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TaxRobin
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Experience:  International tax
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I am in dispute with HMRC because of a serious error on their

Customer Question

I am in dispute with HMRC because of a serious error on their part (which they admit to). In November 2011 I changed jobs and my P45 didn't get updated so a P46 was used to advise the HMRC of my status for the year to date. It was filled in correctly and option B was ticked to indicate I had earned and paid tax in the year to date.
When I completed my tax return on line in January 2013, I was advised that I had underpaid £7,758.09 and would have to pay this immediately or start to incur interest. After several letter exchanges, HMRC acknowledge that their basis for taxing me between November 2011 and March 2012 was because they had confirmed (in error), that I had ticked option A in the P46 and had not earned anything prior to changing jobs, and the tax code they issued my new employer reflected this.
I agree I owe some tax, but having spent my earnings on the assumption that they were correctly calculated under the PAYE process, and because HMRC failed to spot their error, I am now faced with having to get a loan or incur charges from HMRC in order to pay them back. Surely this is neither right nor fair? I have asked for a concession and decent payment terms, but have been fobbed off each time. It takes them an average of 70 days to reply to me and they get their facts wrong when they do.
Can you help??
Submitted: 3 years ago.
Category: Tax
Expert:  Nicola-mod replied 3 years ago.
Hello,

I've been working hard to find a Professional to assist you with your question, but sometimes finding the right Professional can take a little longer than expected.

I wonder whether you're ok with continuing to wait for an answer. If you are, please let me know and I will continue my search. If not, feel free to let me know and I will cancel this question for you.

Thank you!
Nicola
Customer: replied 3 years ago.

Hi Nicola,



Please continue the search as I need some concrete advice on this.


 


The issue is that the HMRC made a serious error in not checking the P46 issued in November 2011. Their initial feedback when I appealed over the Tax arrears stated they had checked it, found I had ticked the "A" option and that they had done a thorough investigation and had found nothing wrong in their tax assessment.


I was able to show them a copy of the P46 with the "B" option ticked, so they had no reason to make the error they did and should have given me the correct tax code, i.e. based on the earnings I already had made in that tax year. In fact their statement about having done a proper and thorough analysis of my situation was based on a completely false assertion that I had ticked the "A" option, so how could it have been checked properly, if at all?


 


What I need to understand is what "concession" I am entitled to, if any, now that I have spent the money in good faith, assuming my monthly net payment was accurate at the time. Even if I have to pay it all back, why should I face interest charges (from HMRC or my Bank if I take out a loan), as I cannot pay it all back in one go?


 


So any advice on this would be most welcome.


 


regards


 


Richard

Expert:  Nicola-mod replied 3 years ago.
Hello,

We will continue to look for a Professional to assist you.

Thank you for your patience,
Nicola
Expert:  TaxRobin replied 3 years ago.
Hello,
We never want anyone to go without at least an answer to their question. Your situation is really more complicated then the average question.
As you have exhausted your attempts to get the HMRC to amend their mistake and the situation is past waiting for them to correct I can only suggest that you take the steps to make a complaint.
The HMRC has a page on their site that explains all the steps to take and the numbers if you wish to call instead of sending a letter.

http://www.hmrc.gov.uk/complaints-appeals/how-to-complain/make-complaint.htm

I normally would advise that a person use a professional when dealing with abnormal situations and you can still do that. But I hope this information is at least useful.
Customer: replied 3 years ago.


OK, thanks. I am already dealing with the Complaints Officer, and he is the reason I decided to contact you, so I guess I am not really moving forward with this.


I will seek advice elsewhere once I see the HMRC response to my last letter, complaining about the Complaints Officer!

Expert:  TaxRobin replied 3 years ago.
I wish you the very best in this. I know it is distressing to deal with government and I applaud your continued efforts on your situation.
Please let us know what the outcome is in the end.
We all do care.

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