Military Personnel - An Easy Inland Revenue Target? A new conspiracy theory!
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Military Personnel - An Easy Inland Revenue Target? A new conspiracy theory!
A question for UK military (or government) personnel. Have you or any of your colleagues recently received Tax Return forms, or penalty notices, going back several years?
I am beginning to believe that Her Majesty's Inland Revenue (if I am still allowed to call it that) are targetting government employees for past years returns because they are easy targets (rather than targetting those who pay no tax at all).
Whilst I would not advocate tax evasion there would appear to be a spate of tax demands and penalty notices being issued to easily traceable personnel for tax years of several years ago. When the tax office is challenged as to why the original was not received the reply is invariably "it was sent to RAF XXXXXXX" or "it was sent to RN Base YYYYYYY". Bases which invariably personnel had served at but MANY years previously, often initial training bases.
The tax office also claim that it "is the individuals responsibility to keep the tax office informed of their current address". (Did you know that?) But then cannot explain how they managed to trace the individual in order to deliver the penalty notices!!!
Does anyone know if the service pay centres, who manage PAYE on behalf of the IR, also notify them of the current pay addresses for all personnel? If they do it would appear that the government's much vaunted crack down on tax evasion is starting with the easily targetted, law abiding, overstretched military. Or have I watched one to many conspiracy theory films?
I am beginning to believe that Her Majesty's Inland Revenue (if I am still allowed to call it that) are targetting government employees for past years returns because they are easy targets (rather than targetting those who pay no tax at all).
Whilst I would not advocate tax evasion there would appear to be a spate of tax demands and penalty notices being issued to easily traceable personnel for tax years of several years ago. When the tax office is challenged as to why the original was not received the reply is invariably "it was sent to RAF XXXXXXX" or "it was sent to RN Base YYYYYYY". Bases which invariably personnel had served at but MANY years previously, often initial training bases.
The tax office also claim that it "is the individuals responsibility to keep the tax office informed of their current address". (Did you know that?) But then cannot explain how they managed to trace the individual in order to deliver the penalty notices!!!
Does anyone know if the service pay centres, who manage PAYE on behalf of the IR, also notify them of the current pay addresses for all personnel? If they do it would appear that the government's much vaunted crack down on tax evasion is starting with the easily targetted, law abiding, overstretched military. Or have I watched one to many conspiracy theory films?
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A very good friend of mine has recently received a bill (£1000+) for apparent shortfalls in his Income Tax over recent years. He is a sqn ldr who has been PAYE in the normal manner, but it would appear that the RAF Pay people have screwed up. I don't know what the current position is, but their initial response was that, whilst it might have been their fault, it was not their problem , as Income Tax is an individual responsibility.
For myself. I have recently received my first ever tax form (FY02-03), very late, after 15 years in the Service. When I queried the reason for it, they couldn't tell me why I'd suddenly been targetted. I have just received one for FY03/04. Can't wait for my P60!
Assuming I am not the only one receiving these things, has anyone in the Services tried to get a rebate on the basis of time worked outside the country? Notwithstanding the existing rules, I wonder how far one might get with an appeal? Personally, I would not have benefitted to date, but I feel really strongly that singlies in particular are spending long periods away, and getting nothing at all for their money! Unlike the Yanks!!
For myself. I have recently received my first ever tax form (FY02-03), very late, after 15 years in the Service. When I queried the reason for it, they couldn't tell me why I'd suddenly been targetted. I have just received one for FY03/04. Can't wait for my P60!
Assuming I am not the only one receiving these things, has anyone in the Services tried to get a rebate on the basis of time worked outside the country? Notwithstanding the existing rules, I wonder how far one might get with an appeal? Personally, I would not have benefitted to date, but I feel really strongly that singlies in particular are spending long periods away, and getting nothing at all for their money! Unlike the Yanks!!
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In the last FY alone, the PMA computer under calculated my tax by £660 through my PAYE, leaving me a hefty bill at the end of the year. As you say, the Innsworth line is that regardless of fault, the problem is mine. Bar Stewards, the lot of them!
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I have a better example. I am FTRS and so my FTRS pay is paid through the usual agents in Wales, whilst my pension is paid through a separate agency in (I think) Bournemouth.
These 2 agencies do not - apparently - speak to each other or coordinate their work. I accept that I should have checked, but I trusted the system (of course they'll look after my interests - they're professionals).
However, it transpired earlier this year that the people paying my pension had been paying it (from the start) minus the basic rate of tax, despite the fact that my FTRS pay was taxed (correctly) on the normal sliding scale, and that my pension should - therefore - have been taxed at 40%.
I have just, therefore, had to pay a bill for just under £7000!!!
As I said, I should theoretically have checked myself, but I am too trusting apparently.
Best you other FTRS check your tax bills.
These 2 agencies do not - apparently - speak to each other or coordinate their work. I accept that I should have checked, but I trusted the system (of course they'll look after my interests - they're professionals).
However, it transpired earlier this year that the people paying my pension had been paying it (from the start) minus the basic rate of tax, despite the fact that my FTRS pay was taxed (correctly) on the normal sliding scale, and that my pension should - therefore - have been taxed at 40%.
I have just, therefore, had to pay a bill for just under £7000!!!
As I said, I should theoretically have checked myself, but I am too trusting apparently.
Best you other FTRS check your tax bills.
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Forgive me if I remain dry-eyed, but isn't the purpose of the Inland Revenue to collect taxes? Bearing in mind taxes pay our wages, we should not be too bitter when the taxman decides to go all zealous on us. If you want to make it harder for them, leave the Service and join some mercenary outfit in Katanga or, better still, retrain as a plumber.
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SCUD, you're missing the point. As much as we all hate it, no-one is saying that we should not fulfil our obligations to pay taxes, indeed as you rightly point out, we are in effect paying for our own salaries.
The point is that whenever a new law is introduced, a new scheme implemented or a crackdown on some criminal or anti-social elements in society announced, bu**er me if it isn't you average hard working man in the street that just wants to get on with life that gets reamed a new ar*ehole, purely and simply because we are an easier target that those who already operate outside the system and cause most of the problems.
What about all those people that are wealthy enough to hire hot-shot accountants to reduce their tax bills to almost nothing? Why not go after them first? As for PMA saying it is our fault but your problem, see how quickly they wipe those smug grins off their inept faces when we redress them or better still charge them for dereliction of duty. You can almost guarantee that they've got all their own affairs squared away.
Having pulled the pin and thrown the grenade, I'm now retiring to a safe distance!
The point is that whenever a new law is introduced, a new scheme implemented or a crackdown on some criminal or anti-social elements in society announced, bu**er me if it isn't you average hard working man in the street that just wants to get on with life that gets reamed a new ar*ehole, purely and simply because we are an easier target that those who already operate outside the system and cause most of the problems.
What about all those people that are wealthy enough to hire hot-shot accountants to reduce their tax bills to almost nothing? Why not go after them first? As for PMA saying it is our fault but your problem, see how quickly they wipe those smug grins off their inept faces when we redress them or better still charge them for dereliction of duty. You can almost guarantee that they've got all their own affairs squared away.
Having pulled the pin and thrown the grenade, I'm now retiring to a safe distance!
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From some of the foregoing posts it is obvious that the Inland Revenue are indeed targeting the military. The reason being that they discovered your Pay Accounts professionals have failed to administer their PAYE responsibilities properly and many of you seem to have been underpaying your tax.
I'd recommend you get professional assistance with any large tax demand - the fees for an accountant to check your tax returns are generally covered by the savings they make. Especially on bills for several thousand pounds back dated for a few years.
I'd recommend you get professional assistance with any large tax demand - the fees for an accountant to check your tax returns are generally covered by the savings they make. Especially on bills for several thousand pounds back dated for a few years.
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Blacksheep
I'm with you.
There's a difference between tax avoidance and tax minimisation. Just about everyone is obliged to pay tax. But no one is obliged to pay more tax than that required by Law.
The Tax Office is not infallible. Money spent in seeking a second opinion is often money well spent - and possibly tax deductible as well.
As for the ineptitude and incompetence of shiny ars@d pay clerks, either uniformed or otherwise, COMPLAIN so that KITA's are administered to those who can't or won't do their jobs properly.
There's a difference between tax avoidance and tax minimisation. Just about everyone is obliged to pay tax. But no one is obliged to pay more tax than that required by Law.
The Tax Office is not infallible. Money spent in seeking a second opinion is often money well spent - and possibly tax deductible as well.
As for the ineptitude and incompetence of shiny ars@d pay clerks, either uniformed or otherwise, COMPLAIN so that KITA's are administered to those who can't or won't do their jobs properly.
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Whether this is true or not I don't know, but my accountant told me that IR officers get measured on the amount of the initial demands that they make and not the final amount of tax collected. Therefore they are inclined to send out huge initial demands that subsequently get reduced by accountants crunching the numbers properly.
This has been a problem for individuals who are self employed on a contract basis.
This has been a problem for individuals who are self employed on a contract basis.
If I receive anything resembling a back-claim of tax, I will advise them that it is incorrect unless it also takes into account the tax I was required (incorrectly) to pay on the education grant element of my UAS pay whilst a student for 4 years... So, if they care to look at my records for 1969-1974, perhaps I may be able to assist further. If not, please $od off!!
Of course what doesn't help is that a lot of people haven't bothered with self-assessment and have relied upon the dubious skills of Binnsworth to make correct PAYE deductions. I always noticed a few corrections each year - usually in my favour.
Hector-the-revenue is normally pretty fair IF you've bothered to fill out his forms or on-line method. beacuse at the end of the day, if he doesn't believe in your honesty when you fill in the forms, then he isn't likely to be told anything again in the future!
Of course what doesn't help is that a lot of people haven't bothered with self-assessment and have relied upon the dubious skills of Binnsworth to make correct PAYE deductions. I always noticed a few corrections each year - usually in my favour.
Hector-the-revenue is normally pretty fair IF you've bothered to fill out his forms or on-line method. beacuse at the end of the day, if he doesn't believe in your honesty when you fill in the forms, then he isn't likely to be told anything again in the future!
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Beagle
Couldn't agree more and it was thanks to one of your tips some time ago re the taxing of Pensions that has saved me time, effort and a stack of cash!! Ta!!
If you are a top rate tax payer then you MUST fill in a tax return form yearly. Why? Cos thats the law!! There are other reasons as well, such as moonlighting which generates a second taxable income.
I have had to fill one in every year since 1992 and with the exception of 2001 I have never had any problems other than minor adjustments. 2001 was the year they decided to have a second look at my affairs. Routine they assured me and routine it was. Done and dusted in a few weeks with no changes.
I still have to fill one in now because my pension from the paymaster requires it thus!! I do mine on line with Taxcalc and it takes minutes.
Toppham Hat
I think you will get nowhere with the time outside the country angle. If you could then everyone on 3 year tours in Cyprus would be serving tax free!! If your company pays you from a UK base then you have to pay income tax at source. Might be different if you are permanently resident abroad.
Opso
AIUI if the tax owed by you at the end of the year is<=£1K you can repay the sum owed over the following tax year by a reduced tax code. Happened to me twice when I went up a rank on reserved rights.
The PAYE system in civvy street (my part any way) seems far more flexible than Binnsworth and much quicker to rectify mistookes!! Mind you that's because the nice people in my payroll office are experts at their job and that's all they do!!
Oh and I can speak directly to the person who does my pay and allowances without going through some muppet in handbrake house!!
Regards
TG
Couldn't agree more and it was thanks to one of your tips some time ago re the taxing of Pensions that has saved me time, effort and a stack of cash!! Ta!!
If you are a top rate tax payer then you MUST fill in a tax return form yearly. Why? Cos thats the law!! There are other reasons as well, such as moonlighting which generates a second taxable income.
I have had to fill one in every year since 1992 and with the exception of 2001 I have never had any problems other than minor adjustments. 2001 was the year they decided to have a second look at my affairs. Routine they assured me and routine it was. Done and dusted in a few weeks with no changes.
I still have to fill one in now because my pension from the paymaster requires it thus!! I do mine on line with Taxcalc and it takes minutes.
Toppham Hat
I think you will get nowhere with the time outside the country angle. If you could then everyone on 3 year tours in Cyprus would be serving tax free!! If your company pays you from a UK base then you have to pay income tax at source. Might be different if you are permanently resident abroad.
Opso
AIUI if the tax owed by you at the end of the year is<=£1K you can repay the sum owed over the following tax year by a reduced tax code. Happened to me twice when I went up a rank on reserved rights.
The PAYE system in civvy street (my part any way) seems far more flexible than Binnsworth and much quicker to rectify mistookes!! Mind you that's because the nice people in my payroll office are experts at their job and that's all they do!!
Oh and I can speak directly to the person who does my pay and allowances without going through some muppet in handbrake house!!
Regards
TG
Did I really save you some cash? Hope so. Bung a couple of quid Capt PPRuNe's way if you feel generous - for 'twas this site which facilitated that information exchange!
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has anyone in the Services tried to get a rebate on the basis of time worked outside the country?
Over the past couple of years, lots of my chaps have spent a fair chunk of the year away and I made inquiries about this on their behalf (the things I do to get a free beer from my SNCOs!).
\My question was that if the likes of David Beckham, Sean Connery etc etc either don't pay or pay reduced taxes for being out of the UK for more than 6months of the year, shouldn't the same logic apply to Service personnel when deployed. The first response from Service Funds ran along the lines of 'ugh dunno' from some gorilla that I interupted delousing herself. The second time I asked last year, OC Accts explained that as employees of HM Govt, we were obliged to pay tax - regardless of which squalid bit of swamp miles away from Blighty we happened to be in at the time.
As such there were 2 options available - we could either pay UK taxes, at the levels they were set at, or we could take pot luck and be made to pay local taxes which could be a lot higher than UK taxes. As such, the Inland Revenue thought it was in our interestes to pay UK taxes.
For the first time in my life I was lost for words. The bottom line of OC Accts explanation was that the Inland Revenue was doing us a favour by making us pay UK taxes whilst we were away. It still didn't answer the question of why we pay any taxes on ops, but it's the best answer I've had in 5 years of asking.
So there you go Toppam - we did try and no it didn't work!
Last edited by CatpainCaveman; 30th Apr 2004 at 00:27.
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As I understand it, if you are domiciled in the UK exemption from income tax liability would require you to:
a) Complete a full tax year outside the UK
b) Spend less than 183 days in the UK during any tax year
c) Spend less than an average of 91 days per year over 4 years
If you are posted abroad (non-UK) then there does seem to be scope to pay local income tax and get a partial UK rebate.
If, however, your dets are such that you meet all the above criteria I would suggest:
a) Killing your boss
b) Doing a runner
c) Killing your boss and then doing a runner
If you fancy a bit of light reading on the subject then may I suggest IR20; just the ticket for those lonely 9 month dets:
http://www.inlandrevenue.gov.uk/pdfs/ir20.pdf
a) Complete a full tax year outside the UK
b) Spend less than 183 days in the UK during any tax year
c) Spend less than an average of 91 days per year over 4 years
If you are posted abroad (non-UK) then there does seem to be scope to pay local income tax and get a partial UK rebate.
If, however, your dets are such that you meet all the above criteria I would suggest:
a) Killing your boss
b) Doing a runner
c) Killing your boss and then doing a runner
If you fancy a bit of light reading on the subject then may I suggest IR20; just the ticket for those lonely 9 month dets:
http://www.inlandrevenue.gov.uk/pdfs/ir20.pdf
You're not alone
Interesting to note that there's a similar thread - 'Has NATS annoyed the IR?', on the ATC forum.
Could it be that the advent of 'Self Assessment', and online (ready calculated) Tax Returns, has considerably reduced the IR workload, leaving their staff more time to go chasing possible underpayments?
Could it be that the advent of 'Self Assessment', and online (ready calculated) Tax Returns, has considerably reduced the IR workload, leaving their staff more time to go chasing possible underpayments?
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Gentlemen,
I know this sounds rather smug and arrogant, but why not get yourself an accountant?
People give me a bit of stick, and think I'm somewhat 'flash' at having an accountant, but I can assure you that he SAVES me far more money than he ever costs me!
The end result is more money in my pocket plus the added relief that I'm not going to be delivered a fast ball by HM Inspector of Taxes.
Think about it guys, there are lots of accountants about who specialise in small personal accounts (not the big business ones)
and they are well worth the £10 or £15 per month that mine costs me.
I suppose the bottom line is, that if he 'more than' pays for himself, what have you got to lose?
As for the 'Baffoons' at PMA, has anyone formally asked what will happen to them regarding their incompetance? Is there the equivelant of a 'tech charge' for Blunties??
Kind regards to all
The Swinging Monkey
I know this sounds rather smug and arrogant, but why not get yourself an accountant?
People give me a bit of stick, and think I'm somewhat 'flash' at having an accountant, but I can assure you that he SAVES me far more money than he ever costs me!
The end result is more money in my pocket plus the added relief that I'm not going to be delivered a fast ball by HM Inspector of Taxes.
Think about it guys, there are lots of accountants about who specialise in small personal accounts (not the big business ones)
and they are well worth the £10 or £15 per month that mine costs me.
I suppose the bottom line is, that if he 'more than' pays for himself, what have you got to lose?
As for the 'Baffoons' at PMA, has anyone formally asked what will happen to them regarding their incompetance? Is there the equivelant of a 'tech charge' for Blunties??
Kind regards to all
The Swinging Monkey
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Good advice !
I can only repeat the advice from Blacksheep , Monkey and others.
Get the help of an accountant , mine has saved me his fee and more over the years.
PAYE is a con and those who dont get advice WILL lose money.
Get the help of an accountant , mine has saved me his fee and more over the years.
PAYE is a con and those who dont get advice WILL lose money.
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Get an accountant
Couldn't agree more.
These days, I'm more familiar with the bastardry of Her Maj's antipodean cousins in the Australian Taxation Office (ATO). Despite what some of these sterling souls might think, there are rules about how much tax one pays. These rules are made by the Parliament, not the ATO. Accountants, and some lawyers specialise in knowing these rules - indeed many of them here in Oz used to work for the ATO and know the score.
As some one who is now self employed, I use one such accountant to handle my affairs. The savings he generates for me are far in excess of his fee - which itself is tax deductible.
I pay what I'm legally obliged to, and no more. Don't take what the ATO or Inland Revenue say at face value. Get professional advice. If that proves to be wrong and you suffer a loss, you can always consider suing the professional concerned.
Incidently, there are processes in Oz to obtain compensation for defective public administration. I'm not sure if that applies in the UK but it's worth checking out.
These days, I'm more familiar with the bastardry of Her Maj's antipodean cousins in the Australian Taxation Office (ATO). Despite what some of these sterling souls might think, there are rules about how much tax one pays. These rules are made by the Parliament, not the ATO. Accountants, and some lawyers specialise in knowing these rules - indeed many of them here in Oz used to work for the ATO and know the score.
As some one who is now self employed, I use one such accountant to handle my affairs. The savings he generates for me are far in excess of his fee - which itself is tax deductible.
I pay what I'm legally obliged to, and no more. Don't take what the ATO or Inland Revenue say at face value. Get professional advice. If that proves to be wrong and you suffer a loss, you can always consider suing the professional concerned.
Incidently, there are processes in Oz to obtain compensation for defective public administration. I'm not sure if that applies in the UK but it's worth checking out.