Alleged (!!) underpayment of tax. **RESOLVED**

[mollywobbles]

I spoke to HMRC this morning about this issue. Before sending them the letter they have requested, I thought I'd see if anyone here has any helpful advice...

 

Earlier this year (March) they sent me two tax calculation notices, for 2014-15 and 2015-16, which claim I underpaid tax. The sums involved are c. £150 and c. £1500 respectively. I received a rebate from them for those amounts in those years.

 

Due to the nature of my work, I nearly always receive a rebate so when these arrived I thought nothing of them. Banked the cheques and spent the money, like I always do.

 

I contacted them in April this year to ask why they thought I should pay back the money which THEY had refunded to me, apparently in error.

 

They advised me to write in explaining that I always get these rebates and had had no reason to expect that these were not, like the others, legitimate

. I did so and heard nothing.

 

Having recently moved and enjoying a morning of sorting various outstanding pieces of administration, I called them today for an update.

 

Today I was told that the error results from my having worked on a temporary national insurance number at a past employer and my accounts having been merged.

 

I have every payslip from this employer which clearly show my normal, non-temporary national insurance number. The advisor was forced to concede that this being the case, I would have had absolutely no way of knowing that something was not right, despite her repeated claims that it is my responsibility to ensure my tax affairs are in order. I asked repeatedly what I should or could have done differently and when but no proper answers were given.

 

I am now on maternity leave and so it seems they have essentially put off dealing with this until next year (2018-19) at which point they intend to collect the 'underpaid' sums through my tax code. This will likely make it not worth my while to go to work at all, once other deductions and expenses such as commuting and childcare have been taken into account.

 

I would likely be better off claiming whatever benefits I would be entitled to as an unwaged, non-tax payer. This being the case, they would send me a self assessment and if I didn't pay, refer me to debt collectors, according to the advisor I spoke with today.

 

The advisor I spoke with was insistent that it is my responsibility to pay back the money as it is tax I owe. I obviously feel very strongly that I should not be expected to compensate for mistakes made by other individuals or organisations. As no-one can explain what I could or should have done differently, I'm finding it hard to accept that any mistake was made by me.

 

Does anyone have any experience of this, or advice?

[slick132]

Hi Molly,

 

Can you please confirm :-

 

1. During the 2 tax years 2014/15 and 2015/16, were you employed by just one employer between 6/4/14 to 5/4/16. If not, please give brief details .

 

2. What tax code was shown as operating on the first payslip after 6/4/14.

 

3. Did this tax code change at all during 2014/15.

 

4. What tax code was shown as operating on the first payslip after 6/4/15.

 

5. Did this tax code change at all during 2015/16.

 

6. What's your line of work (brief details will do).

 

Generally speaking, you should stay OFF the phone and deal with HMRC in writing only. On the phone, they can tell you almost anything to fob you off with no consequences to them.

 

Keep it in writing only so you have a clear papertrail of all exchanges.

 

[mollywobbles]

Thanks for your reply... In answer to your points:

 

1./6. I was employed by two employers concurrently during this period. I teach English as a foreign language on sessional contracts, and this is typical for me and in my industry. Both employers were aware of the other and so was HMRC. I contacted them to ask what would happen about my personal allowance, and was told to assign this to the main / higher paying employer.

 

2./3. I started work for employer 1 in May '14. Tax code 0T. It stayed as this all year. I started work for employer 2 in July '14. Tax code 994L M. This changed to 1000L in September '14. At the time, I was earning more from employer 2, so IIRC, this is why I received my personal allowance through that code.

 

NB to complicate things further, there was another employer for the first few months of 2014-15, which used the code 1000L.

 

4./5. In 2015-16, employer 1's tax code changed to 405T Cumulative, and stayed at that all year. Employer 2's code was 1060L. I only worked for this employer for half the tax year. From then until the present, I remained employed by employer 1 only.

 

Good advice about keeping things in writing. In all similar matters, I would normally insist as much. I don't know why I thought that somehow HMRC would be more honest / helpful than banks / utilities / DCAs etc because clearly that was fantasy on my part! They apparently didn't get my first letter. I will resend it with an update, anything you think I should be sure to include? Thanks in advance.

[slick132]

Hi Molly and thanks for the info.

 

Hold off before re-sending any letter. If/when you DO send one, get a free Cert of Posting at the PO as proof of posting.

 

Having multiple employers or sources of income is always a recipe for tax underpay'ts. Even if each employer is aware of the other, that does NOT enable them to operate any tax code other than the one allowed by, or notified to them by, HMRC.

 

I Have no idea why an employer would use a temporary NI No. but this may just be an excuse from HMRC.

 

We also need more info about when HMRC made refunds to you for each year.

 

1. Were you aware that a temp NI No. was used by an employer. Payslips should confirm if this was the case, whether you were aware or not.

 

2. You refer to refunds made by HMRC - when was the refund made for 2014/15 and was it defo by cheque.

 

3. Same Q for 2015/16.

 

[mollywobbles]

Thanks for your response.

 

1. No temporary NINs have been used, despite what HMRC repeatedly claimed yesterday. Every single payslip and all other documents state my normal NIN. I regularly check payslips and would have noticed this. I have checked yesterday and there is no evidence of this anywhere.

 

2/3. Refunds were definitely by cheque. Unfortunately, I don't think I'm able to say when exactly they were made. I have received them every year of my working life with very few exceptions so the 2014-15 and 2015-16 rebates were not out of the ordinary in my view. I simply banked the cheques and evidently didn't keep the accompanying letters. They were both quite a long way in to the following tax year though, as far as I remember.

[reallymadwoman]

http://www.taxvol.org.uk/about-tax/hmrc-error-esc-a19/

 

You might find this link useful.

[mollywobbles]

Yes, thank you. That makes for interesting reading. It's hard to know whether / how it applies to me but I shall certainly investigate further.

[slick132]

Hi Molly,

 

ESC A19 as linked above by RMW is not something HMRC agree to readily. It's been around for literally decades but they can often be dismissive about a claim for it's application to an underpayment.

 

I suggest you now write down exactly what you can recall the HMRC female told you about how a temp NI No. may have led to the underpayments. Above, you said, " ....... the error results from my having worked on a temporary national insurance number at a past employer and my accounts having been merged. "

 

Write it down now in case you need to rely on it later. Also record the time and date of the call, the phone number you called and anything else relevant. You may also need to send HMRC a SAR (costing £10) to get a copy of the recording. This may help you if you need to challenge HMRC's recent demands.

 

1. Did you complete tax returns for both of the tax years concerned.

 

2. Are you asked every year to complete a tax return.

 

3. Please also now tell us exactly what you can recall was said by your and HMRC in the latest tel con.

 

4. Roughly what did you earn gross in 2015/16.

 

Depending on your answers, you may have grounds to challenge the current demands, or not.

 

[mollywobbles]

Thanks again.

 

1. No

 

2. No

 

3. I said I was calling as a follow up to the letter which I sent in May.

They said it had not been received.

I recapped the situation, to my understanding, i.e. I had paid the tax I owed, been refunded apparently in error.

The operative said that 'she could see what had happened'.

 

I had allegedly been working on a temporary national insurance number and subsequently my 'accounts had been merged'.

She named the employer where this apparently happened.

 

I said I did not believe this to be the case.

I had on the table in front of me every payslip provided to me by that employer.

I checked them there and then, and they show, as I expected, my correct national insurance number.

 

I said I questioned it on a number of reasons.

Firstly, it was rather a long time (2 years) for 'temporary' paperwork,

to which she said people can work on these temporary NINs for years in some cases.

 

I said I provided the correct NIN on starting work and it shows on my payslips from that time.

She said all she could see was that a temporary NIN had been used.

 

I asked how I could be expected to know that, and she insinuated that I was lying, by saying that it would have been on my payslips which it is my responsibility to check.

She said I could also check my online tax account, which I pointed out was not in existence at the time.

 

I eventually forced her to concede that there was no way I could have known anything about a temporary NIN if it was not printed on any document provided to me.

 

I was advised that despite this, it was extremely unlikely that HMRC would agree to write off the tax which they refunded to me in error.

 

I was further advised to write in with my points, and send it recorded delivery this time.

The call was made on Tues 25th July AM.

 

4. Total gross pay over both employers in 2015-16 was c. £21k

[slick132]

Hi Molly,

 

I suspect that you probably DO owe the tax that was incorrectly repaid to you, due to the multiple sources of income.

 

However, I also suspect you were fobbed off or misinformed by the HMRC woman when you called them. The temp NI No. sounds like rubbish, for sure !

 

The tax statements or calculations for the 2 years are factual and should correctly show what you owed in tax and what you paid. So, taking into account the refunds made, it should show if you owe them more tax now for each year. But I can see no justification for HMRC repaying you (as they have always done in previous years) and then demanding the refunds back which would cause you financial hardship [if this is the case].

 

If you want to tackle HMRC on the basis that they should NOT have refunded you if you weren't due the refunds, we can help.

 

If you want to tackle them about this, first step is to send HMRC a SAR with the £10 fee saying you want a full SAR response and, in particular, recordings of the tel con you had with them on xx date at about xx time when you called this tel no. - 0xxx xxx xxxx.

 

What do you want to do ?

 

[mollywobbles]

Thanks so much for your help so far. I think I agree with everything. I most definitely want to tackle them on the basis that you suggest.

[slick132]

Then you need to send HMRC an SAR

 

PAYE and Self Assessment Complaints

HM Revenue and Customs

BX9 1AB

United Kingdom

 

There are examples here - http://www.consumeractiongroup.co.uk/forum/forumdisplay.php?404-Data-Protection

 

You should specify that you require the recording of the phone call at approx xxtime on xxdate.

 

[mollywobbles]

I will get on that this week. How long do they have to make a response, and what should my next step be after receiving it? Also, should I re-send the letter they claim they never received in the meantime?

 

Many thanks

[slick132]

Hi Molly,

 

At this stage, I suggest you just send the SAR seeking general info and the specific phone call as discussed above. They have 40 days to reply to you.

 

Once you get their reply, we can suggest your next best move.

 

[mollywobbles]

I've done this today. I'll keep you posted! Thanks so much for your help so far.

[mollywobbles]

Well, I never got a response and the cheque was never cashed.

 

I got a proof of posting when sending off the SAR. Stupidly, I have no idea where I put it now.

 

I suppose I have got no choice but to start the process all over?

[slick132]

Hi MW,

 

No, the Proof of Posting may be missing but you know when you sent the SAR off, I'm sure. Look for the original proof but don't worry about it for now.

 

So you now need to send the following letter to HMRC but, this time, use RM Signed For delivery (and keep this safely) :-

 

Dear sir or madam,

 

On xxdate, I sent you a formal Subject Access Request with the required fee of £10 and I have proof of postage. To date I have received no acknowledgement or response despite your obligation to reply within 40 days.

 

For ease of reference, I now enclose a copy of the original SAR.

 

In view of the delay that has already occurred, I would now like a full response within 14 days, failing which I will make formal complaints.

 

Yours faithfully,

 

[mollywobbles]

I was all ready to do as you suggest, when today arrives a letter.

They received my SAR (dated August 3rd) and have apparently performed 'security checks' which have raised some discrepancies.

 

I must fill in a form with my address / previous addresses and return it.

Obviously I can do so, but why would this be?

 

I moved this summer, and on the call mentioned above, provided an update of my address.

Their letter was dated 28th September, so 8 days ago, and two weeks beyond the 40 days they should have had to respond.

Is the best thing to do just respond to their request and wait for their full response?

 

On a separate note,

I am thinking about making a FOI request for the calculation they use to determine whether what they deem to be a tax underpayment can be collected through PAYE.

 

I was told (in writing) earlier this year that my earnings did not allow for them to do that (stat. mat. pay, so unsurprising!).

Is that the best way to get hold of that information?

[slick132]

Hi MW,

 

Reply giving the info they want to help you satisfy that you are you !

 

Forget the FOI request for now - wait and see what they send in reply to the SAR.

 

When you send back the info they want, do so using this letter :-

 

Dear sir or madam,

 

I refer to your letter of xxdate and return the forms with the data you wanted for ID purposes.

 

My original SAR was dated xxdate and you have already failed to meet the 40 day deadline. Accordingly, i now expect your full response to be sent to me within 14 days, failing which formal complaints will be raised.

 

Yours faithfully,

 

[mollywobbles]

Have sent this off today. Will see what they say!

[mollywobbles]

Right. Still nothing from HMRC. No acknowledgement, certainly no response to my request. They still haven't cashed my cheque.

 

I have threatened formal complaints, as suggested above, so now I need to follow through with that. How should I go about this?

[slick132]

Use the normal reference to your NI Number and your UTR on a letter saying :-

 

Dear sir or madam,

 

You have failed to respond properly within the required time to my formal SAR sent on xxth August.

 

You have failed to respond to my reminder sent on xxth October which enclosed information you apparently needed to prove my ID.

 

You have failed to encash the £10 cheque I sent for the SAR.

 

Accordingly I will now escalate my complaint to The ICO and/or my MP and/or The Ombudsman.

 

Even if you could not meet the deadline, you could at least have acknowledged my letters and given a reasonable date by which you would reply.

 

Yours faithfully,

 

Send to the Bristol address and, in the meantime, research to see what other useful addresses or bodies you can complain to.

 

If you think back, are you certain HMRC referred to temporary NI No. as opposed to a temporary Tax Code. The latter would make a whole lot more sense.

 

 

[mollywobbles]

I am as certain as I can be without the recording that they have failed to provide.

 

I remember looking at the payslips in question and reading off the National Insurance number from them, and pointing out that it was the same as that on other documents, so I am pretty certain I was not mistaken.

 

It seems highly likely that THEY made that mistake?

 

I shall begin the research you suggest today. Which Ombudsman do you refer to?

 

Thanks again.

[slick132]

As well as complaining to the ICO re the failure to comply with SAR request on time, a complaint can be made to the Parliamentary Ombudsman.

 

You can also complain to your MP.

 

I suspect the request by them for data (your post #18) was a means of "dealing" with your complaint temporarily. This helps with their stats re "post outstanding" (letters or complaints not yet dealt with).

 

[mollywobbles]

This frustrating saga drags on and on.

 

HMRC eventually wrote back and sent me a stack of print outs.

Despite the fact that I specifically asked for a recording of the conversation we had, this was not forthcoming.

What I received was a computer print out of my national insurance record.

This leaves me no further on.

 

I am really worried that the new tax year is approaching, that they are going to do something to my tax code which is going to leave me potentially hundreds of pounds a month worse off which I really cannot afford.

 

Added to this, I am now expecting another baby and so further maternity leave will probably complicate things further.

 

What can I do about all of this? I'm feeling demoralised about the whole thing.