Winning My Tax Appeal: Employer Tax Code Error

mini8334

Please read below my initial post in June 2013......

Dear Wise Ladies and Gentlemen,

I have a complex issue regarding my Tax.

I received a Letter from HMRC in November 2012 stating that I owe £5825.37 in arrears for the tax years 08-09, 09-10 and 10-11. I was directed to send a ‘Self Assessment’ form

This letter was not received until I returned from having been serving Overseas for 6 months . . .

In February 2013 I received a £100 penalty for having not sent in a ‘Self Assessment’ form for the tax years 08-09, 09-10 and 10-11.

During these years I was working within the UK for a large children’s charity on full time employment contract. Therefore, I could not understand that I was meant to fill in a self assessment form?

I then was sent my statement from HMRC for the Tax years showing that throughout I had been on an NT tax code. At the time of employment I was an 18 year old boy who had not understanding of tax codes.

Therefore, I had not paid tax on the earning for this period.

I am happy that everyone must pay tax and I understand the necessity to repay.

However, my Employer for this period was never told to put me onto a NT code. They also said that for a company to put me onto an NT tax code that HMRC would direct the company to do so – and they never had.

I have been advised (indirectly) by HMRC employee that I should appeal due to a lack of competency in administrating it staff.

Why did my employer put me on a NT tax code for 3 years?

Are they in anyway liable for putting me in a position of having to pay £5800 because of their poor administration?

Do I have any grounds to appeal?

Has anyone had this happen before?

Any advise would be greatly appreciated.


NOTE: I have never been bankrupt or worked overseas during this period.


...............................................................................

For those of you interest...I made my appeal and was rejected by HMRC. I appealed against the decision under: under ESC A19 – “Employer error in deduction of Pay As You Earn tax ”I maintained that, “The Employer . . . did not take reasonable care to operate PAYE.

In describing a ‘failure to take reasonable care’, this means failing to follow proper instructions to deduct PAYE tax from your pay ”The errors made the employer in deduction of PAYE: “What counts as an error? ”,

1. Failure to operate the right tax code upon start of your employment
2. Using a tax code without HMRC authority
3. Failure to use the same tax code for a new tax year, where no new code has been issued
4. Incorrect use of the PAYE Taxable pay tables
5. Failure to follow guidance issued in Employers Help books or Bulletins

Due to them having failed,“Under-deductions caused by employer error commonly occur for the following reasons
• Using an incorrect tax code
• Incorrectly considering an individuals’ tax status
• Payment of gross pay without operating a code

”With the use of the incorrect tax code (NT) providing gross pay.

This has now been accepted as the error of the Employer and I have been credited the amount I repaid.

I conclude, this was a 6 month process and I have finally regained £5700.

HMRC do have tight guidelines that they stay firm to - However they must adhere to the policy that they dictate by.

I give them their due that in hindsight they were diligent in accept the second appeal and looking further into the problem.

I think the £5700 just about covers the phone bill that I racked up while being placed on hold ..... Any comments welcome!

Kind regards,

MINI

Cook_County

mini8334 wrote: »

Please read below my initial post in June 2013......

Dear Wise Ladies and Gentlemen,

I have a complex issue regarding my Tax.

I received a Letter from HMRC in November 2012 stating that I owe £5825.37 in arrears for the tax years 08-09, 09-10 and 10-11. I was directed to send a ‘Self Assessment’ form

This letter was not received until I returned from having been serving Overseas for 6 months . . .

In February 2013 I received a £100 penalty for having not sent in a ‘Self Assessment’ form for the tax years 08-09, 09-10 and 10-11.

During these years I was working within the UK for a large children’s charity on full time employment contract. Therefore, I could not understand that I was meant to fill in a self assessment form?

I then was sent my statement from HMRC for the Tax years showing that throughout I had been on an NT tax code. At the time of employment I was an 18 year old boy who had not understanding of tax codes.

Therefore, I had not paid tax on the earning for this period.

I am happy that everyone must pay tax and I understand the necessity to repay.

However, my Employer for this period was never told to put me onto a NT code. They also said that for a company to put me onto an NT tax code that HMRC would direct the company to do so – and they never had.

I have been advised (indirectly) by HMRC employee that I should appeal due to a lack of competency in administrating it staff.

Why did my employer put me on a NT tax code for 3 years?

Are they in anyway liable for putting me in a position of having to pay £5800 because of their poor administration?

Do I have any grounds to appeal?

Has anyone had this happen before?

Any advise would be greatly appreciated.


NOTE: I have never been bankrupt or worked overseas during this period.


...............................................................................

For those of you interest...I made my appeal and was rejected by HMRC. I appealed against the decision under: under ESC A19 – “Employer error in deduction of Pay As You Earn tax ”I maintained that, “The Employer . . . did not take reasonable care to operate PAYE.

In describing a ‘failure to take reasonable care’, this means failing to follow proper instructions to deduct PAYE tax from your pay ”The errors made the employer in deduction of PAYE: “What counts as an error? ”,

1. Failure to operate the right tax code upon start of your employment
2. Using a tax code without HMRC authority
3. Failure to use the same tax code for a new tax year, where no new code has been issued
4. Incorrect use of the PAYE Taxable pay tables
5. Failure to follow guidance issued in Employers Help books or Bulletins

Due to them having failed,“Under-deductions caused by employer error commonly occur for the following reasons
• Using an incorrect tax code
• Incorrectly considering an individuals’ tax status
• Payment of gross pay without operating a code

”With the use of the incorrect tax code (NT) providing gross pay.

This has now been accepted as the error of the Employer and I have been credited the amount I repaid.

I conclude, this was a 6 month process and I have finally regained £5700.

HMRC do have tight guidelines that they stay firm to - However they must adhere to the policy that they dictate by.

I give them their due that in hindsight they were diligent in accept the second appeal and looking further into the problem.

I think the £5700 just about covers the phone bill that I racked up while being placed on hold ..... Any comments welcome!

Kind regards,

MINI

Do you know if HMRC are going to recover the money from your employers since they failed to operate PAYE correctly?