HMRC get your tax code wrong (AFPS related)?
Join Date: Mar 2010
Location: Often in Jersey, but mainly in the past.
Age: 79
Posts: 7,803
Received 135 Likes
on
63 Posts
Nothing new here. I left the RAF in 94, and took on a part-time paid job as an RAF Sports Secretary. My life was subsequently a confetti of Coding Notices, endlessly contradicting each other, moving me up and down the scales ... and as I had to calculate my own pay/tax in my part-time job, it was mind-blowing.
I escaped (I thought) HMRC when they finally told me (around 2001) that my affairs were so simple I no longer needed to submit an S-A return.
I moved to Jersey in 2005. Suddenly, a couple of years ago, despite having an NT (No Tax) coding, HMRC suddenly started demanding S-A tax returns again ... which I did, entering 0 0 0 0 0 and some sarcastic comments in the appropriate fields.
It took TWO years to eventually get the idiotic non-joined-up system to remove me from the system again - in May 2014, some 9 years after I left the UK for good. WTF?
I escaped (I thought) HMRC when they finally told me (around 2001) that my affairs were so simple I no longer needed to submit an S-A return.
I moved to Jersey in 2005. Suddenly, a couple of years ago, despite having an NT (No Tax) coding, HMRC suddenly started demanding S-A tax returns again ... which I did, entering 0 0 0 0 0 and some sarcastic comments in the appropriate fields.
It took TWO years to eventually get the idiotic non-joined-up system to remove me from the system again - in May 2014, some 9 years after I left the UK for good. WTF?
Interesting warning Al, thanks. I have some 'other' income but only get PAYE'd on my pension. Her indoors is just embarking on a second career so we will keep a close eye on HMRC.
Presumably this all comes out correctly (albeit in arrears) through the tax return - or have I missed something there?
Presumably this all comes out correctly (albeit in arrears) through the tax return - or have I missed something there?
Thread Starter
Join Date: Jul 2007
Location: @exRAF_Al
Posts: 3,297
Likes: 0
Received 0 Likes
on
0 Posts
HMRC is adamant that the system now works; anecdotally, lots still fall through the cracks. Keep a beady eye on Mrs Noise's tax codes, make sure that you have a watertight audit trail in the event of making a case against them. It makes it much easier to get your money back if you have told them time, time and time again that you volunteer the right information at every turn.
I'm seeing my accountant this morning, HMRC owes me just under £800 and has done for nearly a year. I can't claim compensation because I have not suffered actual financial loss (bizarre, I know) unless my accountant does the work and invoices me. It's ok though - you only have cause to worry this month and be under the spotlight if you like nags.
HMRC turns attention to horsebox owners in evasion clampdown - 06 Jan 2015 - Accountancy Age
I'm seeing my accountant this morning, HMRC owes me just under £800 and has done for nearly a year. I can't claim compensation because I have not suffered actual financial loss (bizarre, I know) unless my accountant does the work and invoices me. It's ok though - you only have cause to worry this month and be under the spotlight if you like nags.
HMRC turns attention to horsebox owners in evasion clampdown - 06 Jan 2015 - Accountancy Age
Join Date: Oct 2005
Location: Cambridge/Chippenham
Posts: 35
Likes: 0
Received 0 Likes
on
0 Posts
Currently taking HMRC to the Adjudicator for exactly this problem. Over 4 tax years and 2 interim jobs, they have failed to put pension and salary information together and recoup tax on the element of income that fell into the higher tax bracket. This has led to over £7k in underpaid tax, despite full disclosure at the start of each job. Made a claim under ESC A19 which has been flatly rejected several times. The Adjudicator is snowed under atm and estimates it will be several months to come to a decision.
In the meantime the frequent switcheroony of my personal allowance from pension to salary and back again will no doubt continue.
In the meantime the frequent switcheroony of my personal allowance from pension to salary and back again will no doubt continue.
Join Date: Jun 2005
Location: Over the hill (and far away)
Posts: 396
Likes: 0
Received 0 Likes
on
0 Posts
Perseverance is the key, along with an evidential document trail (and a bit of knowledgeable outside help does not go amiss). I was in a similar situation in February last year; a situation partly engendered by HMRC lack of willingness to admit that their procedures were not joined up (we would probably call it incompetence), and partly by three geographically separated tax offices (mot only geographically, they just don't talk to one another.
Here are a couple of letters to Jessica Gorst-Williams of the Daily Telegraph personal finance section (Saturday DT), following a year of fruitless and frustrating correspondence with HMRC (they might look a bit lengthy, but stick with it, the result is worth it):
Dear Jessica
Underpaid Tax Refund Article – Jessica Investigates, DT 22 February 2014
I could almost use Peter Patton’s letter (Your Money, 22 February) as a template, so similar are our experiences dealing with HMRC. Could I therefore ask that you please give my case some consideration; I have attached a sheaf of what I hope is the relevant documentation to support my position.
In February 2013 I received a P800 demand for repayment of tax underpaid in TY 2009-10; the amount underpaid was stated as £4639.40, as the result of application of incorrect tax codes.
From the leading article on page one of Your Money, three conditions need to be met for HMRC to pursue recovery action; in reverse order:
The notification period of 12 months from the end of the tax year in question, 6 April 2010, was exceeded – the P800 demand was issued on 10 February 2013;
There existed a reasonable belief on my part that my tax affairs were in order as a salaried person subject to PAYE tax coding, and with no previous queries from HMRC during the preceding 12 years’ employment with the same employer;
HMRC had sufficient information on an ongoing basis of income information from my employer to enable implementation of the appropriate tax code – this was identified by HMRC themselves by issue of a tax coding notice on 1 March 2010 to my employer to use Code D0 for the remainder of TY 2009-10. Additionally, they had also issued a D0 notice of coding on 10 January 2010 for TY 2010-11. There were many other contradictory notices of coding that reinforce your observation that the nuances of the tax codes are not necessarily familiar to lay people, which most of us are.
I contested the claim for repayment of underpaid tax (6 March 2013), generating a non-virtuous circle of correspondence restating my and HMRC’s relative positions and assertions. This culminated in instigation of the HMRC complaints procedure (4 September 2013), which resulted in a lengthy and convoluted reply and. to me, largely incomprehensible logic. A further HMRC P800 claim dated 27 August 2013 also slipped in the underpaid tax from 2009-10 as an underpayment in TY 2012-13, this time with a small adjustment down of the sum owed to £4223.66.
I admit at this stage that I could see no way of breaking the circle of counter-claims, and given that I was on a slow upward recovery slope from three operations in December 2012 to remove bowel cancer, along with 6 months subsequent chemotherapy, beginning in March 2013, I had somewhat lost the impetus to continue flogging a dead horse. I therefore acquiesced and arranged for the longest period of recovery (of my money) to be instigated with effect from 1 January 2014.
However, I am pleased to report that I am now well on the way to a full recovery, and reinvigorated by your article on the potential to reverse the HMRC position. I do hope that you are able to exert your expertise on HMRC to the same effect as you have recently for other readers.
Dear Jessica
Underpaid Tax Refund Article – Jessica Investigates, DT 22 February 2014
I am pleased to report that HMRC have responded favourably to whatever arguments you presented to them.
I replied today to a telephone message (28 March – HMRC Complaints Office) and was informed by HMRC that my case has been reviewed, resulting in the application of Extra Statutory Concession ESC A19 annulling the P800 claim for £4639.40. I received a cheque from HMRC yesterday refunding the three monthly payments already made, and was told that the standing order for further payments has been cancelled. In addition, HMRC will send me a cheque for £150 in acknowledgement of the stress and anxiety that their actions have caused. A detailed letter is on the way from HMRC; I can send you a copy (or synopsis) if it helps round off the sequence of actions.
I would like to express my sincere thanks to you for taking up my cause to such good effect; I really am most grateful for your successful intervention.
It can be done
Mister B
Here are a couple of letters to Jessica Gorst-Williams of the Daily Telegraph personal finance section (Saturday DT), following a year of fruitless and frustrating correspondence with HMRC (they might look a bit lengthy, but stick with it, the result is worth it):
Dear Jessica
Underpaid Tax Refund Article – Jessica Investigates, DT 22 February 2014
I could almost use Peter Patton’s letter (Your Money, 22 February) as a template, so similar are our experiences dealing with HMRC. Could I therefore ask that you please give my case some consideration; I have attached a sheaf of what I hope is the relevant documentation to support my position.
In February 2013 I received a P800 demand for repayment of tax underpaid in TY 2009-10; the amount underpaid was stated as £4639.40, as the result of application of incorrect tax codes.
From the leading article on page one of Your Money, three conditions need to be met for HMRC to pursue recovery action; in reverse order:
The notification period of 12 months from the end of the tax year in question, 6 April 2010, was exceeded – the P800 demand was issued on 10 February 2013;
There existed a reasonable belief on my part that my tax affairs were in order as a salaried person subject to PAYE tax coding, and with no previous queries from HMRC during the preceding 12 years’ employment with the same employer;
HMRC had sufficient information on an ongoing basis of income information from my employer to enable implementation of the appropriate tax code – this was identified by HMRC themselves by issue of a tax coding notice on 1 March 2010 to my employer to use Code D0 for the remainder of TY 2009-10. Additionally, they had also issued a D0 notice of coding on 10 January 2010 for TY 2010-11. There were many other contradictory notices of coding that reinforce your observation that the nuances of the tax codes are not necessarily familiar to lay people, which most of us are.
I contested the claim for repayment of underpaid tax (6 March 2013), generating a non-virtuous circle of correspondence restating my and HMRC’s relative positions and assertions. This culminated in instigation of the HMRC complaints procedure (4 September 2013), which resulted in a lengthy and convoluted reply and. to me, largely incomprehensible logic. A further HMRC P800 claim dated 27 August 2013 also slipped in the underpaid tax from 2009-10 as an underpayment in TY 2012-13, this time with a small adjustment down of the sum owed to £4223.66.
I admit at this stage that I could see no way of breaking the circle of counter-claims, and given that I was on a slow upward recovery slope from three operations in December 2012 to remove bowel cancer, along with 6 months subsequent chemotherapy, beginning in March 2013, I had somewhat lost the impetus to continue flogging a dead horse. I therefore acquiesced and arranged for the longest period of recovery (of my money) to be instigated with effect from 1 January 2014.
However, I am pleased to report that I am now well on the way to a full recovery, and reinvigorated by your article on the potential to reverse the HMRC position. I do hope that you are able to exert your expertise on HMRC to the same effect as you have recently for other readers.
Dear Jessica
Underpaid Tax Refund Article – Jessica Investigates, DT 22 February 2014
I am pleased to report that HMRC have responded favourably to whatever arguments you presented to them.
I replied today to a telephone message (28 March – HMRC Complaints Office) and was informed by HMRC that my case has been reviewed, resulting in the application of Extra Statutory Concession ESC A19 annulling the P800 claim for £4639.40. I received a cheque from HMRC yesterday refunding the three monthly payments already made, and was told that the standing order for further payments has been cancelled. In addition, HMRC will send me a cheque for £150 in acknowledgement of the stress and anxiety that their actions have caused. A detailed letter is on the way from HMRC; I can send you a copy (or synopsis) if it helps round off the sequence of actions.
I would like to express my sincere thanks to you for taking up my cause to such good effect; I really am most grateful for your successful intervention.
It can be done
Mister B
Join Date: Jun 2005
Location: Over the hill (and far away)
Posts: 396
Likes: 0
Received 0 Likes
on
0 Posts
Further to my previous, here is the source material for disputing HMRC claims (amazing what stuff people keep in their archives - just have to remember where you put it):
http://webarchive.nationalarchives.gov.uk/+/http://www.hmrc.gov.uk/esc/esc.htm
HMRC delays in using information
If you think that HM Revenue & Customs (HMRC) should have already collected the tax due in your Tax Calculation (P800) because the information had already been provided to it and HMRC have failed or delayed to use this information, then in some limited circumstances HMRC may agree not to collect it.
An 'Extra Statutory Concession' (ESC A19) allows HMRC to do this and it only applies to individual taxpayers who owe Income Tax and Capital Gains Tax. It does not apply in any other circumstances where amounts owing to HMRC are in dispute.
The circumstances are that HMRC should have used the information provided within 12 months after the end of the tax year in which it is received to notify the taxpayer of any arrears.
Time limits
The time limit which applies for ESC A19 is where HMRC have failed to use information received about a source of income, within 12 months after the end of the tax year in which the information is received.
For example: on 1 August 2007 HMRC received information about commencement of a new pension in tax year 2007-08 and the end of that tax year is 5 April 2008. HMRC should have either issued a tax code or sent a tax calculation for the above receipt of information before 5 April 2009, which is 12 months after the last day of the tax year 2007-08.
The same time limits apply for any over-repayment of tax that is made in error and HMRC asks for the tax to be paid back.
If no information has been received then ESC A19 cannot be considered.
Reasonable belief that your tax affairs were in order
HMRC will consider the facts and circumstances of any claim that this concession should apply and decide whether it was reasonable for you to believe (prior to receiving the Tax Calculation) that your tax affairs were in order.
In my case HMRC came back with wholly contradictory (to these criteria) replies. As I said, perseverance and a little outside help...
Mister B
http://webarchive.nationalarchives.gov.uk/+/http://www.hmrc.gov.uk/esc/esc.htm
HMRC delays in using information
If you think that HM Revenue & Customs (HMRC) should have already collected the tax due in your Tax Calculation (P800) because the information had already been provided to it and HMRC have failed or delayed to use this information, then in some limited circumstances HMRC may agree not to collect it.
An 'Extra Statutory Concession' (ESC A19) allows HMRC to do this and it only applies to individual taxpayers who owe Income Tax and Capital Gains Tax. It does not apply in any other circumstances where amounts owing to HMRC are in dispute.
The circumstances are that HMRC should have used the information provided within 12 months after the end of the tax year in which it is received to notify the taxpayer of any arrears.
Time limits
The time limit which applies for ESC A19 is where HMRC have failed to use information received about a source of income, within 12 months after the end of the tax year in which the information is received.
For example: on 1 August 2007 HMRC received information about commencement of a new pension in tax year 2007-08 and the end of that tax year is 5 April 2008. HMRC should have either issued a tax code or sent a tax calculation for the above receipt of information before 5 April 2009, which is 12 months after the last day of the tax year 2007-08.
The same time limits apply for any over-repayment of tax that is made in error and HMRC asks for the tax to be paid back.
If no information has been received then ESC A19 cannot be considered.
Reasonable belief that your tax affairs were in order
HMRC will consider the facts and circumstances of any claim that this concession should apply and decide whether it was reasonable for you to believe (prior to receiving the Tax Calculation) that your tax affairs were in order.
In my case HMRC came back with wholly contradictory (to these criteria) replies. As I said, perseverance and a little outside help...
Mister B
Join Date: Mar 2002
Location: On The Road
Posts: 33
Likes: 0
Received 0 Likes
on
0 Posts
and I thought it was just me.....
Retired early 2011, personal allowance applied to pension income. Took up part time employment Sep 2011. Stupidly didn't cotton on straight away that personal allowance was also being applied to that income. I did realise this wasn't right and called HMRC to point it out. 'Pension? what pension? the income from that has been removed from the system' (or words to that effect)
Apparently the fact I had been receiving a pension had been somehow erased as if I had changed employment rather than started something in parallel.
They sent me a demand for the £2500ish underpayment which I am now paying back on a monthly basis for the next 3 years.
I know I earned the income and should have been paying the tax on it at the time but I don't understand why I should be held responsible for what seems like someone's incompetence. I suppose it's just as well I told them when I did, a much bigger debt than the one I have now would really be painful, as it is I feel like I am working partially to pay off a tax bill I shouldn't have had in the first place if someone who cannot be held accountable had done their job properly. Don't suppose there is anything I can do about it but just thought I'd put my six penneth in to maybe re-enforce the thread and give those arriving at the same point in their lives more of a heads up that they need to try and understand what might happen.
I always just trusted tax and pay people to do the right thing, still do in a way. What a Plonker!
Apparently the fact I had been receiving a pension had been somehow erased as if I had changed employment rather than started something in parallel.
They sent me a demand for the £2500ish underpayment which I am now paying back on a monthly basis for the next 3 years.
I know I earned the income and should have been paying the tax on it at the time but I don't understand why I should be held responsible for what seems like someone's incompetence. I suppose it's just as well I told them when I did, a much bigger debt than the one I have now would really be painful, as it is I feel like I am working partially to pay off a tax bill I shouldn't have had in the first place if someone who cannot be held accountable had done their job properly. Don't suppose there is anything I can do about it but just thought I'd put my six penneth in to maybe re-enforce the thread and give those arriving at the same point in their lives more of a heads up that they need to try and understand what might happen.
I always just trusted tax and pay people to do the right thing, still do in a way. What a Plonker!
Join Date: Dec 2006
Location: Wilts
Posts: 183
Likes: 0
Received 0 Likes
on
0 Posts
Perhaps there is something here that the people who run the financial briefing prior to leaving the service should take note of. Fortunately I kept the tax people well up to speed on my income and affairs and managed to mitigate some of the financial cost of having 2 incomes and incorrect personal allowances applied by saving the delta. However, it is evident that the financial advice should include detailed advice on managing both pension and any income earned after resettlement. The session I attended at Tidworth was not particularly memorable I must admit - albeit it was 9 years ago and my memory aint that good any more 
