Underpaid PAYE Tax - Shock £2k bill!! Beware...

Mikeyorks

Danno_Collins wrote: »

What do you think the chances are of getting them to waive it?

Limited. Unless you can demonstrate the employer wrote to HMRC with details of the supplementary payment.

Whilst the letter itself does not (IMHO) constitute 'information' that interacts with ESC A19 :

http://www.hmrc.gov.uk/manuals/pommanual/PAYE95055.htm

I would nevertheless press - very hard - that it is in fact supplementary information to the P45. Which is 'information'. Therefore the letter should have been acted upon in order to head off the underpayment - by revising the data at the new employer.
But all falls if there was no letter. And if there was - you would reasonably have had a copy?

dori2o

Mikeyorks wrote: »

I was always of the impression that the letter to HMRC (in advance of the P14) where a payment is made after the P45 .... was in order HMRC could then provide corrected figures to the new employer. All a bit pointless otherwise.

In the same way, and surely for the same reason, a letter is required (same terminology) where it's discovered the P45 contains erroneous figures?

Thats not the case. Reason being that HMRC do not know what the total pay to date is at the time of receiving the letter. The individual could have gone on into further employment which pays far more than their previous job.

The individual could be a 40% taxpayer in which case, because the payment after leaving was taxed at 20%, means the underpayment is already in place, and HMRC would not update the tax code details as it would collect the underpayment in one lump sum.

They could also have claimed JSA after leaving the employment. They could have been issued with a refund via JSA when they signed off. Again it would not be possible to update the total pay to date in this instance as HMRC do not get JSA details until after the end of the tax year, and the information does not appear on the records until November following the year end.

In these cases unfortunately their is no blame to apportion.

As for Chrismac, yet again you bring up the time scale for issuing repayments, but this has absolutely nothing to do with the facts of the case. HMRC have 4 years from the end of the tax year to collect underpaid tax. Like it or not that is FACT.

AirlieBird

Mikeyorks wrote: »

Whilst the letter itself does not (IMHO) constitute 'information' that interacts with ESC A19 :

I would disagree. If the letter is received before the end of the tax year then HMRC has the opportunity to change the tax code, which, as I understand it, is the only reason why P14 data isn't classified as information for the purposes ESC A19.

dori2o

AirlieBird wrote: »

I would disagree. If the letter is received before the end of the tax year then HMRC has the opportunity to change the tax code, which, as I understand it, is the only reason why P14 data isn't classified as information for the purposes ESC A19.

See my above post. The information cannot be used for the reasons noted in my post.

chrismac1

Ultimately the HMRC definition of "information" is unique to HMRC and utterly at odds with the OED, English common law and any other credible definition of the word.

Even if this guy ends up paying the tax bill - and I see no reason why he should on what's been posted here so far - he should not do so before getting to the bottom of the information trail. I use the word information in its accepted definition the world over excluding HMRC.

1. When did they get the final piece of information which enabled them to calculate this bill they have sent you?

2. When did they first act on it?

Incidentally, I am toying with the idea of replying to a few HMRC "requests for information" stating that the "information" they require does not meet their definition of "information" as stated on the HMRC website, just for a bit of sport!

AirlieBird

dori2o wrote: »

See my above post. The information cannot be used for the reasons noted in my post.

The information can be used. HMRC has processes in place to deal in-year with overpayments and underpayments from redundancy payments irrespective of whether you are claiming JSA or get another job.

dori2o

AirlieBird wrote: »

The information can be used. HMRC has processes in place to deal in-year with overpayments and underpayments from redundancy payments irrespective of whether you are claiming JSA or get another job.

So tell me. How exactly would HMRC know what pay had been received, and what tax had been paid by the individual once it had received the letter?