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I feel someone's got to say it.john240870 wrote: »DWP have confirmed that they have sent notification to HMRC each year of my Taxable benefits
So what progress have you made in the last 3 weeks?
On 2 June you had evidence from HMRC itself that it knew about your ESA before 5 April 2016.
Now you seem to have evidence from DWP that they informed HMRC about your ESA at some time before 5 April 2016.
The HMRC evidence is all you need to establish that HMRC had until 5 April 2017 to at least warn you that you had underpaid tax.
The last thing you need right now is to get bogged down with disputes of exactly when DWP first informed HMRC.
You now need to take the bull by the horns and request that HMRC write off the tax underpayment under Official Error.
They can't argue that they did not know about your ESA until after 5 April 2016. They could make other arguments such as they did warn you or you really should have known but you can't really anticipate what they might say. You can only deal with that when you know.0 -
The rule regarding using i formation before 12 months from the end of the tax year does not refer to issuing of calculations, it refers to the update of tax codes to prevent year on year underpayments.
So, if they found out information in Jan 2016, but still hadnt used this information to update your tax code until may 2018, then you could claim ESCA19 as they had failed to use the information.
HMRC can issue a calculation for any year within the same period you are allowed to ask them to review, i.e. the last 4 taxyears
There is also a further part to ESCA19 which is the responsibilty of the taxpayer to understand that the incorrect tax is being deducted.
As I've said many times on here, the responsibility to ensure HMRC is updated and that enough tax is being deducted lies with the individual, not HMRC or any other gov department.
You suggest that you were on ESA at the end of the 15/16 tax year. As ESA is generally paid at an amount lower than the personal allowance, it would normally be the case that you are owed tax back at the year end if you were working then commenced ESA, unless you had another ongoing income such as a pension.
Did you claim an in year repayment using form P50 during the 15/16 tax year?
Can you explain what happened during the 15/16 tax year and provide pay/tax/tax code details for all of your income?[SIZE=-1]To equate judgement and wisdom with occupation is at best . . . insulting.
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Ive been on ESA for the whole of 2015/16 tax year so no P50The rule regarding using i formation before 12 months from the end of the tax year does not refer to issuing of calculations, it refers to the update of tax codes to prevent year on year underpayments.
So, if they found out information in Jan 2016, but still hadnt used this information to update your tax code until may 2018, then you could claim ESCA19 as they had failed to use the information.
HMRC can issue a calculation for any year within the same period you are allowed to ask them to review, i.e. the last 4 taxyears
There is also a further part to ESCA19 which is the responsibilty of the taxpayer to understand that the incorrect tax is being deducted.
As I've said many times on here, the responsibility to ensure HMRC is updated and that enough tax is being deducted lies with the individual, not HMRC or any other gov department.
You suggest that you were on ESA at the end of the 15/16 tax year. As ESA is generally paid at an amount lower than the personal allowance, it would normally be the case that you are owed tax back at the year end if you were working then commenced ESA, unless you had another ongoing income such as a pension.
Did you claim an in year repayment using form P50 during the 15/16 tax year?
Can you explain what happened during the 15/16 tax year and provide pay/tax/tax code details for all of your income?0 -
The rule regarding using i formation before 12 months from the end of the tax year does not refer to issuing of calculations, it refers to the update of tax codes to prevent year on year underpayments.
Can you give a link to any published instructions that say that?
How can that be reconciled with PAYE95005 which talks about when the taxpayer was notified of the arrears?
https://www.gov.uk/hmrc-internal-manuals/paye-manual/paye950050 -
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john240870 wrote: »Ive been on ESA for the whole of 2015/16 tax year so no P50
If you have been on ESA for the whole year what other income do you have that has created a tax liability in that year?[SIZE=-1]To equate judgement and wisdom with occupation is at best . . . insulting.
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Can you give a link to any published instructions that say that?
How can that be reconciled with PAYE95005 which talks about when the taxpayer was notified of the arrears?
https://www.gov.uk/hmrc-internal-manuals/paye-manual/paye95005
That section of the manual actually tells you exactly what I have said.Reconcile individual: HMRC delay: ESC A19: text of the concession
‘Arrears of income tax and capital gains tax may be given up if they result from the failure of HMRC to make proper and timely use of information supplied by
A taxpayer about his or her own income, gains or personal circumstances
Or
An employer, if the information affects a taxpayer’s coding
Or
The Department for Work and Pensions (DWP), about a taxpayer’s state retirement, disability or widow’s pension
Tax will normally be given up only if the taxpayer
Could reasonably have believed that his or her tax affairs were in order
And
Was notified of the arrears more than 12 months after the end of the tax year in which HMRC received the information indicating that more tax was due
Or
Was notified of an over-repayment after the end of the tax year following the year in which the repayment was made
In exceptional circumstances arrears of tax notified 12 months or less after the end of the relevant tax year may be given up if HMRC
Failed more than once to make proper use of the facts they had been given about one source of income
And
Allowed the arrears to build up over two whole tax years in succession by failing to make proper and timely use of information they had been given
It is not the actual timing of the calculation itself that is in question, it is the information contained within the calculation regarding income/benefits/reliefs/allowances etc, and whether or not HMRC failed to use information in the 2015/2016 tax year that they had previously known about.
The calculation can be issued at any time upto 4 years after the end of the tax year (longer in cases of serious fraud which doesn't apply to OP)
In order for this part of ESCA19 to apply for the 15/16 tax year HMRC must have had the information at least 12 months prior to 6 April 2015.
The fact that the tax calc has only just been issued is not the issue here.
The underpayment of tax has not arisen because of the date the tax calculation has been issued the 2015/2016 tax year has been underpaid because of the details contained within that calculation.
The way you are reading the information, to suggest that the tax calculation has to be issued within 12 months from the end of the tax year, would prevent HMRC from ever collecting tax due where HMRC had not been informed until 12 months after the tax year ended.
If that were the case some people would simply withold the information.
The OP has already confirmed that the information was used in March 2016 but after the date where an embargo is placed on tax codes being issued for that year (Codes are not issue to employers/pension providers after 13 March each year as it's likely they will not be operated)
What matters to the OP now is when HMRC originally received that information.
For ESCA19 to apply it would have to have been received on/prior to 5 April 2014.
Another thing to consider is this. This might not be the first calculation issued for 2015/16 asking for payment.
As they were on ESA, and have then started an employment in 2016/17, when the P60U information would have been processed for the 15/16 year(prior to last tax year this would have been around August-November as ESA/JSA details were manually input and not submitted via RTI), if the employment had an estimated income of sufficient amount to collect the underpayment, then it may have been carried forward to be collected in the 2017/2018 tax year.
If for whatever reason this was prevented, i.e. employment ended, income from employment was insufficient etc, then it would not necessarily be confirmed until the 2017/2018 tax year was reviewed, which can happen anytime after 20 April following the end of the tax year. (Which matches when the OP received their calculation).
The OP has said they were getting ESA for the whole of 2015/2016, and that it started in April 2015. It would be quite unusual (although was not impossible in very very few cases in the past) for the total amount of ESA to be more than the tax free allowance of £10600, meaning the ESA would be more than £203 per week.
According to the details here, CB ESA for 15/16 was £73.10 per week, or £3801 a year.
A tax code in not operated by the DWP/JCP when paying ESA.
If the OP had no other employment/pension from when they signed onto ESA until the end of the tax year, there would be no other place that tax could be deducted via PAYE.
We need to understand exactly what happened in 2015/2016 to see why they are underpaid.
These steps should be followed.
1) OP please confirm which year the tax calculation you have received is for. It will tell you at the top of the P800.
I know you have said that the underpaid tax is for 15/16 but just to confirm this please for those of us trying to help.
2) OP, have you checked the tax calculation for 2015/2016 to ensure that the income used in it is correct.
If not do that now. If the income is wrong write or phone HMRC and tell them what the correct figures are.
3) If the figures are correct please post the details from the calculation here.
4) Can you confirm what other income you had in 2015/2016 and when in the tax year you received it.
5) Have you ever to your knowledge received another 2015/2016 tax calculation prior to May 2018.
6)When did you sign off ESA?, did you go into employment or start to receive a pension after this date?
7)Is it possible to confirm (maybe by contacting HMRC) if tghis is the first 2015/2016 tax calculation or have any other been issued from the tax system.[SIZE=-1]To equate judgement and wisdom with occupation is at best . . . insulting.
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Hi thanks for your help I will answer the questions in order.That section of the manual actually tells you exactly what I have said.
It is not the actual timing of the calculation itself that is in question, it is the information contained within the calculation regarding income/benefits/reliefs/allowances etc, and whether or not HMRC failed to use information in the 2015/2016 tax year that they had previously known about.
The calculation can be issued at any time upto 4 years after the end of the tax year (longer in cases of serious fraud which doesn't apply to OP)
In order for this part of ESCA19 to apply for the 15/16 tax year HMRC must have had the information at least 12 months prior to 6 April 2015.
The fact that the tax calc has only just been issued is not the issue here.
The underpayment of tax has not arisen because of the date the tax calculation has been issued the 2015/2016 tax year has been underpaid because of the details contained within that calculation.
The way you are reading the information, to suggest that the tax calculation has to be issued within 12 months from the end of the tax year, would prevent HMRC from ever collecting tax due where HMRC had not been informed until 12 months after the tax year ended.
If that were the case some people would simply withold the information.
The OP has already confirmed that the information was used in March 2016 but after the date where an embargo is placed on tax codes being issued for that year (Codes are not issue to employers/pension providers after 13 March each year as it's likely they will not be operated)
What matters to the OP now is when HMRC originally received that information.
For ESCA19 to apply it would have to have been received on/prior to 5 April 2014.
Another thing to consider is this. This might not be the first calculation issued for 2015/16 asking for payment.
As they were on ESA, and have then started an employment in 2016/17, when the P60U information would have been processed for the 15/16 year(prior to last tax year this would have been around August-November as ESA/JSA details were manually input and not submitted via RTI), if the employment had an estimated income of sufficient amount to collect the underpayment, then it may have been carried forward to be collected in the 2017/2018 tax year.
If for whatever reason this was prevented, i.e. employment ended, income from employment was insufficient etc, then it would not necessarily be confirmed until the 2017/2018 tax year was reviewed, which can happen anytime after 20 April following the end of the tax year. (Which matches when the OP received their calculation).
The OP has said they were getting ESA for the whole of 2015/2016, and that it started in April 2015. It would be quite unusual (although was not impossible in very very few cases in the past) for the total amount of ESA to be more than the tax free allowance of £10600, meaning the ESA would be more than £203 per week.
According to the details here, CB ESA for 15/16 was £73.10 per week, or £3801 a year.
A tax code in not operated by the DWP/JCP when paying ESA.
If the OP had no other employment/pension from when they signed onto ESA until the end of the tax year, there would be no other place that tax could be deducted via PAYE.
We need to understand exactly what happened in 2015/2016 to see why they are underpaid.
These steps should be followed.
1) OP please confirm which year the tax calculation you have received is for. It will tell you at the top of the P800.
I know you have said that the underpaid tax is for 15/16 but just to confirm this please for those of us trying to help.
2) OP, have you checked the tax calculation for 2015/2016 to ensure that the income used in it is correct.
If not do that now. If the income is wrong write or phone HMRC and tell them what the correct figures are.
3) If the figures are correct please post the details from the calculation here.
4) Can you confirm what other income you had in 2015/2016 and when in the tax year you received it.
5) Have you ever to your knowledge received another 2015/2016 tax calculation prior to May 2018.
6)When did you sign off ESA?, did you go into employment or start to receive a pension after this date?
7)Is it possible to confirm (maybe by contacting HMRC) if tghis is the first 2015/2016 tax calculation or have any other been issued from the tax system.
1 Yes its for 2015/16
2 Correct figures
3 £23.000 ish from Employment £5400 ish ESA
4 Salary from employer
5 No
6 Still on it
7 Yes this is the first0 -
In order for this part of ESCA19 to apply for the 15/16 tax year HMRC must have had the information at least 12 months prior to 6 April 2015.
.........
For ESCA19 to apply it would have to have been received on/prior to 5 April 2014.
Really?
We seem to have a fundamental difference of opinion here but I do recognise that you will be up to date on this and I can be accused of living in the past.
Nevertheless if it was my money that was at risk I would take you (or HMRC) on, going to The Adjudicator if necessary.0 -
john240870 wrote: »Hi thanks for your help I will answer the questions in order.
1 Yes its for 2015/16
2 Correct figures
3 £23.000 ish from Employment £5400 ish ESA
4 Salary from employer
5 No
6 Still on it
7 Yes this is the first
So when did your employment end in 2015/16?
Your ESA started on 15th April, but you had 23,000 salary. That seems a lot for 1 month salary? Or is there another reason for sich a high salary whilst being on ESA?
Did you get a redundancy payment or other lump sum payment?
If so when was that last payment made and was any form of tax refund paid by your employer?
On the calculation you have received does it state anywhere that tax has already been refunded?[SIZE=-1]To equate judgement and wisdom with occupation is at best . . . insulting.
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