Tax Underpayments...(apparently!!)

mars2le2

Hi all, im after abit of advice regarding a tax underpayment issue.

I work for a large company that provides medical insurance as a taxable benefit. The tax amount depends on the amount of dependants on the policy etc.

I have received a letter from the inland revenue stating that I have made an underpayment in tax.

After speaking to the tax office and my employer it seems that the P11D's were sent to the tax office well before the cut off date and the tax office haven't processed the P11D's and amended tax codes accordingly for the last 2 YEARS!!!

Where do we stand with this? IMO all the information that the inland revenue request was provided and done so on time yet it was their failure to process and amend tax codes that has resulted in underpayment by me.

I am aware that I need to pay for the benefit and am happy to do so but now my tax code has been adjusted so I will pay for 3 years in 1 year to clear up their lack of administration.

I have also heard on the grapevine that employees within the tax office are being paid commission on the amount of outstanding tax they identify and claw back.

Up till now I know of people being stung with this for medical insurance and also a widows pension so this could be a widespread problem.

Hoddie_2

I will pay for 3 years in 1 year to clear up their lack of administration.

You could have prevented this by calling HMRC as soon as you started receiving the taxable benefit. It may not sit right but the law says it's your own responsibility to ensure you're paying the right amount of tax. Even if HMRC had acted on the information at the right time, you'd still have had an underpayment and would have been paying 2 years at once.

I have also heard on the grapevine that employees within the tax office are being paid commission on the amount of outstanding tax they identify and claw back.

Absolute rubbish. The grapevine is nearly always wrong. "Students are exempt from tax... self-employed don't pay tax on their first year earnings, etc..."