Tax underpayment demand £3500

jem16

geoffken wrote: »

Thanks for this but have been paid by same company/pension since 1974 /2009 so self employment does not come into it.

No it doesn't but your state pension does come into it and that was the change in 2009.

As pension exceeds tax allowances as married then surely HMRC should be deducting tax at source anyway.

Not sure which pension you are referring to here. However the state pension is always paid gross and the only way of collecting tax if due is via a tax code change to your occupational/private pension.

Not sure what being married has to do with your tax though.

jennifernil

geoffken wrote: »

Jenifernil.
Thanks for this but have been paid by same company/pension since 1974 /2009 so self employment does not come into it.
As pension exceeds tax allowances as married then surely HMRC should be deducting tax at source anyway.

Thanks for your input.

Self employment?? Where is that mentioned?

And being married has no bearing on the subject as far as I can see.

As Jem said, your state pension is taxable, though paid gross. So you need a tax code for your other income that allows for this.....just like most pensioners with other income have.

My husband pays 20% tax on all his other income (Code BR) as his (untaxed) state pension uses up all his personal allowance.

If your state pension IS more than your personal allowance, you should actually have a "K" code on your occupational pension, is there a "K" after your 246?

HMRC would not know you had claimed your pension straight away, it is your responsibility to check they know about all your sources of income.

As a pensioner with several sources of income, I am surprised you are not in Self Assessment.

jennifernil

chrismac1 wrote: »

Geoff, I have several clients in their 60s and 80s in the same boat. Plenty of people in this country have had a lifetime within PAYE where over a 20 to 50 year period there were no problems, no dirty great tax demands.

What has changed all of a sudden in the last 5 years or so? Not the nature of the taxpayers. Not the nature of the tax system in any fundamental sense.

Just Hideous Muddles from Right Charlies.

It's just not good enough to say "the taxpayer has to be in complete command of their own affairs." Maybe if there was a culture of that in the UK then fair enough. But I have clients in their 20s who have even less of a clue about how the tax system works, so it's not as if anyone in Government can even claim they are making a start in the re-education process. And to expect it of folk over 60 is really taking the Mickey in my view.

Why can people not make the effort to find out how our tax system works? Why always expect someone else to do everything? What happened to taking responsibility for one's own finances?

Anyone who comes on here has, for a start, the ability to use the internet to find out about tax allowances, tax bands, code numbers etc, etc, it really is not that difficult. The HMRC website actually has a lot of good and useful info on it, put in pretty easy to read language.

And as an "over 60", I do find your comments quite patronising!

geoffken

Morning All.
Update
Have received letter refusing appeal ESCA19 for 2010/11 despite the reason for underpaid tax being HMRC not taxing pension.
Can anybody advise whether involving MP at this stage is a good idea or do you have to go through all stages of HMRC before this.
It appears from website that HMRC do not want MP's involved until all appeal/tribunal desisions have been exhausted.

jem16

geoffken wrote: »

Have received letter refusing appeal ESCA19 for 2010/11 despite the reason for underpaid tax being HMRC not taxing pension.

You have never answered this question as yet.

Did you receive and complete form P161 from HMRC?

geoffken

First question is what is HMRC P161?
I guess that is form advising HMRC of pension date.
Answer No ever and I retired 2 Oct 2009.
HMRC have known since 2 Oct 1944 (or when my birth registered for NI number) that I would be retiring on 2 Oct 2009 unless I deferred retirement which I did not.
Surely one arm of government talks to another especially now that quill pens have been replaced with computers.
All casual agency work was always taxed as BR and not advised of any arrears until 24 August 2011.

jem16

geoffken wrote: »

First question is what is HMRC P161?
I guess that is form advising HMRC of pension date.

It is a Tax Coding form which HMRC would normally send this form as you are nearing state pension age so that they can calculate the correct tax code.

http://www.hmrc.gov.uk/pensioners/approaching-why.htm

Form P161

http://www.hmrc.gov.uk/forms/p161-man.pdf

if you didn't receive one, have you asked HMRC why not?

HMRC have known since 2 Oct 1944 (or when my birth registered for NI number) that I would be retiring on 2 Oct 2009 unless I deferred retirement which I did not.

They would not know if you chose to defer the state pension, hence why they send form P161.

Surely one arm of government talks to another especially now that quill pens have been replaced with computers.

They do which is presumably why HMRC said they sent you a new tax code in May 2010.

All casual agency work was always taxed as BR and not advised of any arrears until 24 August 2011.

Seems fine.

However the problem is the state pension not any other income.

Can I ask why you didn't think your tax position may change when you received your state pension and why you didn't think you should inform HMRC?

geoffken

Update.
Fiollowing intervention by my MP Catheerine McKinnel ,HMRC have now agreed "having looked at the case again in the circumstances,we can give up the tax relief in question under Esc A19"
I wonder why they could/would not have done this under my two previous appeals.
Never mind a good job done by my MP

LurkerTurnedPoster

geoffken wrote: »

Update.
Fiollowing intervention by my MP Catheerine McKinnel ,HMRC have now agreed "having looked at the case again in the circumstances,we can give up the tax relief in question under Esc A19"
I wonder why they could/would not have done this under my two previous appeals.
Never mind a good job done by my MP

Congratulations Geoff K. And thank you for coming back and telling people how it worked out.

chrismac1

Well done. In my view - and this case is another example - HMRC these days is more about how big your boots are than the tax rules and procedures.

Strap on a pair of sized 12 hobnailed boots and all of a sudden they cave in. In practice, as an accountant a significant part of my dealings with HMRC involves working out which boots are most likely to cause the most potential pain - and therefore result in a fast professional response from HMRC - in a given situation.