Hmrc messed up tax

frenchie01

Hi all
So I completed my self assessment in April last year and it turned out I owed the tax man just over £400. As I work both self employed and paye I asked for it to be taken from my tax code.
Last week I received a letter asking for the £416 in full. When I spoke to Hmrc they admitted a mistake was made by them, a rare thing. They had also assesd me separately on my paye and found that I owed £200. I explained that this was already in my self assessment. They checked and found that to be correct, so cancelled the £200.
Now my problem is that still want the £415 but want it paid in full and can't claim it through my tax code.
I can't afford to pay it in full and need to spread the costs but they've told me that I will be charged interest.
How can this be right?
They admitted it was their mistake to not have take it from my tax code, what can I do?

dori2o

Did HMRC request a self assessment from you or did you just fill one in regardless?

How much income do you receive via PAYE sources?

frenchie01

As I do self employed work I had to complete a self assessment.
PAYE is my main source of income, just over £40000.
My main concern is that they have admitted to making a mistake, in not taking the £415 from my tax code but are now unwilling to rectify this and want the money in full or if I spread the payments I will be charged interest. Can they do this?

xylophone

http://www.rossmartin.co.uk/employers/essential-know-how/453-paye-underpayments-caused-by-hmrc-delay-esc-a19

may be worth a look.

frenchie01

Doesn't help. They failed to collect the payment in my tax code and now want full payment or I can pay monthly but I will be charged interest. Is there anyway around not paying the interest?

suso

How much do you earn in PAYE.?

Dazed_and_confused

According to gov.uk HMRC charge 2.75% interest so maybe whats happened is annoying but its not going to break the bank.

If you paid by the end of March the interest would be approx £1.90 (based on a debt of £415 unpaid for 2 months)

Roseybug

I’ve had a similar problem.
Self-assessment form submitted July 2016 for 2015-16 tax year - £130 owing. I seem to remember the form said they would automatically take it via my PAYE.
Yesterday – received a letter headed “DEBT COLLECTION. Payment due. Please pay on receipt”. I paid up straightaway by debit card on their website, have no issue paying what I owe, although cheesed off that they didn’t just take it as I think they should have done.
I’m worried that this will appear as a black mark on my credit file, as I’m hoping to apply for a mortgage soon. How likely is this?
Have I misunderstood the self-assessment/PAYE process? Or would I have grounds for a complaint if the fault lies with HMRC? (Would only consider complaining if credit record affected).

dori2o

As far as I can remember the calculation only ever states that HMRC will let you know if this amount can be collected via your tax code, not that it definitely will be.

HMRC then issue a Statement later in the year if the amount is not coded and is due in January. At that point you can contact HMRC and ask for it to be coded. Alternatively if you file online you can log in at any time and check the latest position.

If you have proof that you were categorically told it would be coded then use that information to appeal any late payment penalties and object to any interest charges.

Roseybug

Thanks dori2o.


On p6 of the SA100 form, there is a part that says:
"
You can pay the amount you owe, excluding Class 2


National Insurance contributions, through your wages


or pension in the year starting 6 April 2017 if you owe


less than £3,000 for the tax year ended 5 April 2016


and send us your paper tax return by 31 October or


30 December 2016 if you file online. If you want us to


try to collect what you owe this way you don’t need to




do anything more. But if you do not want us to do this




then put ‘X’ in the box"


I'd not put an X in the box, so assumed it would all happen automatically. However, I've just checked and my online account has a statement in it as you describe - but I'd not ever looked for it, as I thought it was all under control and had no reason to log in again... :-(


Edit: apologies for bad formatting - this is new to me.

dori2o

Roseybug wrote: »

Thanks dori2o.


On p6 of the SA100 form, there is a part that says:
"
You can pay the amount you owe, excluding Class 2


National Insurance contributions, through your wages


or pension in the year starting 6 April 2017 if you owe


less than £3,000 for the tax year ended 5 April 2016


and send us your paper tax return by 31 October or


30 December 2016 if you file online. If you want us to


try to collect what you owe this way you don’t need to




do anything more. But if you do not want us to do this




then put ‘X’ in the box"


I'd not put an X in the box, so assumed it would all happen automatically. However, I've just checked and my online account has a statement in it as you describe - but I'd not ever looked for it, as I thought it was all under control and had no reason to log in again... :-(


Edit: apologies for bad formatting - this is new to me.

What date do you get your first pay of the new tax year?

It may still be possible to have the amount coded but you need to act fast.

Phone HMRC. They are open today 9-5. tell the adviser that you asked for the amount to be coded but it hasnt happened. Tell them when your first payday is in the new tax year, this will let the adviser know if there is time for the code to be issued.

If they agree to code out the amount then the interest charge is cancelled.

As for your credit rating. HMRC do not record to your credit file unless they begin court proceedings and sucessfully bring a CCJ against you. You have a significant amount of time to wait before they would consider to start such proceedings.