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MSE News: Millions to repay tax after HMRC errors

edited 30 November -1 at 1:00AM in Cutting Tax
17 replies 4.3K views
2.4K posts
edited 30 November -1 at 1:00AM in Cutting Tax
HMRC mistakes left an estimated 5.5 million underpaying or overpaying their tax through PAYE in 2013-14...
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Millions to repay tax after HMRC errors

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  • chrismac1chrismac1 Forumite
    2.6K posts
    I am glad RTI has been the massive success HMRC has claimed so publicly in the past. If this is success I would hate to see failure!

    Note also that I - along with most accountants and book-keepers I speak to - have noticed a really big increase in duff tax codes for PAYE 2014-2015. Examples include:

    1. A company car which was not in someone's tax code for 13-14 suddenly appearing for 14-15. The person had no use of the car from 1 July 13 when she left her job.

    2. A client being given an extra £6,000 tax-free allowances for no apparent reason.

    3. An employment which ceased in the 2012-13 tax year suddenly appearing on the 14-15 tax code.

    So please check your notices of coding carefully, there are more muck-ups in them than at any time in the past 5 years. And if you look back at the numerous threads on here about duff codes, that is really saying something!
    Hideous Muddles from Right Charlies
  • PincherPincher
    6.6K posts
    PAYE was always subject to correction by filing your taxes, since you can have interest, dividend, capital loss/gains, as well as alternative income, pension contribution and charitable donations.

    When I was getting a salary, I would rather lose some in tax, than file taxes. Once you ask for the tax form, they keep sending it to you, and then you have to file it, whether you have anything to declare or not.

    I still have a phobia about filing taxes, it takes me months of procrastination before I force myself to sit down. This year, I thought I would get it done early, and then the bank says they won't send the 2013/14 tax statement until July. The Horror, the horror.
  • AquamaniaAquamania Forumite
    2.1K posts
    HMRC advices/responses have been attrocious recently.

    We've had so many issues recently, but here is just one example.

    In March I was sent a new tax code for use start of this tax year. It was wrong and I advised HMRC accordingly. HMRC sent a new tax coding with the correction.

    Earlier this month I get another new tax coding (because of something entirely unrelated) But it has the original error back on it.

    I've given up. Will accept the new tax coding and then get a refund when I submit my tax return.
  • edited 20 June 2014 at 10:36AM
    AquamaniaAquamania Forumite
    2.1K posts
    edited 20 June 2014 at 10:36AM
    WTC calculations seem not much better.

    One of our employees brought their annual assessment into me to ask for help. According to the assessment, the employee was going to get about 25% less WTC this year than last year. And nothing has changed at all with her situation from last year (according to the assessment).
    Thats still waiting for HMRC to resolve, but I understand HMRC have reduced the payments in the meantime. :(
  • chrismac1chrismac1 Forumite
    2.6K posts
    My approach to the duff codes is as follows, given that each one takes an average of 15 minutes to resolve on the helplines:

    1. Identify what the correct code should be.
    2. If that will give my payroll staff person less tax-free allowances than the official code, ignore the official code even though strictly I should just apply it like a robot.
    3. If the correct code will give someone more tax-free allowances, call the helpline to get the official code changed to the correct one and then apply it.

    Please note the helplines are utterly snowed under with these calls, a situation which can only get worse as the full extent of the nightmare is publicised better. So it makes sense to only call where making the change is really necessary and ideally at off-peak times such as 8am.
    Hideous Muddles from Right Charlies
  • AquamaniaAquamania Forumite
    2.1K posts
    chrismac1 wrote: »
    .2. If that will give my payroll staff person less tax-free allowances than the official code, ignore the official code even though strictly I should just apply it like a robot.

    The employer is obligated to use the tax code as advised to them by HMRC

    The employer does not see the breakdown of how the tax code has been arrived at (unless the employee shows it them); they just get notified of the tax code to use.

    The employer should refer the employee to HMRC over any queries relating to the tax code HMRC has asked them to use.
  • I'd a letter from HMRC a couple of weeks back telling me my tax code had changed. To 0T :-/

    Two minute phone call with them and it was back up to 1000L.........but in the past I probably wouldn't have thought to challenge it - I wonder how many are in the same boat.
  • millermiller Forumite
    1.3K posts
    Part of the Furniture 1,000 Posts Combo Breaker Photogenic
    I sent in an R40 on behalf of someone else (repayment of tax on savings income).

    Somehow the pension income was entered as £2000 below and the savings gross amount and tax deducted were added together (a clear mistake).

    HMRC then issued a cheque for a larger amount than the refund should be.

    Several weeks later a new P800 arrives with the pension income corrected, but not the error on the savings income.

    A demand for payment then arrives (cheque only by post, no prepaid envelope).

    Phoned up to correct the savings figures on the P800 and now waiting for that to arrive.

    If the R40 had been processed correctly, none of this time wasting activity would have been necessary.

    There needs to be a better complaints procedure with a clear tariff of compensation payable and/or an ombudsman that is easy to access like the FOS.

    The R40 claim for the previous year also had problems due to an RTI problem of HMRC's making.
  • minislimminislim Forumite
    351 posts
    Tenth Anniversary 100 Posts Combo Breaker
    and its the hmrc who say tax doesnt have to be taxing!

    it certainly seems that way.

    a couple of friends who are accountants told me before the real time system started that the hmrc where already having problems before hand.

    and that it was only set to get worse.

    how right they where!

    the only ones that couldnt see the ticking timebomb where hmrc themselves.
  • chrismac1chrismac1 Forumite
    2.6K posts

    I have never before processed a tax code which was not on a P6. But the system is in meltdown. Also, I am filing these codes every month via RTI so HMRC get an opportunity every month to raise this issue. There is no point in me giving someone an extra £6k in tax-free pay, only to have HMRC hound the guy in 2 years' time for the underpayment of tax.

    RTI is real-time information only for the people submitting it. For HMRC it is "same old same old" muck-ups and taking years to process the stuff properly.
    Hideous Muddles from Right Charlies
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