HMRC error?

arsenalboy · 12 July 2017 at 12:48PM

I am trying to work out my tax position having taken early retirement some years back and reached state pension age a couple of years ago.

I think I am massively underpaying tax but is it the tax mans error or mine?

I receive 2 private pensions and a full state pension. I have never declared the private pensions but the tax man has used the correct amounts each year from the P60's.

I reached 65 in jan 2015 and received the state pension for 3 months in the 14/15 tax year. HMRC included circa 1500 for the 3 months which was spot on, so they got information from somewhere.

I have just received a P800 for 16/17 tax year and have also just checked the P800 for the 15/16 year. For both years the private pensions are spot on, but the state pension has remained at circa 1500 rather than the circa 6000 I am actually receiving.

It looks as though HMRC has assumed that the initial 3 month state pension was for 12 months and not 3.

The bottom line is that I have underpaid tax on circa 4500 for 2 years. What is my position ?

Pennywise · 12 July 2017 at 1:19PM

arsenalboy wrote: »

What is my position ?

You have to contact HMRC to tell them. It's every individual's OWN responsibility to ensure they're paying the right amount of tax.

antrobus · 12 July 2017 at 1:37PM

arsenalboy wrote: »

.... What is my position ?

You owe HMRC £900 if you are basic rate.

If you contact them now, and point out the error, they may well accept that it's their error and let you off the interest for late payment.

arsenalboy · 12 July 2017 at 1:38PM

Pennywise wrote: »

You have to contact HMRC to tell them. It's every individual's OWN responsibility to ensure they're paying the right amount of tax.

yes I understand that. But before I do that I wanted an opinion as I believe that if HMRC have been provided with information and have not acted upon it for over 12 months, you can apply to have the back tax written off due to HMRC "failure to act"?

antrobus · 12 July 2017 at 1:59PM

arsenalboy wrote: »

yes I understand that. But before I do that I wanted an opinion as I believe that if HMRC have been provided with information and have not acted upon it for over 12 months, you can apply to have the back tax written off due to HMRC "failure to act"?

Yes. Extra-statutory Concession A19. You can give it a go. HMRC apparently expect that people check their tax code to ensure the information included is correct and up to date.

http://www.rossmartin.co.uk/private-client-a-estate-planning/income-losses-claims-reliefs/943-extra-statutory-concession-a19

arsenalboy · 12 July 2017 at 2:09PM

antrobus wrote: »

Yes. Extra-statutory Concession A19. You can give it a go. HMRC apparently expect that people check their tax code to ensure the information included is correct and up to date.

http://www.rossmartin.co.uk/private-client-a-estate-planning/income-losses-claims-reliefs/943-extra-statutory-concession-a19

ESC A19 specifically gives an example of HMRC failing to act on state pension notifications. I am a higher rate tax payer and it is for 2 years, I make that £3600 I potentially owe due to HMRC not acting upon information provided to them, presumably by DWP.

chrismac1 · 12 July 2017 at 2:52PM

Give Esc A19 a try by all means. But even though HMRC are in general a bunch of incompetent clowns, rather than behave professionally they move the goalposts.

So on this site about 4 or 5 years ago we had a field day with Esc A19. Look back on previous posts by the likes of myself and Pennywise. All the HMRC stooges on this site were telling folks to give up and pay their taxes, but the vast majority of taxpayers ended up winning provided they went the full 5 sets.

But this is not Wimbledon, HMRC do not shake hands and say "Well played mate." No way. Instead they have changed the rules on Esc A19 so now they can play with a nice new graphite large sweet spot Powerstrike racquet, but you have to play with the old wooden Dunlop racquet Borg used to use. Still possible to win, but very unlikely.

xylophone · 12 July 2017 at 5:49PM

and have also just checked the P800 for the 15/16 year.

HMRC will expect you to have checked it at the time you received it.

It seems that you didn't so the error has been compounded.

https://www.gov.uk/tax-overpayments-and-underpayments

arsenalboy · 12 July 2017 at 8:09PM

xylophone wrote: »

HMRC will expect you to have checked it at the time you received it.

It seems that you didn't so the error has been compounded.

https://www.gov.uk/tax-overpayments-and-underpayments

I cannot fault any of the advice but nothing is ever straight forward!

If you go back a few years a tax situation which was not straight forward was actually dealt with by a senior person (inspector?). I have recollections of phone calls with such helpful people who seemed to know what they were talking about.

In recent years I have seemed to have been dealt with by either a computer program, or, a school leaver within their first few weeks. My tax situation has never been straight forward but it used to get squared each year.

I have been suffering from HMRC errors for the last 5 years or so and have been providing information to help them put it right. My letters have been incorrectly interpreted and errors compounded. It is not now possible to understand my tax situation without looking at the last 5 years at the same time. Even then there is no audit trail with calculations by HMRC not tying up with previous calculations.
Because of all of this I have shut down for a couple of years and thought let them get on with it without me badgering them like I have in the past.

Now I have discovered the problem first mentioned.

HMRC error?

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