HMRC Debt

QrizB

molerat said:

Flugelhorn said:

crv1963 said:

I do wonder if taxing pensioners small(ish) amounts is actually cost effective for HMRC? My mother has been sent a tax bill for £267 all off her state pension income- no private pensions. I think personally that HMRC will have to create some method of collecting the sums via deduction as more get dragged into the fiscal drag. Not every pensioner is in the position to fork out several hundred pounds.

they will certainly need warning in advance that they may get a bill. Tax codes can be applied  to other pensions am sure they could do the same for state pensions

But at what cost for the computer system to do it ? (Both to the national purse and the sanity of the "customers")

One might suggest that DWP move to paying benefits via a commercial payroll system, like Oracle etc. offer to large employers.

Then one might reflect on the regular reports in the IT press of government Oracle etc. rollouts going badly awry, over budget and under delivery, and possibly decide it's all too much trouble ....

Here's an example.

https://www.theregister.com/2023/05/25/europes_biggest_council_faces_100m_erp_bill/

Sarahspangles

crv1963 said:

I do wonder if taxing pensioners small(ish) amounts is actually cost effective for HMRC? My mother has been sent a tax bill for £267 all off her state pension income- no private pensions. I think personally that HMRC will have to create some method of collecting the sums via deduction as more get dragged into the fiscal drag. Not every pensioner is in the position to fork out several hundred pounds.

This must have been considered, but instead they’ve implemented Simple Assessment. As this gives pensioners 10 months to pay, it doesn’t seem to me to disadvantage them. 

https://www.litrg.org.uk/tax-nic/how-tax-collected/simple-assessment

eskbanker

bullinn1 said:

So if you’re all not too bored with this I have looked more carefully at the HMRC site and found actual calculations, they seem to suggest that their representative gave me incorrect information when he said I owed circa £1,300 … it seems a little like the Post Office “Horizon” scandal ! Whilst I feel it’s a poor way of treating pensioners I will pay the amount but it “sucks” .  

It really isn't anything like that at all - even if there was an error by a customer service agent, it's hardly comparable to the systematic persecution of sub-postmasters over many years, leading to false imprisonments, suicides, etc, so such hyperbole is pretty tasteless IMHO.

In any case, we're obviously not privy to the conversation(s) you had, but presumably if you underpaid tax by £670 in 2023/24, then chances are it'll be the same again in 2024/25, although they'll have the opportunity (but not the obligation) to adjust some tax codings to collect that before April.

bullinn1

jem16 said:

bullinn1 said:

First Paget 

What tax does are applied to each of your pensions? One of them isn’t being taxed at all which won’t help. Sounds like you need to speak to HMRC and get your tax codes worked out better to avoid this.

Thank you jem16 Is it the responsibility of the pension provider to ensure my tax codes are correct … I know absolutely nothing about tax coding and during an hour long conversation they offered little advice basically saying “pay up and expect a demand every year because we can’t code it out”.

Flugelhorn

bullinn1 said:

jem16 said:

bullinn1 said:

First Paget 

What tax does are applied to each of your pensions? One of them isn’t being taxed at all which won’t help. Sounds like you need to speak to HMRC and get your tax codes worked out better to avoid this.

Thank you jem16 Is it the responsibility of the pension provider to ensure my tax codes are correct … I know absolutely nothing about tax coding and during an hour long conversation they offered little advice basically saying “pay up and expect a demand every year because we can’t code it out”.

I think it is best to keep a close eye on the amounts yourself then the bill doesn't come as a surprise.  I've just sent them 3K but I expected to do that and it was in my bank account. You can use sites like https://www.thesalarycalculator.co.uk/salary.php (remember to tick the "I don't pay NI button" ) to get some idea of the total amount payable in any one  year.  Have a go for this current tax year as soon as you get sight of your P60s in May / June

I find tax codes are gobbledygook to me - I had 4 jobs and 3 codes at one point and it was only by adding the whole lot up and putting it into calculators that I could see how much tax I was likely to pay - HMRC tried to take as near as poss but it was always a bit adrift 

bullinn1

LHW99 said:

So if you’re all not too bored with this I have looked more carefully at the HMRC site and found actual calculations,

Which is another thing - if you don't regularly use the HMRC site, finding specific information through the links is difficult if you start by choosing the wrong section. Added to which, even if you are used to it, the tax account isn't updated particularly quickly to show any payments made (certainly not in days as the site implies IME).

It's where people really do need knowledgable help on the enquiry lines.

I very rarely look at the HMRC site, there’s never been a need to, I always, foolishly, figured they were handling things until I get a demand for £670. Also searching the site as I have I cannot find where the £670 comes from … if it’s on one or more of the several persons, what % on what ie what happened between ‘22/‘23 and ‘23/‘24.

bullinn1

eskbanker said:

bullinn1 said:

So if you’re all not too bored with this I have looked more carefully at the HMRC site and found actual calculations, they seem to suggest that their representative gave me incorrect information when he said I owed circa £1,300 … it seems a little like the Post Office “Horizon” scandal ! Whilst I feel it’s a poor way of treating pensioners I will pay the amount but it “sucks” .  

It really isn't anything like that at all - even if there was an error by a customer service agent, it's hardly comparable to the systematic persecution of sub-postmasters over many years, leading to false imprisonments, suicides, etc, so such hyperbole is pretty tasteless IMHO.

In any case, we're obviously not privy to the conversation(s) you had, but presumably if you underpaid tax by £670 in 2023/24, then chances are it'll be the same again in 2024/25, although they'll have the opportunity (but not the obligation) to adjust some tax codings to collect that before April.

I was suggesting a computer error and not trivialising the incident.

bullinn1

Sarahspangles said:

crv1963 said:

I do wonder if taxing pensioners small(ish) amounts is actually cost effective for HMRC? My mother has been sent a tax bill for £267 all off her state pension income- no private pensions. I think personally that HMRC will have to create some method of collecting the sums via deduction as more get dragged into the fiscal drag. Not every pensioner is in the position to fork out several hundred pounds.

This must have been considered, but instead they’ve implemented Simple Assessment. As this gives pensioners 10 months to pay, it doesn’t seem to me to disadvantage them. 

https://www.litrg.org.uk/tax-nic/how-tax-collected/simple-assessment

I don’t seem to have an option of 10 months to pay.

Dazed_and_C0nfused

bullinn1 said:

Sarahspangles said:

crv1963 said:

I do wonder if taxing pensioners small(ish) amounts is actually cost effective for HMRC? My mother has been sent a tax bill for £267 all off her state pension income- no private pensions. I think personally that HMRC will have to create some method of collecting the sums via deduction as more get dragged into the fiscal drag. Not every pensioner is in the position to fork out several hundred pounds.

This must have been considered, but instead they’ve implemented Simple Assessment. As this gives pensioners 10 months to pay, it doesn’t seem to me to disadvantage them. 

https://www.litrg.org.uk/tax-nic/how-tax-collected/simple-assessment

I don’t seem to have an option of 10 months to pay.

The 10 months reference relates to the tax being payable roughly 10 months after the end of the tax year.  

In your case it is payable nearly 13 months after the end of the tax year the tax is owed for.

jem16

bullinn1 said:

jem16 said:

bullinn1 said:

First Paget 

What tax does are applied to each of your pensions? One of them isn’t being taxed at all which won’t help. Sounds like you need to speak to HMRC and get your tax codes worked out better to avoid this.

Thank you jem16 Is it the responsibility of the pension provider to ensure my tax codes are correct … I know absolutely nothing about tax coding and during an hour long conversation they offered little advice basically saying “pay up and expect a demand every year because we can’t code it out”.

No it’s not the pension provider’s responsibility. They will use the codes that HMRC gives them. It’s really between you and HMRC.