HMRC Underpayment demands - but unable to show calculation

brandy321

Hi all

I've recently been informed that I owe £700 to HMRC in underpayments. For £422.42 of this amount (I don't dispute the rest) they cannot show me a breakdown of the calculation.

After four phone calls and numerous updates and corrections to the "tax calculations" they sent out i'm still clueless. The only explanation I have is that its a "carried forward amount to the tax year 2005-06" and "they no longer hold copies of the calculations" prior to this.

Given that at one point they were saying I'd paid 1k in tax when I'd actually paid 11k (they apologised when I corrected), I feel pretty reluctant to accept this figure without knowing where it came from.

I've been working for the same company for 11 years so can't understand why it took them so long to inform me.

Where do I stand on this? What would the community advise me to do?

Mikeyorks

How have they notified the £700 if they can't show a calculation? If it's all on P800(s) - that's an informal assessment and (should) shows the figures.

If you want help - you'll need to give more of the detail. Figures from the P800s and the P60 (pay / tax / Code) equivalents + years?

chrismac1

My guess is this item will be in the "Adjustments" line, a.k.a the "our systems are so rubbish we can't tell you what this is" line.

brandy321

That's right Chris - the £422 is listed in "plus other adjustments" with no explanation. The other £278 remainder I have no problem with - it's for car and medical benefits - they do have a breakdown of it and it (now) aligns fully with my P11D's/60's.

I've asked my company to dig out everything they've got so I can try and see things from my end. I suppose my question is if they can't prove the debt, can they still make me pay it?

chrismac1

It depends. I challenged them on exactly this for a client and - surprise, surprise - they pretty much admitted they could not back it up and wiped it off the account. Let me put this another way. If your electricity or phone company out of the blue sent you an invoice for £422 headed up "adjustments from 2006" would you write out a cheque? Or would you write back demanding to know what the hell they were playing at?

Mikeyorks

brandy321 wrote: »

That's right Chris - the £422 is listed in "plus other adjustments" with no explanation.

How many P800s did you get?

brandy321

...just the one but they revised it twice after I checked my records and read out my contradictory figures. Thanks guys - i'll write them a letter and see what happens.

Mikeyorks

Unusual. All the P800s I have seen - the 'adjustment' is the net debit or credit carried forward from the previous P800. As thus :

HMRC wrote:

If you receive more than one P800 Tax Calculation the amount of tax you have overpaid or underpaid in the earlier tax year is carried forward to the later tax year. This means you get a final figure of tax overpaid or underpaid for the two years. The amount carried forward from the earlier year is shown on your P800 Tax Calculation for the later year in the 'adjustments' box under the heading 'less other adjustments'.

System

Any calculations for those earlier years should have been issued from the old COP system or self-assessment depending on which system you were under at that time. If they were done under the old COP system then the details are no longer available, only the total owed carried forward. That's what happened when COP transferred over to NPS.
I would have expected them to have included it in your tax code at the time and if you still have them I would check your coding notices to see if that sheds any light on the matter.

chrismac1

In my view you either keep the data and have a go at billing it, or you bin the data to save IT costs - perfectly valid thing to do - and write it off. What you must not do is bin the data and then try billing it, even 4 months later never mind 4 years later. This one post sums up neatly exactly why my strapline is fair and reasonable.