Taxation ...and the taxman....
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Taxation ...and the taxman....
Gents (and Ladies)....
I have recently retired from just under 39 (Gulp) years Military Service (Light Blue)
I was always under the impression that the 'The Services' were absolutely correct and pedantic as to the amount of tax owed to HMG.
My last Tax Return says I now owe just under £700 to the Inland Revenue....
Having being taxed at source (by HMG), I find this difficult to accept.
Any advice would be welcome.
I appreciate this has nothing to do with 'Flying'...but I did fly for over 30 years with the RAF..
And yes......Beags.
Even shared a Flightdeck with you.........
I have recently retired from just under 39 (Gulp) years Military Service (Light Blue)
I was always under the impression that the 'The Services' were absolutely correct and pedantic as to the amount of tax owed to HMG.
My last Tax Return says I now owe just under £700 to the Inland Revenue....
Having being taxed at source (by HMG), I find this difficult to accept.
Any advice would be welcome.
I appreciate this has nothing to do with 'Flying'...but I did fly for over 30 years with the RAF..
And yes......Beags.
Even shared a Flightdeck with you.........
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Challenge it with HMRC.
I did (OK, it was for £346) and won. Two weeks later, I received a P800 telling me I had overpaid tax by £245 and got a refund!
My theory is this; the HMRC error makers are employed to keep the HMRC error correctors in a job. Perpetual motion in the Civil Service!
I did (OK, it was for £346) and won. Two weeks later, I received a P800 telling me I had overpaid tax by £245 and got a refund!
My theory is this; the HMRC error makers are employed to keep the HMRC error correctors in a job. Perpetual motion in the Civil Service!
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I served for 22 years (light blue) and then retired. I taught in the Auggies for 10 years and was then recalled to duty for the Gulf MkII. Anyway, to cut a long story short, I ended up serving another 7 years, retiring at the end of this year. However, my RAF pension was abated upon my re-enlistment to FTRS but I did continue to receive a paltry £50 or so every month from my 55th birthday (3 years ago).
Last week I received a bill from the same taxman requesting £2222.80p as I had offset my personal allowance against my pension. He then sent out my tax codes for both my salary and pension to the RAF who apparently, under PAYE, are supposed to be able to work out exactly what tax I should have been paying.
So in effect, the tax man and the RAF can't work it out between themselves and I end up with the bill.
Following 20 minutes on the telephone with said taxman, I break the news to him that I don't believe I should be paying for their errors. At this point, I'm put through to another taxman who deals with these types of complaint. I've since spoken to the RAF pay bods who are entirely on my side and insist it's a tax office error. I've sent a recorded delivery letter to the taxman telling him it's all his fault and asked him to sort it out with the RAF because he's not getting any money from me!
QED...
Last week I received a bill from the same taxman requesting £2222.80p as I had offset my personal allowance against my pension. He then sent out my tax codes for both my salary and pension to the RAF who apparently, under PAYE, are supposed to be able to work out exactly what tax I should have been paying.
So in effect, the tax man and the RAF can't work it out between themselves and I end up with the bill.
Following 20 minutes on the telephone with said taxman, I break the news to him that I don't believe I should be paying for their errors. At this point, I'm put through to another taxman who deals with these types of complaint. I've since spoken to the RAF pay bods who are entirely on my side and insist it's a tax office error. I've sent a recorded delivery letter to the taxman telling him it's all his fault and asked him to sort it out with the RAF because he's not getting any money from me!
QED...
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Like you I recently retired. Although the tax man said I didn't need to submit a tax return I filed online every year. Funnily enough I received a rebate each time. IMHO it's always worth filing.
As an aside, although my tax was correct, the system had screwed up my flying pay for nearly a year. One unintelligible pay statement later and I received a bill for £1600 which I'm still paying off
As an aside, although my tax was correct, the system had screwed up my flying pay for nearly a year. One unintelligible pay statement later and I received a bill for £1600 which I'm still paying off
HMRC cocked up my tax codes too, resulting in an underpayment of income tax (PAYE) on my RAF, Private and State Pensions over the past two years.
This draft letter, which I think was compiled by the Institute of Accountants and published in one of the Sunday Papers is a good starter.
Dear Sir,
I am in receipt of the P800 tax calculation for the (2008/09 and 2009/10 tax year(s))
The calculations indicate that I have a further tax liability. As income tax is deducted at source from my income under PAYE and you were in possession of all the relevant facts regarding my income, I had been unaware that my tax affairs were not in order.
I therefore wish to apply under the provisions of Extra Statutory Concession A19 that the underpayment of tax now being demanded should be written off, on the following grounds:
Either the demand for further tax was issued more then 12 months from the end of the tax year in which HMRC was provided with the relevant information to calculate my tax position correctly:
or HMRC have allowed the arrears to build up over more than one tax year, despite all relevant information being provided to you:
or HMRC have failed more than once to make use of the relevant information provided to you about my income.
I look forward to receiving your confirmation that the further tax liability will be written off accordingly.
Your faithfully
http://www.hmrc.gov.uk/specialist/esc.pdf
This draft letter, which I think was compiled by the Institute of Accountants and published in one of the Sunday Papers is a good starter.
Dear Sir,
I am in receipt of the P800 tax calculation for the (2008/09 and 2009/10 tax year(s))
The calculations indicate that I have a further tax liability. As income tax is deducted at source from my income under PAYE and you were in possession of all the relevant facts regarding my income, I had been unaware that my tax affairs were not in order.
I therefore wish to apply under the provisions of Extra Statutory Concession A19 that the underpayment of tax now being demanded should be written off, on the following grounds:
Either the demand for further tax was issued more then 12 months from the end of the tax year in which HMRC was provided with the relevant information to calculate my tax position correctly:
or HMRC have allowed the arrears to build up over more than one tax year, despite all relevant information being provided to you:
or HMRC have failed more than once to make use of the relevant information provided to you about my income.
I look forward to receiving your confirmation that the further tax liability will be written off accordingly.
Your faithfully
http://www.hmrc.gov.uk/specialist/esc.pdf
Last edited by brakedwell; 7th Nov 2010 at 10:28.
Aim between the eyes...
.....i think you'll find that they operate a "virtual office" system. For my service pension I get letters from Ty Glas, for other stuff I've had letters from Leicester, Liverpool and Glasgow and spoken to chaps in Portsmouth and Liverpool. They all have access to the same data base and the notes made by the last person you spoke to. So far, they have all been helpful and eventually we've managed to sort it out amicably.
Make sure you keep notes of all phone calls, when, who you spoke to (both names!! it avoids the "Kevin?? which Kevin? conversations). Be patient polite and persistent and you'll get to the right answer.
The Ancient Mariner
Make sure you keep notes of all phone calls, when, who you spoke to (both names!! it avoids the "Kevin?? which Kevin? conversations). Be patient polite and persistent and you'll get to the right answer.
The Ancient Mariner
Remember the old rule about the taxman?
"I don't bother him; he don't bother me!"
That said, the buggers are taxing my pension at 40% this year...
Which wouldn't be so bad if I was actually making some money...
"I don't bother him; he don't bother me!"
That said, the buggers are taxing my pension at 40% this year...
Which wouldn't be so bad if I was actually making some money...
Interest
On a related issue, two years ago we received a rather peremptory letter from HMRC stating that 'they had received information that we had sold a property without declaring the Capital Gains....and that HMRC would institute recovery of said CGT' or words to that effect. We sold the house - our first house - in 2004. The CGT they were hoping to recover would have topped GBP40K.
The letter then included a long list of questions we 'were required to answer' to avoid the matter going to Court. A quick check with the Accountant confirmed that the HMRC were 'fishing', and that I should not answer these questions without first being cautioned. I rang the investigator, who was clearly working from home (kids having tea in the background) and pointed out that the house in question was our principal private residence that we would have lived in, but for the 'exingencies of the Service'. I also pointed out that I had a letter from HMRC confirming that it was our PPR, and that over the 10 years we had owned the property (and let it for most of that time) we had submitted annual audited tax returns.
The invesitgator claimed he wasn't aware of the background. I forwarded a copy of the PPR letter from HMIR (as was) by recorded post and a week or two later I received the gritted-teeth response of to teh effect of 'we will not proceed with prosecution at this time...'.
kEY POINTS:
- KEEP DETAILED RECORDS FOR AS LONG AS POSSIBLE (ignore the 7 year rule - HMRC can dig much, much further back).
- BE HONEST AND OPEN WITH THEM (they can be very helpful if you do self-assessment).
- DON'T LOSE YOUR TEMPER...A PROVIDE LOGICAL, CLEAR AND RATIONAL ARGUMENTS.
Oh, a JPAC funny: I was recently asked for a copy of my daughter's birth certificate to prove that she exisits so that I can claim LOA for her. I stated that a certified copy, notarised by a JP, had been submitted shortly after her birth. The JPAC staff - bless 'em - said 'Who's JP?'.
Suffice to say, I was not going to part with the original and have that lost...again!
The letter then included a long list of questions we 'were required to answer' to avoid the matter going to Court. A quick check with the Accountant confirmed that the HMRC were 'fishing', and that I should not answer these questions without first being cautioned. I rang the investigator, who was clearly working from home (kids having tea in the background) and pointed out that the house in question was our principal private residence that we would have lived in, but for the 'exingencies of the Service'. I also pointed out that I had a letter from HMRC confirming that it was our PPR, and that over the 10 years we had owned the property (and let it for most of that time) we had submitted annual audited tax returns.
The invesitgator claimed he wasn't aware of the background. I forwarded a copy of the PPR letter from HMIR (as was) by recorded post and a week or two later I received the gritted-teeth response of to teh effect of 'we will not proceed with prosecution at this time...'.
kEY POINTS:
- KEEP DETAILED RECORDS FOR AS LONG AS POSSIBLE (ignore the 7 year rule - HMRC can dig much, much further back).
- BE HONEST AND OPEN WITH THEM (they can be very helpful if you do self-assessment).
- DON'T LOSE YOUR TEMPER...A PROVIDE LOGICAL, CLEAR AND RATIONAL ARGUMENTS.
Oh, a JPAC funny: I was recently asked for a copy of my daughter's birth certificate to prove that she exisits so that I can claim LOA for her. I stated that a certified copy, notarised by a JP, had been submitted shortly after her birth. The JPAC staff - bless 'em - said 'Who's JP?'.
Suffice to say, I was not going to part with the original and have that lost...again!
I don't own this space under my name. I should have leased it while I still could
I claimed a back of tax relief, which they paid, then audited my returns point out that the Services paid my mileage allowance so how did I have the cheek to claim relief. I replied with 2 barrels of buckshot and thanked them as they had unwittingly revealed a journey that I had omitted to claim. They then sent exactly the same gritted teeth response and refused the extra claim.
Retrospectively what their letter really meant was:
'we know you are guilty of tax evasion but will not proceed with prosecution at this time . . . we are watching you.'
This really besmirches your character and is tantamount false accusation and deformation. You have a right to know 'subject access request' what notes they have placed on your file.
My Wife's a Taxman, and they still got mine messed up - once.
Best advice is to compile all your evidence into a letter. then Phone them up and talk to them telling them (politely) what your case is and what you would like them to do. In most cases they will want a letter (like MOD they don't trust those electric mail things) from which to start their review of your casenotes.
Keep copies of everything you send and only send originals by registered mail.
I am reliably informed 'they' can officially go back 9 years, but in some cases...
Best of Luck
Best advice is to compile all your evidence into a letter. then Phone them up and talk to them telling them (politely) what your case is and what you would like them to do. In most cases they will want a letter (like MOD they don't trust those electric mail things) from which to start their review of your casenotes.
Keep copies of everything you send and only send originals by registered mail.
I am reliably informed 'they' can officially go back 9 years, but in some cases...
Best of Luck
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Many thanks to all that have responded to this - and especially to the kind gent who sent me a 'P.M.'
Without wishing to apportion blame, it would appear that the RAF were correct in my 'PAYE' contributions, however the Pensions agency were not.....
Apparently I should have been taxed at 40% on my Pension and not the 20% that I actually paid......Fortunately the time period concerned was less than 5weeks, or the bill would have been significantly higher.....
Word of warning to those about to retire (or those who recently have) -
research the numerous 'on-line' tax calculators and make sure you won't get a nasty shock....
Seems I have no alternative but to pay it........Even though it was their fault.
Such is life I guess........
Without wishing to apportion blame, it would appear that the RAF were correct in my 'PAYE' contributions, however the Pensions agency were not.....
Apparently I should have been taxed at 40% on my Pension and not the 20% that I actually paid......Fortunately the time period concerned was less than 5weeks, or the bill would have been significantly higher.....
Word of warning to those about to retire (or those who recently have) -
research the numerous 'on-line' tax calculators and make sure you won't get a nasty shock....
Seems I have no alternative but to pay it........Even though it was their fault.
Such is life I guess........
I would urge all those Serving to consider carrying out a self-assessment - it's easy, doesn't cost anything and allows you to claim for charitable giving, professional memberships etc. Clearly, if you have second income (eg partner's part-time work, rental income/holiday letting), self-assessment is essential, and generally beneficial.
Although in the above case it appears that the correct PAYE was deducted, DO NOT rely on JPAC to have made the correct deduction. They are not tax-experts and nor are we.
Although in the above case it appears that the correct PAYE was deducted, DO NOT rely on JPAC to have made the correct deduction. They are not tax-experts and nor are we.
DIRECTOR
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The Curator
State old age pensions are paid without tax being deducted and it is your responsibility if you have other income that takes you above the personal tax free allowance to inform HMRC so that they can adjust your tax code. Even more important if it puts you in the 40% bracket.The pensions agency were not at fault as you mention.
Ignorance is not always bliss.
I know of someone in my old company who had his state pension paid for many years without being taxed at the 40% and had a nasty shock tax demand for several thousand£ when tax man discovered his code had not been changed to reflect his new additional income where tax was not deducted at source as is the case with the state old age pension including serps
State old age pensions are paid without tax being deducted and it is your responsibility if you have other income that takes you above the personal tax free allowance to inform HMRC so that they can adjust your tax code. Even more important if it puts you in the 40% bracket.The pensions agency were not at fault as you mention.
Ignorance is not always bliss.
I know of someone in my old company who had his state pension paid for many years without being taxed at the 40% and had a nasty shock tax demand for several thousand£ when tax man discovered his code had not been changed to reflect his new additional income where tax was not deducted at source as is the case with the state old age pension including serps
I don't own this space under my name. I should have leased it while I still could
Thegypsy, you are of course correct although the pension in question was a service pension which is taxed in its own right and not a state retirement pension.
It was still TC's job to tell HMRC. Mind you, given the time scale, the tax code would not have been changed in time.
A word of warning to others taking a retirement job. That too might also keep you in the 40% bracket at least in the year in which you retire. Although that job will also be taxed HMRC need to know of all sources of income.
Mrs PN at one time had a portfolio of 4 jobs in a year and with different tax offices now down to one plus 2 pensions. It was not unusual to get 8 letters from HMRC in one day. I now have 4 pensions, soon to get a 5th, and I can see the need for tax returns for ever more.
It was still TC's job to tell HMRC. Mind you, given the time scale, the tax code would not have been changed in time.
A word of warning to others taking a retirement job. That too might also keep you in the 40% bracket at least in the year in which you retire. Although that job will also be taxed HMRC need to know of all sources of income.
Mrs PN at one time had a portfolio of 4 jobs in a year and with different tax offices now down to one plus 2 pensions. It was not unusual to get 8 letters from HMRC in one day. I now have 4 pensions, soon to get a 5th, and I can see the need for tax returns for ever more.
Regarding pensioners, the main reason for the tax code errors was HMRC's failure to reduce the over 65 personal allowance of £9300 by £1 for every £2 for income above £22300 until it dropped to the standard single personal allowance of £6300. For someone earning £37k this results in an underpayment of £900 p.a. Robber Brown's ever increasing and devious small print rules must take a lot of the blame. 
This error is covered by Statutory Notice 19.
(My figures are rounded down or up for simplicity)
This error is covered by Statutory Notice 19.
(My figures are rounded down or up for simplicity)
I don't own this space under my name. I should have leased it while I still could
brakedwell, quite right. The marginal tax rate for those with more than £23k is therefore 30% not 20% as generally believed. For that reason, where possible, additional income in attributed to Mrs PN and not me.
Some trival interest, such as on a Tesco joint clubcard account is then proportioned 50-50 to minimise my tax. We keep this interest to less than £2 so it attracts no tax.
The other thing to ensure is that any payments attracting gift aid continue to be made by, and claimed for, by the higher tax payer even when tax appears to be at 20%!
Some trival interest, such as on a Tesco joint clubcard account is then proportioned 50-50 to minimise my tax. We keep this interest to less than £2 so it attracts no tax.
The other thing to ensure is that any payments attracting gift aid continue to be made by, and claimed for, by the higher tax payer even when tax appears to be at 20%!
"Tax doesn't have to be taxing! (but we'll do our utmost to make bloody sure it is)"
I had much sympathy for Revenue staff when a few years ago they were lumbered with new software which, I mused, might have been written in the Far East because it appeared to have no regard for Western accounting processes. They got my tax code right in the end - at the third attempt - when I held their hand and helped them disentangle their rats' nest. I was able to do this just because I had kept meticulous records - yes, that is so important.
That sympathy has now evaporated in the heat of searing evidence of wanton job-creation which has just hit my desk; hmm, I guess they are facing cuts as well ... the mind runs to kukris.
Tips:
Yes, it is a very good idea to do your own sums. It is not hard if you have the right information, and don't just rely on the self-assessment bumf which is something of a mushroom job.
Be wary of HMRC "help" sheets, some of which are poorly written and may be expensively misleading. The taxman's internal guidelines are now readily accessible on the HMRC website; however, in a case of ambiguity it can pay to go the extra mile, right back to the wording of 'The Act', again easily available online.
Although the pulp-fiction tax books are not really up to much, I have in the past found Tolley's Tax Guide to be very helpful (the serious grips and dodges for grown-ups, in fairly plain English). It is somewhat expensive; may be worth checking your library service for a recent edition.
I had much sympathy for Revenue staff when a few years ago they were lumbered with new software which, I mused, might have been written in the Far East because it appeared to have no regard for Western accounting processes. They got my tax code right in the end - at the third attempt - when I held their hand and helped them disentangle their rats' nest. I was able to do this just because I had kept meticulous records - yes, that is so important.
That sympathy has now evaporated in the heat of searing evidence of wanton job-creation which has just hit my desk; hmm, I guess they are facing cuts as well ... the mind runs to kukris.
Tips:
Yes, it is a very good idea to do your own sums. It is not hard if you have the right information, and don't just rely on the self-assessment bumf which is something of a mushroom job.
Be wary of HMRC "help" sheets, some of which are poorly written and may be expensively misleading. The taxman's internal guidelines are now readily accessible on the HMRC website; however, in a case of ambiguity it can pay to go the extra mile, right back to the wording of 'The Act', again easily available online.
Although the pulp-fiction tax books are not really up to much, I have in the past found Tolley's Tax Guide to be very helpful (the serious grips and dodges for grown-ups, in fairly plain English). It is somewhat expensive; may be worth checking your library service for a recent edition.