we called and wrote a lot of times to HMRC to get them to change the code but it never happened we even contacted my payroll department. We have logged everything.