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Where Taxpayers and Advisers Meet

PAYE unpaid tax and ESC 19A

Posts: 6
Joined: Mon Nov 21, 2016 4:25 pm

PAYE unpaid tax and ESC 19A

Postby timerichcashpoor » Mon Mar 20, 2017 12:19 pm

Three weeks ago I received an HMRC letter P800 to tell me I owe them (A heart stopping) £7,300 for 2014_15, a year when I was fully employed and on PAYE, paying tax at 40%. Likewise for the previous year 2013_14 I was paying at 40%.

The following day I received another letter saying I I have underpaid tax for the year to 2016 of £5,500, however for 2015_16 (and 2017) I was self employed, submitted my return online and received a refund of £1,100 (in the main due to the 30% relief an EIS investment). I am mystified by this but suspect it is a revised figure from the £7,300 but as there was no accompanying calculation I need to find out why.

Looking at the correspondence for the tax year 2014_15 I can see that in February 2014 they wrote to me saying my new code is BR and I will be charged at 20%. In July 2014 they wrote again to say my new code will be 999L which replaces K3612 (I must have misplaced the letter advising of the code being put at K3612). They wrote again in February 2015 to say my code for that year will now be 952T which replaces 999L.

To arrive at the £7,300 it looks like they have bundled previous years underpayments going back as far as 2011 into the mix together with some pension payments from another year (am still searching for the source of that item) and put them into one lump sum, then given some relief on mileage claim adjustments.

Most of what they have sent me over the years is unclear but as a PAYE employee I have always gone with the flow accepting that it will work itself out eventually. But, looking at it now, I can see they have made error after error, not acted on their own information and cocked it up. They also don't acknowledge some facts I have written to them about claims for allowances on pensions.

Now, approaching retirement, I do not have enough regular income to use my allowances for 2017_18 (using savings/investments to top up) so they cant collect through a coding. I will be making a loss on 2016_17 year so wonder whether some of that can be offset against some of the tax due.

Ultimately I can see that about £4,500 from 2014_15 is underpaid as a result of their tinkering with the codes incorrectly.

I have written a covering letter to appeal the decision and stall the due date of 25th March. My questions are about ESC 19A and how difficult it is to get errors waived e.g. £1600 from 2011_12 not collected through PAYE.

My appeal letter has been signed for at their office but should I also call them? I need to follow up with a detailed letter highlighting their sequence of events and errors.

Is it worth going all the way to the Ombudsman if they turn down what will inevitably be an appeal from me?

Posts: 3107
Joined: Sat Feb 01, 2014 3:26 pm

Re: PAYE unpaid tax and ESC 19A

Postby bd6759 » Mon Mar 20, 2017 10:31 pm

HMRC cannot do anyting about about 2015-16 without amending our self-assessment. Your assessment takes precedence over any calculation they make. If they want to amend yor self assessment they need to write to tell you that they are checking it, and then rrite again with thier conclusions after then have checked it. You have a right of appeal of anything they propse and their letter should have explained that.

Regarding earlier years, ESC A19 may apply, but if HMRC have tried to collect the tax by amending your code, but changes to your circumstances has meant that this has not happened, it can't be said that have not used information. PAYE tax codes can simply estimate allowances and deductions. If things change during the year, it is improbale that the right tax will be colelcted.

Posts: 6
Joined: Mon Nov 21, 2016 4:25 pm

Re: PAYE unpaid tax and ESC 19A

Postby timerichcashpoor » Tue Mar 21, 2017 8:11 am

Thank you

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