Ask a Law Question, Get an Answer ASAP!
My name isXXXXX and I'm happy to help with your question today.
So HMRC want you to pay a penalty for this mistake?
How much are they after?
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.
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.
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.
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.
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.