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Alice H
Alice H, Solicitor/Partner
Category: Law
Satisfied Customers: 2850
Experience:  Partner in national law firm
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I worked for a company whose workers pay accounts were sorted,

Resolved Question:

I worked for a company whose workers pay accounts were sorted, tax wise, by a firm of accountants. I queried a tax bill with HMRC who found that the accountants had used unauthorised tax codes for me, even when they were informed. The accountants had to pay HMRC a sum and now want me to pay it to them. I feel that as they were incompetent and used unauthorised codes, that I should decline.

Ian
Submitted: 3 years ago.
Category: Law
Expert:  Alice H replied 3 years ago.

Alex Hughes :

My name isXXXXX and I'm happy to help with your question today.

Alex Hughes :

So HMRC want you to pay a penalty for this mistake?

Alex Hughes :

How much are they after?

Customer:

No. The accountants have paid the paye tax to HMRC that they did not take out for me from 2009 to 2013. The amount is £4929.88. The accountants want me to pay them the money back. As I said, I feel they were incompetent usingI unauthorised HMRC codes.

Alex Hughes :

OK understood. You can certainly dispute this but the accountant may rely on a principle called 'unjust enrichment' to try and recover the money from you. Essentially the accountant will argue that you are, as a result of a mistake, £4,929.88 better off when you shouldn't be. You can try and reduce this figure for the time and trouble its taken you to sort this problem out including any expenses you've incurred but the botXXXXX XXXXXne is that they may sue you for the balance if you cannot reach an agreement.

Alex Hughes :

My view is that you should respond to the demand for payment making it clear that you do not accept liability and that it would be unjust or unfair to recover money from you when the mistake was theirs and theirs alone. You might wish to add that you will counterclaim for professional negligence and/or report their firm to the regulator for the mistake they made. The accountant will then have to seriously consider whether its worth pursuing this and all the headache it involves.

Customer:

Ok. But the letter to the accountants from HMRC says, "under Income Tax ( PAYROLL) Regs 2003, it is your responsibility to operate PAYE correctly and to pay any tax amounts due. Obviously they failed to do so and my understanding of this letter to them is that they are liable.

Alex Hughes :

Yes - see my second paragraph. The accountants have to act professionally and comply with the regulations. If they have failed to do so you can use that as a defence to any claim they wish to make.

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