Tax Underpayment

AntonyScott

Hello I would be very grateful for any help with the following:


Received a P800 in January 2012 – underpayment from 2008 -2009 and 2009 -2010



Total £9840


This relates to a P11D tax benefit for accommodation.
At the time I was not fully aware of the tax implications as they seemed complex. I wrote to the HMRC in 2006 informing them of the benefit and asked if I needed to fill in a self assessment. I never received a reply. I called the following year and explained my situation I believe I was told that my employer would send the P11D to the HMRC who would calculate what tax, if any, was payable.


My code was eventually changed in 2010 -2011 but as two whole tax years have passed can I raise an ESC A19 claim.


Also checking my records show P11D`s were sent to HMRC for 2006 -2007 and 2007-2008


Why are these years missing as I’m guessing there would have been underpayments here too?



Question is 2006 - 2007 - 2007 - 2008 employer would have sent P11D to HMRC.


HMRC failed to use information received about a source of income, within 12 months.


Should I ask HMRC why they are not claiming underpayments for these tax years?


I would really like to know where I stand with this.


Thanks in advance.

Justin

chrismac1

I think you have a pretty strong case. However, this is one of the biggest amounts involved so get ready for a hard battle involving a lot of letters.

First on the basis of the post, you've got written evidence that you informed HMRC about the potential benefit. As you rightly say, rules are complex in this area so you can argue that informing HMRC there was a potential BIK amounts at taking all reasonable steps to get your tax position right.

The P11d for 08-09 was due by 5 July 09, and for 09-10 by 5 July 10. Under the time limts for Esc A19 the latter year is a problem, HMRC are within their time limits - admittedly outrageously generous ones - for raising the assessment.

What has gone wrong here?

1. Did your employer fail to submit the P11d? (seems unlikely).
2. Did they submit it missing off the BIK (also unlikley if it was on for earlier years).

3. HMRC totally messed up - this is the short-priced favourite based on the large majority of such posts on this and other sites.

So in my view HMRC should cough up for 08-09 but not for 09-10, as they must use the information within 12 months of the end of tax year of receipt which would have been the 10-11 tax year if P11d received on 5 July 10. So 12 month rule takes us right up to 5 April 2012.