HM Rev & Customs - Income Tax

Silverfox1954

Apologies to all if I'm using this forum incorrectly, total amateur on forums.

Could do with some advice, if anyone could assist.

HM Rev and Customs, :mad: PAYE Section, issued me with an incorrect Tax Code on the first of March this year. This code was then used to calculate my income tax for March. On the sixth of April I left the company I was working for and am presently not working, neither I am registered as unemployed. HM R&C are now asking me to pay ‘Unpaid Tax’ due, in view of the incorrect tax code used.

1. As this is their mistake do I have to pay it?
2. In view of my situation if I do have to pay it can I offer to pay it by monthly instalments?

All advice gratefully received. (Once I've figured out how to read the replies, if any!)

Silverfox :A

ceeforcat

How are they asking for it - have you received a bill? Can you provide any further details?

spadoosh

1. Whoevers fault money owed is money owed and as such you do have to pay it
2. they will ask for it in a lump some. you can then reply with unable to afford am prepared to pay £xx amount and it will be a case of coming to an agreement.

How much have you earned this tax year? and what tax code were you put on? obviously personal but would be helpful. its more than likely due from previous years though.

ceeforcat

That is what I was thinking spadoosh - can't believe 2010/11 being assessed already!

System

Silverfox1954 wrote: »

.
HM Rev and Customs, :mad: PAYE Section, issued me with an incorrect Tax Code on the first of March this year.Silverfox :A

if the code is incorrect then obviously the calculation for 10/11 is incorrect so you have to appeal the underpayment listing your grounds for believing the code was wrong.

dtsazza

Silverfox1954 wrote: »

1. As this is their mistake do I have to pay it?

You do have to pay it.

And it's not strictly HMRC's fault. Technically every individual is responsible for ensuring that they pay the correct tax. PAYE is only meant to be an approximation (so that you don't have to find multiple thousand pounds every April); because it's exactly right in simple situations people often think it's not their responsibility to check that the figures on their P45s are correct.

In reality, HMRC do give some leeway in situations where they've clearly made multiple unusual mistakes, even though they're not required to. But simply having the wrong tax code is not going to be one of those situations. (Often this isn't even HMRC's fault, as they derive this from information sent to them by employers - if that's wrong/missing, your tax code will likely be wrong too. And once again, it's the employee's responsibility to check their tax code is correct.)

2. In view of my situation if I do have to pay it can I offer to pay it by monthly instalments?

It sounds like this should be possible. If you ask them to, HMRC may reclaim the money by adjusting your tax code.

I can't say what the criteria are for this, but my employer didn't collect student loan repayments off me last year and HMRC reclaimed the amount (low four figure sum) by adjusting this year's tax code.

Newly_retired

Different topic, but I am wondering why you have not registered as unemployed. You will get your NI contributions credited, even if you are not eligible for any money- or you may be better off by around £65pw

Silverfox1954

Hi Ceeforcat,

They have not sent a bill as such. Sent an illustration of how the unpaid amount has been arrived at and requested paymnet.

Thanks for Assistance.

Silverfox

Silverfox1954

spadoosh wrote: »

1. Whoevers fault money owed is money owed and as such you do have to pay it
2. they will ask for it in a lump some. you can then reply with unable to afford am prepared to pay £xx amount and it will be a case of coming to an agreement.

How much have you earned this tax year? and what tax code were you put on? obviously personal but would be helpful. its more than likely due from previous years though.

Hi Spadoosh,

Not earnt a penny this tax year. As the job market and economy or so dire I'm taking opportunity to do certain work on the house, which is why I have not registered as unemployed.

The amount is from March this year, tax year 2010 - 11.

Thanks for assistance.

Silverfox.

Silverfox1954

Pam17 wrote: »

if the code is incorrect then obviously the calculation for 10/11 is incorrect so you have to appeal the underpayment listing your grounds for believing the code was wrong.

Hi Pam17,

They have admitted in letter form that the mistake was theirs. The Benefit in Kind for the use of the Company Vehicle, Mercedes-Benz Vito Sport Dualiner (Commercial Vehicle), is £3000. For some reason, when we had to start paying for Private Mileage Fuel and therefore adjustment of Tax Code needed, they put the Vehicle Benefit at £1000, not £3000. Therefore the Tax Code was incorrect to the tune of 200.

Thanks for your assistance.

Silverfox.

Silverfox1954

dtsazza wrote: »

You do have to pay it.

And it's not strictly HMRC's fault. Technically every individual is responsible for ensuring that they pay the correct tax. PAYE is only meant to be an approximation (so that you don't have to find multiple thousand pounds every April); because it's exactly right in simple situations people often think it's not their responsibility to check that the figures on their P45s are correct.

In reality, HMRC do give some leeway in situations where they've clearly made multiple unusual mistakes, even though they're not required to. But simply having the wrong tax code is not going to be one of those situations. (Often this isn't even HMRC's fault, as they derive this from information sent to them by employers - if that's wrong/missing, your tax code will likely be wrong too. And once again, it's the employee's responsibility to check their tax code is correct.)

It sounds like this should be possible. If you ask them to, HMRC may reclaim the money by adjusting your tax code.

I can't say what the criteria are for this, but my employer didn't collect student loan repayments off me last year and HMRC reclaimed the amount (low four figure sum) by adjusting this year's tax code.

Hi dtsazza,

They have admitted the error is theirs in letter form and also made comment that they are unaware of how the error occurred because the correct Benefit in Kind amount, £3000, not £1000, was stated on the P60 that they received from my now Ex-Employer.

Thanks for your assistance.

Silverfox