Tax code error

[Global_Ent]

I have been working for the same company for over 5 years now, but have always thought that i was being underpaid.

I assumed that this was an oversight by my company & that they would make amends at some stage, but didn't instigate anything as i did not want to jeopardise my employment status.

 

Anyway, after years of waiting, i finally got the nerve to enquire as to how to obtain a definitive answer.

I was told that i should contact the tax office, as they would be the authority on this matter.

To cut a longer story short, after i contacted the tax office, i was informed that not only have i been on the wrong tax code with my current employer for the last 5 years, but they actually knew about this & they were supposed to contact me a year (or so) ago, but somehow this matter was forgotten about.

 

It turns out that i had a sizeable amount owed to me, but i wouldn't have found this out if i wouldn't have made contact.

I recently received my cheque from HMRC, but my thoughts are, shouldn't i be further compensated for their errors over such a long period of time (5 years)?

 

I'm aware that if for any reason that i ever owed money to HMRC, i would be pretty much hounded & that there would be serious ramifications if that money i owed to them was delayed for such a period of time.

 

I have been trying to start a venture for years, but it has taken me a while to save funds.

 

I even had to lend money (at exorbitant interest rates) from the payday lenders just to get by for long periods of time, which has cost me literally thousands of pounds in charges.

I feel that there should be some accountability somewhere.

Can anyone offer some advice?

 

Thanks!

Edited February 12, 2015 by citizenB
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[citizenB]

I agree, that you should receive something for them having messed you around. But whether you will or not is a different matter. I will ask for you

 

 

 

I even had to lend money (at exorbitant interest rates) from the payday lenders

 

 

 

BTW, I am sure you mean "Borrow" from the PDLs ?

[GrumpyToSayTheLeast]

I dont think you can if i am right. I believe its your responsibility to ensure your tax code is correct and to question it if you feel its not. I have had the same problem and had £2k returned to me but would never have known if I hadn't of contacted them. I complained and was told that they send out a letter explaining the tax code and if you don't understand it, or disagree, you should contact them or a suitably qualified person. My accountant and my employer said the same thing.

I could be wrong and I'm sure someone else will confirm shortly.

[SabreSheep]

you waited 5 years before challenging it.

 

that could be said to be your issue not theirs

[Global_Ent]

I agree, that you should receive something for them having messed you around. But whether you will or not is a different matter. I will ask for you

 

 

 

 

 

 

BTW, I am sure you mean "Borrow" from the PDLs ?

 

Thanks.

& apologies for the incorrect term.

[Global_Ent]

you waited 5 years before challenging it.

 

that could be said to be your issue not theirs

 

I only waited so long as (firstly) i did not know who would be the correct body to contact), & (secondly) i didn't wish to come across as a trouble maker with my employers.

This is the first experience that i've had with anything remotely like this, so i was unaware of the correct way to handle it.

[firstship]

If HMRC make a mistake it is your responsibility to understand the complexities of Taxation and ask for HMRC to amend their mistake,if you don't, nothing will happen.If you owe the tax man money he will be down on you like a ton of bricks so fast it is unbelievable.This has got to be the only organisation who are not responsible for their mistakes,it is their customer's you and me

 

FS

[SabreSheep]

I only waited so long as (firstly) i did not know who would be the correct body to contact), & (secondly) i didn't wish to come across as a trouble maker with my employers.

This is the first experience that i've had with anything remotely like this, so i was unaware of the correct way to handle it.

 

I understand that and I agree wits frustraighting

 

BUT

 

The facts as it stands is that it took you 5 years to say anything. As the previous poster and others have said, It is Your responceability to make sure YOUR tax code is correct.

 

Sadly with the way the law is (and it sucks) HMRC cannot be liable in any way for the fact it took you 5 years to notice.

[king12345]

Agree with other posters.

Unfortunately HMRC are not accountable for their mistakes.

Just take the refund as an unexpected bonus.

Sometimes it's worth to just accept that the system is imperfect and carry on living peacefully rather than start a war lost from the start.

[Global_Ent]

I understand that and I agree wits frustraighting

 

BUT

 

The facts as it stands is that it took you 5 years to say anything. As the previous poster and others have said, It is Your responceability to make sure YOUR tax code is correct.

 

Sadly with the way the law is (and it sucks) HMRC cannot be liable in any way for the fact it took you 5 years to notice.

 

I assumed that there wouldn't be much that i could do under regular circumstances, but it was just the fact that they (themselves) admitted that they were supposed to send me a cheque last year, but somehow someone neglected to do that.

This is a fact that is on their computer & has been there for at least a year.

If i wouldn't have made contact regarding this, they probably would never have informed me.

It just seems shambolic to me, as they are quick to punish those who hold funds from them.

[SabreSheep]

I assumed that there wouldn't be much that i could do under regular circumstances, but it was just the fact that they (themselves) admitted that they were supposed to send me a cheque last year, but somehow someone neglected to do that.

This is a fact that is on their computer & has been there for at least a year.

If i wouldn't have made contact regarding this, they probably would never have informed me.

It just seems shambolic to me, as they are quick to punish those who hold funds from them.

 

I quite agree, it is unfair

[slick132]

Hi Global and welcome to CAG

 

If HMRC makes a tax refund later than 31st Jan following the end of the tax year in which you overpaid the tax, they should pay you interest.

 

Eg, if you overpaid tax for the tax year ended 5th April 2013 and the Revenue refunded later than 31st Jan 2014, they should pay interest.

 

The bad news is - the rate of interest applicable is just 0.5%.

 

Regarding any consequential additional costs you incurred when borrowing from higher-rate lenders, you will not be able to get anything in compensation.

 

You should have received PAYE Coding Notices which would have showed you were NOT getting the Personal Allowances. You should have queried the Coding Notices back when they received.

 

Alternatively, if you did not get such Coding Notices, you should have queried THIS with your employer's PAYE Tax Office.

 

[blondebubbles]

Hi Global and welcome to CAG

 

If HMRC makes a tax refund later than 31st Jan following the end of the tax year in which you overpaid the tax, they should pay you interest.

 

Eg, if you overpaid tax for the tax year ended 5th April 2013 and the Revenue refunded later than 31st Jan 2014, they should pay interest.

 

The bad news is - the rate of interest applicable is just 0.5%.

 

Regarding any consequential additional costs you incurred when borrowing from higher-rate lenders, you will not be able to get anything in compensation.

 

You should have received PAYE Coding Notices which would have showed you were NOT getting the Personal Allowances. You should have queried the Coding Notices back when they received.

 

Alternatively, if you did not get such Coding Notices, you should have queried THIS with your employer's PAYE Tax Office.

 

 

Can you provide any links to guidance that confirms interest should be paid to the taxpayer?

 

HMRC use a rate of 3% if the employer underpays so why only 0.5% for an overpayment?

 

There is also not an employers own PAYE office, it's a national system.

[slick132]

An employer should always give an employee contact details and the employers PAYE reference number so they can contact HMRC and ask if the right PAYE tax code is operating.

 

There has always been a difference between the rate of interest the Revenue charges a taxpayer on unpaid or late-paid tax, and what they pay as compo when they refund to the taxpayer.

 

[blondebubbles]

An employer should always give an employee contact details and the employers PAYE reference number so they can contact HMRC and ask if the right PAYE tax code is operating.

 

There has always been a difference between the rate of interest the Revenue charges a taxpayer on unpaid or late-paid tax, and what they pay as compo when they refund to the taxpayer.

 

 

The PAYE Reference number will be on any P60 and may also be on the payslip. The employer doesn't give contact details for HMRC, there is one taxes helpline for all taxpayers.

 

https://www.gov.uk/government/organisations/hm-revenue-customs/contact/income-tax-enquiries-for-individuals-pensioners-and-employees

 

Employers have their own taxes helpline.

[slick132]

My point is that Global should have spoken to the employer if they thought they were being underpaid.

 

And the employer should have told Global they were simply operating the tax code supplied by HMRC and that Global could contact HMRC to check this further.

 

Link to the HMRC tables for interest on tax payable; and on tax refunds - http://www.hmrc.gov.uk/rates/interest-late-pay.htm