Help with Tax - HMRC no use whatsoever

jrd

Hi all,

Wondering if anyone can help with understanding what the heck HMRC are doing with my tax code, and how they've calculated I owe them £4,689.03.

For the TY 2010-11 my P800D shows:

Income Tax Paid
PAYE £56,094 £14,911
Emp. Ln. £5,599 £0
Car Ben £4,095 £0
Int £62 £12

Total £65,850 £14,923.58

Chargeable Tax is £16,270

Total Adjustments is £3,342.61

Tax underpaid is therefore £4,689.03, which is what they say I owe in tax.

But where does this come from?

Tax Codes:
2009-10 - 133L until 31 August, then M1 87L

2010-11 - 84L until 30 December, then K355 until 5 April

2011-12 - K589 until 17 Auhust, then K569

2012-13 - K161

P11D:

2008-9

Car Ben - £3,750
Loans - £5,500

2009-10

Car Ben - £3,900
Loans - £6,727

*Original P11d had £13,471 loans, which was incorrect therefore re-issued

2010-11

Car Ben - £4,095
Loans - £5,599

Spent an hour on the phone today, and all the obnoxious guy on the other end would say was:

You owe us £4600.
We haven't collected any of the underpayment in this, or previous tax years.
I can't tell you how it's calculated.
You need to write in.

Firstly I need to try and get my head around how all the different numbers link together. If anyone could offer any assistance as to whether this looks like it's in the right kind of ballpark, or if it looks completely wrong I'd be grateful

Cheers.

JRD

Mikeyorks

For the gross income of £65,850 the tax due is £16,270. As the tax paid is £14,924 then that gives rise to an underpayment of £1,346.

I would guess that underpayment arises from the change of Code late in the year (84L to K355). That's a reduction of £4390 in personal allowances and designed to collect an extra £1756 in tax (at your marginal rate of 40%). But I suspect it happened too late to collect other than an extra couple of hundred per month?

But the biggest contribution to the underpayment is this :

Total Adjustments is £3,342.61

- which is an underpayment from earlier year(s). This would be shown either on an accompanying P800 ........ or one of the P2 (Coding Notice) for 10-11?

All the underpayments will likely flow from the car / loan figures via P11D. As they're always running a year in arrears.

jrd

Thanks Mike.

I've checked back through my P11Ds and P2s, and the numbers seem to add up - a year apart as you say.

And thats what I can't get my head around - if the P2 reflects the P11D, and there is an underpayment adjustment as well within my tax code, where can the claimed underpayment have come from?

I'm utterly mystified, particularly as the 2012-13 tax year doesn't have an underpayment incorporated.....the gadgie at HMRC also stated I haven't paid off any of the £4700 during this or previous tax years.....

Baffled and frustrated doesn't come into it.

jrd

p800s

2008/9 - £1,240.16
2009/10 - £1,240.16 (yep, exactly the same amount)
2010/11 - £4,689 (including previous adjustments of £3342.61) so assuming £1,357

I could be being incredibly dense; just doesn't seem to add up? Could the incorrect P11d have something to do with it?

chrismac1

If a supplier was to invoice your company today for 2,480 for "Adjustments 2008 and Adjustments 2009" would the supplier in an extremely high-handed and unhelpful manner expect your company just to cough up?

No, thought not. How long would such a supplier keep on your supplier list? 5 seconds maybe?

Absolutely do not pay across this stuff until HMRC have explained to your satisfaction exactly how this muck-up has arisen, and why it's taken them nearly 2 years to get off their fat arsses to do anything about it.

I agree their figures for 10-11, that is a different matter though could easily have been dealt with much more efficiently. They slap £400 fines on at the drop of a hat for incomplete or late end of year filing, including P11ds - they had all of this by 5 July 2011. How hard can it be?

Whether you can get them to write off the tax from the earlier years - assuming it's not just made up numbers, which happens with a depresssing frequency - I am not sure. Look up threads on this site, especially ones featuring either myself or Pennywise. For 2,480 it's worth a few letters. But first you need to know for sure if their figures are correct.

Mikeyorks

jrd wrote:

I could be being incredibly dense; just doesn't seem to add up? Could the incorrect P11d have something to do with it?

If those P800s all arrived together? Then the underpayment for 08/09 is incorporated in 09/10 (there will be an 'adjustment' figure). And the 09/10 is incorporated in 10-11.

The sharp increase of £3460 between the last 2 years I can't explain - and it could well have a relationship to the incorrect P11D.

In this case I would write HMRC asking for a detailed breakdown .... before you have one!

P11Ds are usually created by the employer after the end of the tax year. So there is always a rolling notional underpayment. But I've been suspecting for a little while that the issue of P800s (since the new PAYE system came in 3 years ago) is giving the impression that these notional underpayments are real ones. Despite the fact they're usually coded into the following year - as has always been the case. But a few hours looking at the HMRc website hasn't revealed anything.

jrd

Thanks both.

I'll be writing to the charlatans asking for a detailed explanation, including dates when P11d information was received and processed.

I'm absolutely convinced there is a monumental !!!!-up.

JRD

jrd

A quick update.

After calling HMRC I'm still none the wiser as to how much I supposedly owe.

I've subsequently received a further P800 dated February 1st for 2010-11 with reduced numbers, despite me not providing any additonal information to them.

No-one at HMRC can tell me how its calculated, whether I have paid any of the supposed debt off in this or previous tax years, or what difference it will make to my tax code this year.

Letter sent on Monday.....not holding my breath for any kind of reply within the next month or so.

If David Cameron is reading.....Davey boy, you could save billions per year by simplifying the tax system, keeping records up to date and ensuring HMRC employees have access to information and are trained on how to use it.

Rant over!

chrismac1

JRD, I am in contact with HMRC several times a week. With the right management will and the sort of "Kaizen" - type process improvement plan which was par for the course twenty years ago, never mind the improvements since then, you could:

1. Reduce HMRC numbers, including outsourced roles, by 25% within a year.
2. Reduce the backlog by 25% within the same year.

Your tax, beleive it or not, is easy peasy compared to many of my clients. It should be sorted out in one visit without any troubles. All over the UK people with easy peasy tax are in the same boat.

It can be done. I also deal with the Revenue of Ireland, they are light years better. How on Earth can that be?

The guys at the top of this mess should be hanging their heads in shame, not retiring with gongs.

jennifernil

When my OH was still working he had some benefits and therefore P11Ds. I always found it easier to file a return each year (as his benefits did vary), and tick the boxes saying "send me the money back if I am overpaid" and "send me a bill if I am underpaid". Much easier to keep track of than having things done via your code, even if it means paying up a little earlier!

I suggest you set aside an hour, gather up all your paperwork for all the years in question and look up on the HMRC site the allowances and tax bands for each year. Then get paper and pencil, fire up your calculator, and work out your total income, the tax actually due, and the tax actually paid for each year individually.

That way you will know what your situation really is, and once you get the HMRC calcs you will be able to see if/where they have made an error.

Mikeyorks

chrismac1 wrote: »

Your tax, beleive it or not, is easy peasy compared to many of my clients.

Curious, as ever, therefore that your sole contribution on these PAYE threads is your usual generalised bile. No detail - no practical help - just the usual anti-HMRC diatribe. I wonder why?