I am PAYE with a tax shortfall of 16K

System

chrismac1 wrote: »

Of course I have grasped what the esc A19 rules are. They stink. They are already loaded in HMRC's favour, and I say that as someone with a 90% plus record of winning Esc A19 cases and compensation arising.

But they have been shelling out a lot in such cases. Any decent tax service would sort out the root cause which is their own silly procedures and way of operating them. But no, not HMRC. Instead they attempt to move the goalposts still further in favour of themselves.

All I ask of them is consistency. If end of year payroll submissions are not information that is fine and dandy with me. I can go on holiday in May instead of sorting them all out for the country. Employers up and down the country can save a bundle by not having to submit them and having nothing to do with RTI.

Productivity would increase and so would GDP, this could be a recession buster!

It's not that a P14 isn't information. Of course it is. It's an integral part of the employers return and,as I understand it * it's primary function is to help HMRC check the employer is operating PAYE correctly eg deducting the right tax based on the code in operation.

But thats not what ESC A19 asks. It specifically refers to information that affects the taxpayers code.

chrismac1

Here's what it should say:

1. HMRC has 12 months to process information it receives from taxpayers, businesses and all other sources - whether electronically or by post.

2. Within that 12 months, if there is a potential or actual tax liability arising from that information, HMRC must raise an assessment or other notification on the taxpayer.

3. Unless any specific new information comes to light subsequently - at which point the 12 month deadline starts again - all assessments and tax calculations raised by HMRC based on that information are notional, payment of any tax arising is purely voluntary with no legal force.

System

chrismac1 wrote: »

Here's what it should say:

1. HMRC has 12 months to process information it receives from taxpayers, businesses and all other sources - whether electronically or by post.



2. Within that 12 months, if there is a potential or actual tax liability arising from that information, HMRC must raise an assessment or other notification on the taxpayer.

3. Unless any specific new information comes to light subsequently - at which point the 12 month deadline starts again - all assessments and tax calculations raised by HMRC based on that information are notional, payment of any tax arising is purely voluntary with no legal force.

What it should say is neither here nor there. What it says is what it says. It's easy enough to play if I ruled the world.

chrismac1

What it should say is especailly relevant right now as HMRC are "consulting" over proposed wording changes. Many contributors, myself included, have gone on record to state that the definition of "information" must include payroll submissions by employers to HMRC.

Of course like most HMRC consultations this is probably a total sham consultation. But that does not stop us from asking HMRC to at least try to behave like a professional tax service, not a bunch of two-bit spivs on a street corner.

System

chrismac1 wrote: »

What it should say is....

But it doesn't

elmerfudd_2

What i find annoying about these posts are the claims of total ignorance.

The guy was on 70 grand and suddenly started paying 20% tax on everything when he wasn't before.. come on..

Gordon_hutton

elmerfudd wrote: »

What i find annoying about these posts are the claims of total ignorance.

The guy was on 70 grand and suddenly started paying 20% tax on everything when he wasn't before.. come on..

There is a huge difference between 20% and 40% I agree.

What I find annoying about people like you elmerfudd is that you don't think I am still reading these messages. My name is Gordon.

I was not paying 20% and it is not as simple as you may be.

I get a salary, I get expenses, I get bonuses and I get benefits such as car, health, stock plan and dividend directly from company and a few other things too. None of it is as grand as it may sound.

Maybe you are a genius and I am an idiot but you are missing the point here. It is one of liability and expectation. Now even though I appreciate all comments on here yours is nothing but an attempt to belittle someone who obviously knows less than you.

Well done you.....you are amazing.

Gordon (AKA the OP)

chrismac1

I totally agree with Gordon. To let this situation build up for four years and £16k is something only a 2 marks out of 10 tax system permits. Currently Esc A19 is under review, HMRC is doing its best to make it even harder for guys like Gordon to get an equitable resolution.

With the boot on the other foot, tax advisors like me get 31 days to respond to penalty notices from HMRC. That's more like 25 days from receipt of the letter.

So the suggested changes myself and others have sent to HMRC in this "Esc A19 consultation" are entirely reasonable. We're not asking them to sort out the tax affairs of people like Gordon within 31 days but 365 days.

catwoman73

Gordon

It sounds like you have quite complicated affairs (bonuses, company car, share options?), but you are an employee of a company, rather than being self employed or a contractor. Also, are you from the US, so might not be familiar with the way things work in the UK? The PAYE system works quite well if you are a basic rate tax payer that has one job that they don't move from but add anythign else into the mix and it can fall over quite quickly.

Do you have your P60s for the years that are in dispute? These are the forms that are issued at the end of the year to show how much you have earnt and how much tax and NI has been paid. If you have benefits such as a company car, you should also be received P11Ds forms which show the tax due on this. You will pay extra tax on the company car but you can offset anything you pay towards it against this. Your personal allowance will reduce so you will pay tax on more of your income. The personal allowance changes every year so its only 2012/2013 that the basic tax code is 810L. Your number will be lower than this because of the car. Any payments you have received for legitimate expenses (travel, accomodation etc) will not be subject to tax because these are just reimbursements of business expenses. It is possible that you should have also been completing a tax return because you should be a higher rate tax payer and also to correctly account for all the bonuses, car, share options etc. You should also be paying extra tax on any savings income you may have.

The tax office has changed its computering system over the past few years so lots of things have been recalculated and errors such as yours have shown up. I would suggest that you go back to the last year that you are confident that you paid the correct amount of tax (this sounds like it could be 2006/7) and use a website like http://www.listentotaxman.com/ to calculate the amount of tax that you should have been paying and compare it with the amount of tax you have paid for each year since then, so that you can understand how the shortfall has built up.

It is not unknown for HMRC to make mistakes, but unfortunately, if you have been paying 20% tax on income that you should have been paying 40% tax on, I can see how an underpayment of several 000s can build up so quickly

jem16

Gordon_hutton wrote: »

I was not paying 20% and it is not as simple as you may be.

On a BR code that's exactly what you were paying.

On a BR tax code, nothing is taken into account - no personal allowances, no taxable benefits. It is simply 20% on the whole salary.

Maybe you are a genius and I am an idiot but you are missing the point here. It is one of liability and expectation.

What tax code were you on and what salary before you changed jobs?