Six million people in UK have overpaid or underpaid tax

[skinz]

Nearly six million people in the UK have paid the wrong amount of tax.

BBC News - Six million people in UK have overpaid or underpaid tax

About £2bn was underpaid via the Pay as You Earn (PAYE) system in the past two years, with about 1.4 million people owing an average of £1,500 each.

But £1.8bn has also been overpaid and some 4.3 million people will get a rebate because they have paid too much.

Treasury minister David Gauke said that in the current financial climate, the government was not in a position to "just wave goodbye" to the money owed.

He said the government had inherited the problem and the PAYE system - which was created in the 1940s - was struggling to cope with modern working patterns.

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A spokesman for HM Revenue & Customs (HMRC) rejected suggestions that as many as 10 million people might be eligible for a rebate because there is a backlog of unresolved cases from the years before 2008-09.

"We don't recognise the 10 million figure, just because a case is open does not mean a refund is due," he said.

Notification letters
A new computer system introduced by HMRC in 2009 has allowed more discrepancies to be identified.

As a result millions of letters will be sent to taxpayers across the UK informing them of errors in their contributions.

The first 45,000 are expected to arrive on Tuesday, with 30,000 informing recipients they are due a rebate of on average £418.

The remaining 15,000 letters will tell taxpayers they have underpaid and will have their tax code altered next year to recoup the money.


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Paul Lewis, presenter of Money Box on BBC Radio 4: "There is an appeal process"
It is thought that some individuals may face both underpayments and overpayments, which could cancel each another out.

Discrepancies arise when the amounts deducted in tax and National Insurance by employers using the PAYE system do not match the information held on HMRC records.

This most often occurs when individuals change jobs, have more than one job at the same time, or because employers are using the wrong tax code.

In some cases officials say they will consider writing off demands for additional money if taxpayers can demonstrate they provided all the information necessary to calculate their tax correctly.

An HMRC spokesman told the BBC: "The overwhelming majority of PAYE cases - over 40 million - are right, so most people have paid the right amount of tax.

'Boost accuracy'

"But for a variety of reasons in some cases there will be a discrepancy.

"The government accepts that the way we go about deducting tax at source needs to be much more accurate and the introduction of the NPS [computer system] paves the way for a real time system which in turn boosts accuracy."

Continue reading the main story “
Start Quote
It is very difficult to go back and claim benefits you underclaimed, whereas, as demonstrated, if you owe tax it is possible for the revenue to back claim there”
End Quote
John Whiting

Chartered Institute of Taxation
Q&A: Income tax system and you
John Whiting, from the Chartered Institute of Taxation, told the BBC that some of the poorest, including those who received means-tested benefits, could have been hit twice, as their benefits would have been incorrectly calculated.

"It is very difficult to go back and claim benefits you underclaimed, whereas, as demonstrated, if you owe tax it is possible for the revenue to back claim there," he said.

Mr Gauke said the government wanted to move sensitively and cautiously but he recognised the difficult situation some people were facing was "through no fault of their own".

He added: "At the moment we have said that those who owe more than £2,000 - those who are obviously in the most difficult position - we're reviewing exactly how we're going to do that.

"For those who owe less than that we will be seeking to recover that over the course of the 2011-12 tax year through tax codes."

'Heartless'

George Mudie, a Labour MP and member of the Treasury Select Committee, told the BBC he believed there was a case for waiving the debt owed by those who had underpaid.

He said he believed the HMRC had handled the situation badly and unfairly.

He described the HMRC as a "heartless" and "arrogant" organisation and said: "If they want money, they take the money and very rarely are they prepared to consider, even when they make mistakes, not taking the money."

Emma Boon, from campaign group the Taxpayers' Alliance, said the HMRC must take steps to help those told they have to pay more.

"Some of them won't be finding out about it for a few weeks or maybe even a few months, so it could be towards Christmas which really isn't what you want to hear," she said.

In June, the government ordered a review of how the PAYE system works and is encouraging the public to contribute their thoughts about how it could be improved.

 

[skinz]

Why is the tax system so frustrating? | Moneywise

Why is the tax system so frustrating?
By Rebecca Rutt Last Update: Thu, 19/08/2010 - 11:41

After recently joining the world of work following five stretched-out university years, my tax-free days are now over. This is bad news as I attempt to juggle a starting wage with London living, so on receiving my first pay cheque I was cautious to check my PAYE code was right.

I can’t count the number of times I’ve worked in part time jobs and been given the wrong tax code, and my experience so far has been that the HMRC are not that keen on informing people when they’ve paid too much. Despite overpaying in several different jobs, I’ve never had a call telling me I was owed money back.

And it seems I’m not alone. A recent Guardian article said in 2009-10 the HMRC overcharged people £238 million in PAYE errors. This is a whopping 148% increase from 2008-09.

Pensioners, students, unemployed and self-employed people are particularly at risk because they often have multiple sources of income. But if you’re dependent on this money, it is completely unacceptable to wait so long to claim it back.

I’ve made several claims in the past few years and received repayments – but ironically if it had the details correct in the first place the HMRC would have saved money instead of having to employ someone to deal with the administration of issuing repayments.

Currently I’m engaged in another drawn-out battle trying to get money back after working last year on the wrong code. After initially calling and being asked to send my P45, it was about a month before they got back to me with a glorious letter saying I was due a return.

The cheque had to be sent separately for safety reasons so after a week passed, and another week, with no sign of a cheque, I decided to call the office. Following a 40 minute wait on hold, the calm man on the end of the phone (who must be used to dealing with erratic people) told me he would cancel the first cheque and send out another one, which would take around four weeks.

Over a month later I still haven’t received a cheque. I am in tax-limbo – do I call again and waste another 40 minutes of my life, or do I wait and hope it will turn up?

The current system is flawed and costly – I’d be interested to know how many other people can sympathise with my misery through their own personal tax dramas.

 

[skinz]

Don’t fall for tax rebate scams
Last Update: Mon, 06/09/2010 - 12:35

Don’t fall for tax rebate scams | Moneywise

Fraudsters are targeting thousands of taxpayers with scam emails asking for their bank details in order for them to claim tax rebates.

HM Revenue & Customs (HMRC) reports that there's been a huge jump in the number of complaints made about the scam, known as a ‘phishing’ attack, and in the past year it has received over 15,000 reports of fraudulent repayment emails.

The activity of these groups is likely to increase following the news that six million people have been taxed incorrectly in the last year.

The scam emails normally start with a sentence such as ‘Following a review of your fiscal activity you are due a refund of tax of £X' and then ask the recipient to supply their bank or credit card details so a bogus tax refund can be paid out.

However, people who do so are likely to see their bank accounts emptied or their credit card cloned. Their details could also be sold onto other criminal gangs, leading to a high risk of identity fraud.

“I would strongly encourage anyone receiving such an email to immediately send it to us at HMRC for investigation and delete it from their computer," says Lesley Strathie, chief executive of HMRC.

She adds that the tax office would write rather than email, telephone or use a third party agency to contact any taxpayers regarding a refund.

HMRC has released a list of some of the email addresses used by the scammers as part of the tax rebate phishing attack. They include:

•refundtax @hmrc.gov.co.uk
•TaxRefund @hmrc.gov.uk
•service @hmrc.gsi.gov.uk
•claims @hmrc.direct.gov.uk
•notice @hmrc.gov.uk
•hmrc @hmrc.gov.uk
•admin @hmrc.gsi.gov.uk
•info @hmrc.gsi.gov.uk
•no-reply @hmrc.gsi.gov.uk
This list will be updated on the HRMC website.

If you receive an email from one of the above email addresses, you should not reply and instead forward it over to HMRC at [email protected]. Don’t forget to delete the email afterwards.

If you receive a similar email from another address, then the same advice applies.

If there is a link in the email, do not be tempted to click on it or open any attachments.

If you have already fallen victim to one of these scams, or are concerned that you have, you should contact your bank or credit card provider as soon as possible.

 

[skinz]

Tax chaos Q&A: How to fight HMRC demands

Tax chaos Q&A: How to fight HMRC demands
Guy Anker
News Editor
7 September 2010

Tax chaos Q&A: How to fight HMRC demands - MoneySavingExpert News

A whopping 1.4 million taxpayers will be asked to pay an average £1,400 back because they've been charged too little tax after an HM Revenue & Customs (HMRC) blunder.

The chaos means 5.7 million taxpayers could have been paying the wrong amount during the 2008/09 and 2009/10 tax years. Some 4.3 million have overpaid and are due cash back, while the rest have underpaid (see the 2010/11 Tax Breakdown guide).

HMRC says where it has not followed its own rules it will write-off money owed if the taxpayer complains through the appropriate channels.

So what must you do if you owe tax and how can you avoid paying?

What's happening now?

HMRC is set to send out letters, called P800 tax calculations, to affected taxpayers between now and Christmas informing them whether they owe or are owed cash, and how much.

The first 45,000 P800s would have landed on doorsteps today.

Who is affected?

The blunder only affects those who pay tax via the Pay As You Earn (PAYE) system where money is deducted by an employer.

Within that group, those with complicated affairs are most likely to have been given the wrong tax code by HMRC, meaning the wrong amount of tax was deducted.

This is most likely to affect anyone with more than one job or pension, anyone who has changed job or those who receive benefits via their employer such as health insurance or a company car.

I'm been asked to pay money back. Must I pay it all?

Not necessarily. Accountants say there is a little-known clause dug deep in the HMRC rule-book, called the 'Extra Statutory Concession (ESC) A19', which states the Revenue must give up any tax if it has not followed its procedures correctly.

An HMRC spokesman says the Revenue will not fight any genuine claims, adding: "People are fully entitled to this concession and we feel an obligation to them so we won't fight it."

The upshot of the ESC A19 rules is that, say, HMRC miscalculated tax for the 2008/09 tax year, which ended in April 2009, you may now be able to escape paying any underpayments for that year.

Under the rules, HMRC won't collect tax if it has failed to properly use information supplied by a taxpayer, their employer or the Department for Work and Pensions if the taxpayer is notified of the underpayment over 12 months after the end of the tax year in which the Revenue received the information.

In the example, the ESC A19 clause may be cited now as the 12-month cut-off was in April 2010.

In exceptional circumstances, underpaid tax notified less than 12 months after the end of the tax year may be waived if the Revenue failed more than once to make proper use of the information or allowed the arrears to build up over two successive tax years.

If you want to complain, raise this with your tax office but it will only work HMRC received the correct information.

I've decided/have to pay tax back. What are my options?

If you owe under £2,000 you can pay this in monthly installments via PAYE during the 2011/12 year, which begins next April.

If you owe £2,000 or more there are two options. You can pay it as a lump sum, though HMRC has yet to set a date by when this must be paid.

Alternatively, you can clear as much as necessary so you owe less than £2,000, which can then be collected via your 2011/12 PAYE tax code.

What if I can't afford to pay my tax back?

HMRC says it may be able to spread payments over a longer period but it stresses it is not making any promises and will treat each case based on individual circumstances.

Accountants also say where paying the tax would cause hardship and the taxpayer has a very low income and no assets, HMRC should temporarily write it off.

But it could ask for it back if the taxpayer's fortunes improve.

Who do I contact about an underpayment?

Speak to you tax office (which may not be your local tax office). The number should appear on your tax underpayment notification.

I'm owed money. What happens next?

If your letter states you overpaid tax you will get a cheque within seven to ten working days of that letter arriving so there is no need to act.

The average rebate will be around £420. You will also get nominal interest at 0.5%.

Of course, make sure the figures on your paperwork are accurate. If inaccurate or your cheque does not arrive in time, contact your tax office. The number should appear on your tax rebate confirmation.

Our view

Martin Lewis, MoneySavingExpert.com creator, says: "The real problem is the tax code system is ridiculously over-complicated.

"You could have the right tax code from your employer under PAYE and the right tax code from a pension provider under PAYE but the two in combination could be wrong.

"And there's no simple way of finding this out so this fails the nonsense test. In other words, if you got your code and it was nonsense most wouldn't be able to tell.

"It's not simply the fact there has been a glitch, it's that most would not have been able to spot it earlier."

We will provide a full guide to ensuring you're on the right tax code in the coming weeks. Please suggest any tips you've got to helping others ensure they're on the correct code in the discussion link below.

Further reading/Key links

Tax help: 2010/11 Tax Breakdown, Taxing Times

 

[TheCheekyMonkey]

I’ve made several claims in the past few years and received repayments – but ironically if it had the details correct in the first place the HMRC would have saved money instead of having to employ someone to deal with the administration of issuing repayments.

Currently I’m engaged in another drawn-out battle trying to get money back after working last year on the wrong code. After initially calling and being asked to send my P45, it was about a month before they got back to me with a glorious letter saying I was due a return.

The cheque had to be sent separately for safety reasons so after a week passed, and another week, with no sign of a cheque, I decided to call the office. Following a 40 minute wait on hold, the calm man on the end of the phone (who must be used to dealing with erratic people) told me he would cancel the first cheque and send out another one, which would take around four weeks.

Over a month later I still haven’t received a cheque. I am in tax-limbo – do I call again and waste another 40 minutes of my life, or do I wait and hope it will turn up?

The current system is flawed and costly – I’d be interested to know how many other people can sympathise with my misery through their own personal tax dramas.

my mate went through the same thing a month ago, it took them 12 months to pay him £6 back that they owed him, i dont know how many times they cancelled the cheques etc etc


its a piss take, you owe them money and they`ll have you asap.

 

[skinz]

interest charges for some, says Revenue

9 September 2010 Last updated at 13:27

interest charges for some, says Revenue

BBC News - Tax letters: interest charges for some, says Revenue

Some taxpayers can expect more letters and tax returns from HMRC in the coming months HM Revenue & Customs (HMRC) says it cannot to tell how many taxpayers may pay interest on top of the unexpected tax calculations being sent out between now and Christmas.

About 1.4 million people are being asked to pay £2bn in unpaid income tax.

Those who owe more than £2,000 may be charged interest if they do not pay on time.

But an HMRC spokesman said "the vast bulk" would owe less than that amount.

Another 4.3 million people are in line for rebates for a total of £1.8bn, because they were overcharged by the authorities during the two tax years 2008-09 and 2009-10.

But interest has focused on those who will be asked to pay more income tax.

Those who owe less than £2,000 will be told the money will be recovered from their salaries via an alteration to their tax code.

They will pay more tax in the coming tax year (2011-12) to make up the shortfall.

In these cases, there is no question of interest being charged as well, and the calculation will be incorporated into their tax code automatically.

Deadlines

The situation is more complicated for those who owe more than £2,000.

They will be sent another letter as a follow-up to the recent calculation letters, but asking them to pay.

If they do not respond within eight weeks, they will be sent a formal self-assessment tax return to complete.

It is the issuing of that return which will trigger a countdown to the point at which interest may be chargeable.

People whose return was sent out before 31 October this year will have to pay by 31 January next year, or start paying interest at 3% a year on the outstanding sum.

Those whose returns are posted to them after 31 October will have three months to return it and a further seven days in which to make the payment. Only then will interest become due.

Agreement

Those who cannot pay the extra amount in time will have a choice.

They can pay off just part of the money, to bring their debt below £2,000, and ask for the rest to be collected via their PAYE code in 2011-12.

Or they can ask for extra time, perhaps spreading the payments over a year, or maybe more.

But even if they come to an agreement with HMRC to stagger these payments, this will not lift their obligation to pay interest.

This will still be chargeable, although on a gradually declining sum.

 

[skinz]

Write-offs would be 'unaffordable'

Write-offs would be 'unaffordable'

BBC News - Tax letters: Write-offs would be 'unaffordable'

Some people will see their tax bill affected by the review The country "cannot afford" to write-off underpayments of income tax caused by calculation system problems, Treasury minister David Gauke has said.

The comments in the Commons came as experts suggested taxpayers had little chance of escaping payments.

Some 45,000 people are receiving letters from HM Revenue and Customs by second-class post explaining that they have paid the wrong amount of tax.

Nearly six million taxpayers will receive letters by Christmas.

Continue reading the main story
Tax and InheritanceHow to deal with a tax letter
Income tax system and you
Where next for tax haul?
CGT changes explained
In response to an urgent question raised in the Commons, Mr Gauke said that the repayments would be sorted out "as painlessly as possible", and the government was looking to reform the "outdated and inefficient" PAYE system.

He said that there was a total of £2bn owed, and that the country could not afford to write off all of this amount.

However, individuals who owed less than £300 in underpaid tax are not being pursued and will not receive letters. This is higher than the previous threshold of £50.

Repayments of between £300 and £2,000 may be spread by HMRC over three years in cases of "genuine hardship" Mr Gauke said, rather than just one year, which is the normal practice.

Challenge

Extra tax charges will average £1,380 and most of these will be recovered via changes to next year's tax codes.

A number of tax experts have suggested that those who have underpaid tax should challenge these underpayments.

A procedure called the extra statutory concession allows HMRC to write off tax, if it was provided with all the relevant information but failed to use it within 12 months of the end of the tax year in which the information was received.

However, Mr Gauke said that people should not "build up their hopes" that appeals would succeed.

"Of course the government is very keen that everybody who is in a position of having underpaid their tax is treated sympathetically," he said.

Continue reading the main story
“
Start Quote
Our experience is that very few of those appeals succeed”
End Quote
David Gauke

Treasury minister

Little chance to avoid bill
"Our experience is that, because this issue is not entirely new - it is the fact that there are underpayments every year with the PAYE system - our experience is that very few of those appeals succeed."

An HMRC spokesman has also said that the concession only applied to a "small number of cases".

And, writing for the BBC News website, former tax inspector Ronnie Ludwig said these challenges only worked when the HMRC had been provided with full information.

"While there may be a number of cases where the concession is applicable and HMRC may then agree to write off the arrears, for the majority that is unlikely to be the case," he said.

Computer system

The mistakes in the tax system have been revealed by the introduction of a new computer system.

The letters refer to the tax years 2008-09 and 2009-10, and it is possible that people have both overpaid and underpaid tax in the two years. These people could receive two letters in the same envelope from the HMRC. The payments could cancel each other out.

The tax authority also confirmed that it would not charge interest on underpayments under £2,000.

There have also been warnings about fraudsters seizing the opportunity to trick people out of cash, claiming they are from HMRC. The tax authority stressed it would never make telephone calls or send e-mails explaining overpayments or underpayments, instead this would be via letters.

This response to the official HMRC's first letters would be used to work out how to proceed with the other cases.

There are an estimated 4.3 million overpayments of tax, and 1.4 million underpayments, Mr Gauke said.

 

[rawsy]

and they want interest on the money they messed up on. they are a set of nutters. i am suprised though that there is actually 6 million people working and paying tax lol.

 

[skinz]

Its a joke that they want interest on their fook up, try getting interest of them for anything they owe you

 

[hgee]

According to a press report..the bureaucrat responsible for this fiasco is a mr phil pavitt, who is one of the highest paid in the public sector, £43000 more than Cameron, and started his career as a debt collector and later joined Transport for London with a staff of 500 and £1billion budget.
The report says, a year into the job,he was investigated over claims that he funnelled hundreds of thousands of pounds of public money into a company in which he had a close personal interest. But he escaped sanction and was given a top job at HRMC in 2009........ ...........................
So one can expect him to be rewarded for failure, as is the norm in our society and a fat bonus and a seat in the House of Lords.

 

[sargie]

This is their **** up so i don't think anyone should have to pay it back. This is going to cause a lot of struggling familys even more heart ache.

Imagine getting a letter close to xmas saying you owe us £2000! They are going to have blood on their hands mark my words.

 

[skinz]

How to deal with a letter from the taxman

How to deal with a letter from the taxman

How to deal with a letter from the taxman | Moneywise

By Mike Thomas Last Update: Fri, 10/09/2010 - 12:42
HM revenue & customs have just begun the first wave of a three month process informing six million taxpayers that they have paid the wrong tax.

The first batch of 45,000 letters hitting the doormat this week will go to some of the 4.3 million individuals who are lucky enough to be due a rebate averaging £420 each, while others will be received by some of the 1.8 million taxpayers who have underpaid, on average by £1,400.

Why the letters?

The tax payment problem arose a while ago when HMRC merged 20 computer systems into one. This resulted in some old data being read as current information. Subsequently, people’s tax codes were incorrect and this affected the amount of tax they paid each month - too much or not enough.

The computer system now shows that HMRC is owed £2 billion through underpaid tax over the past two tax years, but it also revealed that it was overpaid by 1.8bn.

Some have argued there should be no action on either front, while others question why people should overpay their tax at the expense of those who have underpaid. So the HMRC see that a letter to all those involved is the only way of resolving the issue.

For those with a small underpayment - under £300 - the HMRC will not try to recover the sum.

Is the letter a tax demand?

No, it's a tax calculation, the HMRC’s estimate of the taxpayer’s tax position. The letter is purely information from HMRC of what they think your correct tax code is and whether they owe you, or you owe them, money. Don't panic and confuse this with a tax demand.

What do I do if I receive a letter saying I owe them money?

Make sure the information in the letter is correct and read the P800 form and guidance notes. For example, it might state that you have more than one job when you don’t, or that you have a company car when you don’t. The form may also not detail any tax relief you are entitled to, so look out for mistakes straightaway.

Another area to look at is your employer as they may be to blame for not using your personal tax code correctly and deducting the wrong amount of tax from your pay. If so take the issue up with them.

Can I ask for the debt to be written off?

It is possible under certain circumstances. You will need to see if the letter is out of date and if the revenue has delayed more than a year in informing you about any tax shortfall then you can ask to have the debt written off.

This will only apply if, when you open the letter, you find that the underpaid tax relates to the 2008-2009 tax year, (more than 12 months old) and importantly that you are satisfied that you provided the tax office with all the information they needed at the time. If so and they failed to act upon it then you can request an 'Extra-Statutory Concession A19' that the debt be written off.

How do I check my tax code?

You can check your tax code at hmrc.gov.uk/incometax.

You can also use an on-line calculator at listentotaxman.com to ensure your net pay is right for your circumstances.

My tax code is wrong, what is the best way to contact HMRC?

You can contact HMRC on 0845 3000 627 but be aware they are likely to be extremely busy as a result of this current issue. More contact details will be on your letter and P800 form.

It may be best to write, clearly stating your reasons for your grievance and the tax year concerned, 2008-2009 or 2009 -2010. Make sure you send the letter and any supporting documentation recorded delivery to prove postage and keep a copy of everything. See a template letter here.

What if I genuinely cannot afford to repay the debt?

There is the possibility that HMRC will put pressure on you to pay back all the tax immediately. If this happens you should put in counter-proposals, for example, refusing the new tax code and making alternative arrangements to pay by cash instalments over a period that you can manage. Always remember that any underpayment is not your fault, it was caused by HMRC.

Can I appeal against my calculation?

If you submit an A19 concession and it is rejected then you can go to a free appeal service run by the Adjudicator’s Office which is seen as a fair and unbiased complaints intermediary for HMRC grievances.

What happens if I am due a rebate or accept I owe money?

Anyone due a rebate will receive a cheque within seven to ten days of receiving the first letter; this will include 0.5% interest!

If you are one of the unlucky ones that owes money, then provided this is below £2,000 you will receive a new tax code early next year. This new code will come into force in April to enable the collection of any monies owed to be collected throughout that year.

If the amount you owe is above £2,000 then HMRC will write to you and ask for direct payment. If you cannot afford to repay this then you need to contact them to arrange a repayment strategy.

Those in receipt of benefits

This is another issue that has not been resolved as those on very low incomes may have been entitled to higher benefits, denied them through inaccurate tax coding. There is no right to claim backdated benefits.

Scam emails

All your communication from HMRC will be by letter, they will not send you an email. If you receive an email promising a refund and requiring your bank details, don't open it! It will be a scam and the same applies to any telephone calls from HMRC requesting bank details.

Most importantly, if you receive a letter regarding overpayment, don’t ignore it, do something about it as the HMRC do not go away.

 

[skinz]

Template letter to the taxman

Template letter to the taxman

Template letter to the taxman | Moneywise

Last Update: Fri, 10/09/2010 - 12:32
If you are one of the six million people who receive a tax letter informing you of an underpayment, and you want to challenge it, here are some template letters to help you out.


A letter from the taxman is rarely something to look forward to. And if you think you may be one of the 1.4 million who have underpaid tax in the last couple of years, you will dread seeing one on your doorstep.

If you receive a P800 form asking you to pay back underpaid tax, you may feel you are being unfairly treated.

While no challenge is ever guaranteed to work, there are things you can do to make sure your claim is taken seriously, and the Low Incomes Tax Reform Group (LITRG) is on hand to help.

Here are five template letters to get you started.

Where you need to insert some text we have shown in square brackets the information you need to insert. For example: [your own name].


1. Claiming extra-statutory concession A19 (step 2) explained here

2. Employer/pension payer error (step 3)

3. Requesting adjustments (step 4)

4. Explanation request (step 5)

5. Complaint



1. Making a claim through a Extra-Statutory Concession (ESC) A19

Dear Sir

[Your own name]

[Your NI no]

[Any other HMRC reference shown on the P800]

I have received your tax calculation for the tax year [quote that which applies to you - 2008/09, 2009/10 or '2008/09 and 2009/10'].

The calculation suggests that I have underpaid tax for [quote the year or years]. I was unaware that my tax affairs were not in order. I had thought that all the tax that I was due to pay was deducted under PAYE. I believe that the underpayment has arisen because you failed to take action upon relevant information already in your possession for the year in question.

For the tax year 2009/10, I appreciate that you are not notifying me of the arrears more than 12 months after the end of the tax year in which you received the information indicating that more tax was due.

However I feel that the 'exceptional circumstances' condition applies because you:

• failed more than once to make proper use of the facts you had been given about my sources of income

• allowed the arrears to build up over two whole tax years in succession by failing to make proper and timely use of information that you had been given.

I am therefore requesting that under the provisions of ESC A19 that the whole of the underpayment as shown on the P800 should be remitted.

I look forward to hearing from you.



2. If your employer/pension payer made an error

Dear Sir

[Your own name]

[Your NI no]

[Any other HMRC reference shown on the P800]

I have received your tax calculation for the tax year [quote that which applies to you - 2008/09, 2009/10 or '2008/09 and 2009/10'].

The calculation suggests that I have underpaid tax for [quote the year or years].

I believe that the underpayment in question arose through a failure by my employer [substitute/add 'pension payer' for 'employer' if relevant] to operate PAYE correctly and accordingly I believe that the law requires you to seek any tax you believe to be underpaid from my employer [or substitute/add 'pension payer'].

Would you please confirm that you have done so and that I need to take no further action.



3. Requesting an adjustment to the underpaid amount

Dear Sir

[Your own name]

[Your NI no]

[Any other HMRC reference shown on the P800]

I have received your tax calculation for the tax year [quote that which applies to you - 2008/09, 2009/10 or '2008/09 and 2009/10'].

The calculation suggests that I have underpaid tax for [quote the year or years]. I do not believe this to be correct as I consider that you have not taken into account that:

[Here you should list the reasons why the HMRC calculation may be wrong. We have included some illustrations of potential circumstances.]

1. [For example: I have made [Gift Aid payments, personal pension payments] which reduce the claw back of age allowances of which you have taken no account.]

2. [I understand I can claim mileage costs at 40p per mile for up to 10,000 miles and 25p per mile thereafter on necessary business of my employer. However, my employer only reimburses XXp per mile. I therefore claim extra relief of XXX miles at XXp per mile. For example, if you travelled 5,000 business miles and were reimbursed 30p per mile, you can claim tax relief on an extra 10p per mile].

Would you please make the appropriate adjustments and send me your revised calculation for my consideration.



4. Requesting an explanation for your underpayment

Dear Sir

[Your own name]

[Your NI no]

[Any other HMRC reference shown on the P800]

I have received your tax calculation for the tax year [quote that which applies to you - 2008/09, 2009/10 or '2008/09 and 2009/10'].

The calculation suggests that I have underpaid tax for [quote the year or years]. I am unable to agree your proposal. I have tried to understand the reasons for the underpayment but have been unable to do so.

Would you please supply me with a detailed explanation as to how the underpayment occurred and a formal confirmation that, neither yourselves nor my employer, [or substitute/add 'pension payer' if relevant] contributed in any way to the identified underpayment.



5. Making a complaint

Dear Sir

[Your own name]

[Your NI no]

[Any other HMRC reference shown on the P800]

I have received your tax calculation for [quote that which applies to you - 2008/09, 2009/10 or '2008/09 and 2009/10'].

The calculation suggests that I have underpaid tax for [quote the year or years].

I wish to register a formal complaint about the treatment I have received from HMRC which has led to the current situation: [here you need to list facts relevant to your own situation – we have included some illustrations of potential circumstances]

1. [I have been in contact with you numerous times since April 2008 and at no time have you suggested that my tax affairs were other than entirely up to date.]

2. [You have chosen for your own purposes to delay the reconciliation for

2008/09. This has meant a financial shock to me and [if this is relevant to you] a potential loss of means-tested benefits which I could have claimed if you had acted when you had all the relevant information.]

3. [I tried to contact you before to ask if my coding notice was correct but I could not get through on the phone number you provided.]

I have examined the treatment that I can expect to receive as identified in Your Charter and I think that you have failed in those commitments in the following ways:

1. [Explain your list of points]

2. [For example: You have not provided me with information to help me understand what I had to do to check my tax position and when I had to do so in order to prevent this unexpected tax bill. (What I can expect from you, number 2.)]

3. [Example 2: You have not provided me with information in a way in which meets my particular needs as your leaflets direct me to guidance on your website and I have no access to the internet. (What I can expect from you, number 4.)]

In addition I have incurred the following expenses solely as a result of your inability to [respond to my phone calls; answer your telephones; respond to my letters; etc]:

1. [Explain your expenses]

2. [Etc…]

I consider that it is only reasonable that you do not try and collect all of the underpayment shown in your tax calculation.

I look forward to hearing further what you propose.

LITRG also have a great guide on automatic reconciliations – what to do if you get a tax calculation P800 - Guide

 

[techquest]

Seems it would be more just in chasing those that can afford to pay yet find all manner of ways not to pay it and get away with it all the time!