Refund being delayed/refused by HMRC following redundancy

Gregg53

Hello all, this is my first post, I hope someone can help.

My situation is probably a little unusual but I would be surprised if it's unique.

I left my previous employment at the end of March this year, but wasn't paid my redundancy pay until well into April, in the new tax year. Unfortunately my employer taxed this pay (apart from the £30k tax free) against the code which was previously issued as if I was working all this year which worked out to be 44%.

I checked the rules and found that the redundancy pay counts against your tax bill in the year you receive the money, not the year you were made redundant.

I then called HMRC and was put through to a technician who told me that as this is a redundancy situation I was eligible to claim an in-year repayment for any tax overpaid.

I advised that I had received my P45 from my employer which showed my leaving date in March but only showed my redundancy pay and the tax paid on it. She said technically this was incorrect and I should get them to send my statement of pay and earnings and tax paid for this financial year 13/14 which they did which correctly showed my redundancy pay and tax paid against it. She asked me to send this along with a completed "Redundancy payment in-year repayment claim" form which she sent me. I sent these documents in as requested 8 weeks ago.

After 4 weeks had elapsed I called HMRC to follow up and was told my claim had been forwarded to a "refund specialist technician" and to call back in 3 weeks. This I did to be told the specialist had just dealt with my claim but no refund could be issued as"my P45 stated I left my employment in the last financial year and that Iam on self assessment (but probably shouldn't be!!)"

I asked the operative to check my records which he did and stated that their records only showed my redundancy pay and tax against it for the whole of the 12/13 financial year! However when I asked him to check his P14 return from my employer the penny dropped as it showed a completely different amount, my actual correct earnings and taxation for last financial year.

I asked to speak to the department dealing with the refund to explain, but apparently this isn't allowed. However you can request a call from them, which they will make within 5 working days (day 3 today and no call as yet)

The frustration for me is that the HMRC technician I spoke to 8 weeks ago knew about the P45 and that I was on SA but agreed I was due and eligible for an in-year refund.

I'm not being greedy but at my age (53) it's not easy finding another job and the fact is the tax I overpaid would help to buy a car and help me find another job elsewhere.

Sorry my first post is a bit long winded, but I would appreciate any advise as to how I could resolve this.



Many thanks- Gregg

chrismac1

COMPLAINT CASE.

You've been all round the houses already, being passed from one jobsworth to another. Time to wake them up.

TaxSaviour

Hi Gregg,

If there is no good reason why you are on Self Assessment (SA) and it is that which is making the refund impossible, couldn't you just ask them to remove you from SA?

John_Pierpoint

Gregg53 wrote: »

I asked to speak to the department dealing with the refund to explain, but apparently this isn't allowed. However you can request a call from them, which they will make within 5 working days (day 3 today and no call as yet)

Oh dear it is getting worse, when a similar situation happened to me and I ran into the "don't phone us we will phone you" rule from the triage centre; I was told the return call would be "tomorrow".

In the event I only had to sit next to the phone for 36 hours.

xylophone

It seems to me that frustrating as it is, you will need to wait the five working days.

If you have not been contacted by Wednesday of next week, set out the case in writing and send your letter (with copies of all relevant documentation) to HMRC by special delivery. Make sure that you keep a copy for your records.

Gregg53

Thanks for the replies so far.

Being on self assessment didn't seem to be an issue for claiming the refund when I spoke to the technician originally back in April so I'm not sure why it should be now. However, the last operative I spoke to did say he didn't understand why I was on SA and probably shouldn't be, so it should be easy to come off it if it's stopping progress.

The 5 working days from my call back request will be up on Tuesday morning, so if I haven't received a call by then I will issue a complaint letter setting out the details and enclosing copies of all the documents which I have which are as follows-
12/13 Financial Year Statement of earnings and tax from my previous employer
13/14 Financial Year Statement of earnings and tax from my previous employer (previously sent)
P45 (Shows my March leaving date but only indicates this (13/14) financial year's pay and tax)
April 2013 pay slip showing severance pay breakdown
HMRC OCA91 in year refund claim form (previously sent)

I presume I should send this to the office where I originally wrote to for the refund making it FAO The Complaints Manager??
Does anyone know how long they have to deal with the complaint? Doesn't seem to specify on the relevant section on their website!

The whole saga is very frustrating and disappointing. After paying tax monthly for over 30 years this is the first time I've asked for a refund and the time taken to get a reply or even a clear answer seems excessive.

I'd welcome any further advice or comments.
Thanks again- Gregg

TaxSaviour

Hi Greg, there are a couple of potential problems with your claim.

Firstly you may only be entitled to receive an in year tax refund for 2013/14 if the redundancy payment you received is taxable in 2013/14.
If the payment is deemed as being received in 2012/13 all of your income including your redundancy payment is taxable in 2012/13 and there may not be a refund due.
Problem here is that HMRC will assess the payment date on the earlier of 'the payment date' or 'the date the person becomes entitled to payment' see HMRC manual EIM42260.

This could mean your redundancy payment is taxable in 2012/13 and not 2013/14!

Secondly regarding SA, HMRC state the situations where you would have to complete a return ( goto HMRC site, type need tax return in search menu and click registering for Self Assessment) if none of these rules apply ask them to remove you.

If all else fails maybe you could be entitled to make certain claims against your income. Uniform allowance (see martins page) for example, there are many other claims you can make, especially as a higher rate taxpayer!

Obviously I don't have full details and this is just general advice. Good luck tomorrow.

John_Pierpoint

A recent "wobble" in the Government deficit reduction policy was attributed to top rate tax payers "adjusting" payment dates to minimise the effect of the 50% rate. Can we expect HMRC to release the dogs on these tax evaders or do they go on the too difficult pile.

Gregg53

Thanks both for your replies-

TaxSaviour- As I left my employment in the last tax year I thought that redundancy pay may be classed as taxable in that tax year, but whilst "earnings" may be classed as taxable in the year the person becomes entitled to it as per the manual you quote, redundancy payments are taxable in the tax year you receive the money and are taxed upon it, not the year in which you were made redundant and HMRC agree that this is the case.

Interesting point re Self Assessment, I've been on SA for years, but received a letter from HMRC yesterday saying that they've decided I should be on SA and I need to register accordingly!

John- I'm not a top tax rate payer and certainly didn't adjust the dates! (If that's what your implying) Neither did my previous employer, it's just how it fell.

I did receive the call I requested from HMRC, yesterday. The lady's opening lines were that she "probably couldn't help" as she wasn't a redundancy expert. She also said that HMRC had no records of me being paid anything by my ex employer in this tax year. This is due to my ex employer filling out my P45 incorrectly, just showing my leaving date and severance pay, and HMRC think that's all I received last year, (even though it states my original 13/14 tax code) until I ask them to check their P14 yearly return which then they realise is different.
Of course this was known about back in April and hence why I was asked to get a 13/14 statement of pay and earnings which I returned with my claim weeks ago.

The lady said that the dept. dealing with my claim had written back to me last Wednesday but she didn't know what they were saying or asking for and couldn't phone them or ask them to phone me. All she could do was ask for a copy of the letter to be sent to her which could take up to 5 working days and then she would contact me. Apparently I'm not allowed to contact her when I receive my letter, which incidentally I've still not received as of this morning's post.

She then said she had to go to a meeting and couldn't discuss the matter any further and put me through to a gentleman who advised me to submit my last year's SA return based on the details on my 12/13 statement of pay and earnings and P11d benefits, which may clear the way for sorting out this year, which I've done.

Whichever way, I've been substantially overtaxed and surely it should not take this long to sort out? The bottom line is that I submitted my claim 8 weeks ago this week and still have not had a direct response from the people dealing with it.

Any further advice most welcome.

Thanks- Gregg

xylophone

http://www.hmrc.gov.uk/complaints-appeals/how-to-complain/make-complaint.htm

Whichever way, I've been substantially overtaxed and surely it should not take this long to sort out? The bottom line is that I submitted my claim 8 weeks ago this week and still have not had a direct response from the people dealing with it.

The direct response is (apparently) on its way? Rather than keep chasing your tail, wait either for the letter or until the woman to whom you spoke contacts you, as arranged, some time next week?

If you haven't heard from anybody within the time agreed, see link above - you could also consider contacting your MP?

jimmo

Gregg53 wrote: »

Thanks both for your replies-

TaxSaviour- As I left my employment in the last tax year I thought that redundancy pay may be classed as taxable in that tax year, but whilst "earnings" may be classed as taxable in the year the person becomes entitled to it as per the manual you quote, redundancy payments are taxable in the tax year you receive the money and are taxed upon it, not the year in which you were made redundant and HMRC agree that this is the case.

I am afraid you are wrong there. The earnings basis of assessment went out some years ago.

http://www.hmrc.gov.uk/manuals/eimanual/EIM42205.htm


　

All employment income, wages, salary, bonus and redundancy pay, is assessable when it is received.

However there is also a statutory definition of what received means.

http://www.hmrc.gov.uk/manuals/eimanual/EIM42260.htm

http://www.hmrc.gov.uk/manuals/eimanual/EIM13110.htm