Paula30th September 2010
As you will have seen in the media over the past few weeks, a new process of tax reconciliation is showing up a far larger scale of PAYE underpayment than usually seen. So now PAYE tax underpayments are crippling people and HMRC still haven’t learned to take responsibility.
Although this was warned about several months ago by the Telegraph newspaper, it didn’t grow legs until the figures were finalised. When that process was finally finished it revealed that 1.4 million people had underpaid tax in the last year and 2.4 million in last 2 years. Despite the fact they had all ‘declared’ the right details.
It seems that, if the slightest thing had changed with your pay and relevant circumstances in that period, there’s a really serious issue in HMRC being able to keep up and calculate your PAYE properly. The total underpaid amount is £2billion, meaning an average bill per person of £1,428. And, of course, these figures only cover the last 2 years. It’s not yet been stated what they are going to do about ‘wrongly reconciled’ accounts going farther back.
Cue the outcry! Unlike anything seen for the £8 billion worth of TC overpayment demands …
But right from the start the ability to ‘appeal’ was touted as a life saver. The idea being that if you can prove you gave HMRC the right information, it ‘should’ be written off on the basis that HMRC failed to act on information given. Now where have we heard that before?
This process is not going to be as reasonable as everyone thinks it will be. HMRC protect themselves in many ways, as we have seen numerous times in the past. For a start, David Gauke has already said they can’t afford to write-off the outstanding amounts; basically the same ‘cannot justify the cost to the public purse’ excuse that Tax Credit overpayment victims get thrown in their face.
So far, the only concession has been an amnesty on all bills under £300. So for those who had a chance of paying it off without years of penance, no bill. Anyone else; tough! They seem to have invented an amnesty that goes along the lines of ‘if we haven’t financially crippled you, we will let you off. If we have financially crippled you; pay up’.
The biggest PR faux pas came when tax chief David Hartnett said he “didn’t think they had anything to apologise for”. Presumably he felt that HMRC suddenly getting their jobs right was not something they should be sorry about. Of course, what he failed to see is that they had been doing it wrong until now, and HMRC gets to pass the effects of the mistakes on to others – at massive worry and cost to the victims. Ringing any bells?
Apparently Hartnett didn’t realise that a fat-cat civil servant passing out unexpected bills during a recession wasn’t going to go down too well, especially when he acted smug about it. He later had to publicly apologise. But note that he has only apologised for ‘if my words were considered insensitive’, not the actual foul-up at all.
Also note that, apparently, there is no guarantee that this second round of calculations is correct. What guarantees are we afforded that this isn’t just another set of incorrect figures from a national institution that has totally lost the plot?
So, for parallels between HMRC’s spectacular efforts with Tax Credit overpayments and PAYE underpayments we have:
And I thought HMRC couldn’t do consistency!
Comment by Norbert at 2:28 pm on 31st October 2010
Just received a statement from HMRC saying I have underpaid tax by £700 for the last 2 years. I checked the salary figures they used which turn out to be higher than the figures on my P60 (which is DEFO correct!). I therefore suspect that this underpayment of taxes totalling £x is a lot of bollocks – everyone involved please check P60’s urgently AND WRITE TO THE CRETINS. They have previously made unsubstantiated demands for tax from me which I have overturned – unlucky for them this time I didn’t trust them in the first place.
Comment by peter caldecott at 5:48 am on 31st July 2011
about time they have realised their mistakes
Comment by peter caldecott at 6:49 am on 25th September 2011
i am stil recieving demands for payments about 6,700 after my discharge from bankruptcy which i know i dont owe, how can they carry on and demanding money from someone who has gone bankrupt plus who does not believe they have not been overpayed which i can prove? crazy they are just trying to frighten people into somehow pay up, but how? big brother
Comment by Paula at 3:56 pm on 29th September 2011
Peter. i’ve had similar cases as well, where HMRC just ignore that a bankruptcy has gone through. did you know of the overpayment at the time of filing? if so, and their listed as one of the creditors they haven’t got a leg to stand on with these demands. send them a copy of the filing paperwork with their name on and a breif letter giving your offical recivers contact details it they want to challenge it. if you didn’t know of the o/p at the time of filing for bankruptcy so they aren’t listed on the bankruptcy petition talk to your offical reciver about it. i would still maintain its a scrubbed debt but get that confirmed. (your nominated offical reciver may even agree to write to them for you. if it was any other of your creditors this would be harrassment)
then if the debt does somehow survive the bankruptcy, start disputing (see our main website for our guide). but don’t fight both battles at once. confirm if they were listed on your bankruptcy first, because if they were, you should have to even dispute.