Any help on P800 tax underpayment appeal for a pensioner?

PJ_78

[FONT=&quot]Hi[/FONT]

[FONT=&quot]I’m posting on behalf of my Dad who has just been told he owes £2,300 through P800 notifications for tax years from 2008-09 to 2011-12. My Dad is 68 with combined income from his pensions (before tax) of around £12,000 so any reclaim is going to have a major impact on him. Having spent a long weekend going through his papers I think I understand how the underpayments occurred but would appreciate any advice on the best way to proceed with a ESC A19 appeal. As background:[/FONT]

• [FONT=&quot]my Dad has a pension (pension 1) he started to receive in the late 1990s after being made redundant from the firm he worked for at the time;[/FONT]
• [FONT=&quot]since then he also had a full time job until he retired, at age 65, in 2009, at which point he started to receive a pension from this employment as well (pension 2);[/FONT]
• [FONT=&quot]over 2009/10 and 2010/11 he also worked part time at the firm he had just retired from.[/FONT]

[FONT=&quot]Looking back at all of his pay slips until 2010 I have noticed his work payslips and those from pension 1 all use the same tax code. However, from 2010 onwards one pension uses his tax code and the other has a code of BR (presumably basic tax rate). I’m assuming that the payslips for pension 1 before 2010 should also have had a BR code because it looks like the full personal allowance was deducted seperatley from both his pension and on his salary before then, effectively getting a double allowance. My questions are:[/FONT]

• [FONT=&quot]as HMRC have allocated tax codes to his salary and his pension in all previous years they must have had all of the relevant information to apply the correct tax rates to each portion of his income. Would this form any grounds for an ESC A19 appeal? The error carried on for several years so there was a long period over which HMRC could have realised its mistake.[/FONT]
• [FONT=&quot]is it worth asking an IFA or tax advisor to assist in this or is the appeal process a reasonably straightforward one?[/FONT]
• [FONT=&quot]is there anything that may help with the appeal, and is there any merit in phoning HMRC to appeal or is it better to write to them from the start so there is a full record of all correspondence?[/FONT]
• [FONT=&quot]are HMRC able to go back any further than 2008/09 to reclaim underpaid tax? Clearly it looks like HMRC have been making the same mistake since the late 1990s.[/FONT]

[FONT=&quot]I’d be grateful for any advice or help anyone can give on this.[/FONT]

[FONT=&quot]Thanks[/FONT]

jimmo

The simple bit first, no HMRC can’t go back beyond 2008/09.

They could, at a stretch go back another 2 years but in a PAYE case, like your dad’s, that’s extremely unlikely.

http://www.hmrc.gov.uk/briefs/brief1610.htm

I don’t believe that ESC A19 would apply in your dad’s case because what went wrong doesn’t constitute “information received” but it seems that the majority of other posters on here have a different view. See this thread as an example.
https://forums.moneysavingexpert.com/discussion/4256907

Such is the nature of a forum.

For what it is worth, I think that people like your dad need to learn what went wrong and whose fault was it. Then consider the way forward.

You have already done most of the spadework on that and, from what you have written I would say that HMRC is probably more to blame than your dad but, from an HMRC point of view, your dad is not exactly innocent. He should have noticed the double allowance of personal allowance when he got his first pension.

One way or another, you have a fight on your hands. Keep on plugging ESC A19. I believe you would be wrong but you never know. Go on the attack and accuse HMRC of victimising an innocent and vulnerable old man.

That needs a “street fighter”, not necessarily professionally qualified.

xylophone

Did your father complete one of these when he approached his 65th birthday? http://www.hmrc.gov.uk/forms/p161-man.pdf

Did he stop paying NI after his 65th birthday?

http://www.rossmartin.co.uk/index.php/employers/essential-know-how/454-the-advisers-guide-to-the-paye-underpayment-scandal

HMRC may well have realised their error - they have gone back four years.

Did your father really not know that he was not entitled to double personal allowance?

PJ_78

Thanks for the replies. I'll give it a go and see what happens. My Dad had always assumed he was paying the correct level of tax, the double allowance comment is my summary of what happened. The key issue for me is that my Dad would never have realised anything was wrong - like a lot of people he would have been more likely to query things if different tax codes were being used.

chrismac1

Jimmy and any others who enter this thread saying that Esc A19 does not count P60s and the like as "information" are technically correct. However, if you look back on the site over numerous Esc A19 posts - see threads in which myself and Pennywise have posted - you'll see that a sizeable majoroty of these result in Wins for the taxpayers.

It is also worth noting that I had a client who received P800s totalling £3k or so back in August 2010. My advice was "interesting reading, let's prepare our defences but actually DO nothing until you get a formal assessment or other notice of intent to take extra tax off you". He is a GP who had worked for various trusts, a classic case where a frontline public service guy does nothing wrong, the back room payroll folk mess up and then to compound things HMRC mess up too.

Anyway that was August 2010, 26 months ago. Nada. Not a dickey bird. Nowt since then. All quiet on the Western Front. No tax paid and none requested. Result!

Mostly, though, they follow up with action to take the tax back. You then get your size 12 Esc A19 boots on and start asking the specific questions about the information trail that HMRC never want to answer.

Do not accept generic "get lost, we are wonderful and also make up our own rules, so go away" HMRC letters. Ask for dates when they got the information they've used to issue the P800s. Ask them why it took them 3 years or whatever to knock up a simple tax calculation.

Sometimes they just get ground down by the relentless requests from a victim to act like a competent tax service, and rather than be bothered to do that they just give up the tax. You could even try a Data Protection Act "producer" they hate those!

Even if they go all 12 rounds, when you get to the Adjudicator you'll have a record of all the times you made reasonable requests for information and they couldn't be bothered.

MJB220

Hi

I just wanted to add a couple points from my own experience of appealing through the Esc A19 process

[
[*]The tax office are very slow at processing these issues and at the very least you will have some time before they will be able to collect the amount, should it come to that.

[*]In the correspondence I have had they have offered to collect the amount over a 3 year period, so again if it comes to that your father will not have to pay all at once
[*]I found the process relatively clear and it seems you have already done the leg work so I would pursue it yourself

[*]It possibly goes without saying but the tax office are in pretty disorganised and therefore keep a copy of all your correspondence (iI would only write to them especailly as it takes so long to get through on the phone) and consider sending it recorded post

[*]Ask them lots of questions, they tend to ignore these requests and such are not meeting their obligations of their own charter - see their website for further info

As a previous poster has said keep fighting, they seem to send out rejections as a matter of course and not well reasoned/consistent ones either!

Good luck

PJ_78

[FONT=&quot]Sorry to bump this. After a few letters with HMRC they have agreed that ESC A19 does apply in this case and have waived the charges they had intended to apply. While I think we were largely just lucky, and got a sensible and pragmatic person reviewing our second appeal, I’ve set out below the process we went through in case it’s of any help to anyone else.[/FONT]

[FONT=&quot]Firstly, as had been suggested, we didn’t take any action until we received a letter requesting a cheque for the underpayment (as an aside I was really disappointed with the tone of this letter, it effectively demanded full immediate payment, didn’t mention there could be alternative repayment schedules agreed and was set out in a far more threatening manner than was needed).[/FONT]

[FONT=&quot]We then sent in an appeal letter that didn’t strictly contain any information that applies under ESC A19 but did get the ball rolling. In the letter we set out my Dad’s background to show he couldn’t have been expected to have a detailed understanding of how his tax should have been calculated and pointed out that as all incomes had always been taxed through PAYE HMRC had always had all relevant information. We asked what new information had come to light that hadn’t been used previously, when did HMRC receive it and why hadn’t they been able to use it at an earlier date as we felt it was HMRCs failures that had led to the tax underpayments.[/FONT]

[FONT=&quot]As expected, HMRC rejected this appeal and sent back a letter that, while not mentioning any of the questions we had raised, did confirm our understanding of how the underpayment had arisen.[/FONT]

[FONT=&quot]We used this letter as an opportunity to change tack slightly, focusing on the individual circumstances of this case and trying to personalise the appeal so they viewed it as applying to a person rather than an NI number. As well as restating the queries in our first letter we pointed out that the mistake had been in place for around 14 years and, by requesting information from so long ago, they were contradicting the recommendations on their own website which seem to recommend people keep records for 5 years (not sure if this is strictly true but we wanted to stress it wasn’t reasonable to expect us to still have records from so long ago). Finally, we said the original P46 sent when the pension was first set up in the 1990s would have contained all of the information the HMRC had failed to act on.[/FONT]

[FONT=&quot]Based on this second letter HMRC accepted the appeal, although as mentioned I think this may largely have been due to getting a reviewer who judged the case on its merits rather than blindly adhering to ESC A19.[/FONT]


[FONT=&quot]Hope this might help someone, but I think the main lesson is it's just worth persevering with the appeal.
[/FONT]

nomunnofun

Excellent - well done! I also wholly agree with your penultimate paragraph.

System

Congratulations and thank you for updating us on your dad's case.

I am of the opinion, but don't know it as fact, that HMRC routinely reject an appeal under ESC-A19 and issue a standard template letter response. That's why I'm of the view it does no harm to write in again when that reject letter is received.

antonic

And HMRC are planning to abolish ESC A19

http://www.thisismoney.co.uk/money/news/article-2281294/HMRC-tax-code-change-means-taxpayers-spot-mistakes.html

System

antonic wrote: »

And HMRC are planning to abolish ESC A19

http://www.thisismoney.co.uk/money/news/article-2281294/HMRC-tax-code-change-means-taxpayers-spot-mistakes.html

That's not how I understood the situation. It's not being abolished, its just that fewer cases are likely to qualify in future. As HMRC is more up to date with their reviews than ever before, in most cases there'll no longer be a delay in using info.