People will be receiving their brown HMRC envelopes today stating whether they owe the tax man more money after the tax code c*ck up - would be interested to hear what people plan to do - pay up or as the newspapers are suggesting fight the tax man.
Makes me sick to think that hard working people are being stung yet again while benefits cheats get thousands of pounds a month.
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Disappointing that a mistake like this can happen. Could really affect some people.
It's not like they are asking you to pay more just because they feel like it, whatever the reason behind the original underpayment.
Benefit cheating is a considered, calculated action. People on PAYE have little or no say in what is deducted from their wages usually and thus are acting in good faith. They have the right to think that the correct deductions have been made.
HMRC want to have their cake and eat it. YOU make a mistake on your tax return, even genuinely, and potentially you are open to being charged interest plus an additional penalty of up to 100% of the underdeclared tax.
THEY make a mistake nothing happens to them, you are offered no compensation and the big stick is waved to make you pay up.
I'm all for people paying what they should in tax, NI etc but the double standards are frankly sickening in a supposedly free society.
but if they have issued with the wrong coding notice and you have underpaid because of it then it is hardly your fault. As with most people your employers get a tax code notice for you too and pay your tax accordingly. People who have underpaid should be allowed to repay it through their tax code over the next ten years so as not to cause anyone unnecessary hardship. If the taxman doesn't like it then they shouldn't cock it up in the first place.
My guess, and I stress guess, is that a lot of this is down to coding errors.
For example if you have a "benefit in kind" ( a company car or private health insurance being two common ones) your tax code should be lower than the normal personal allowance code. There is a form called a P11D on which benefits in kind are disclosed by employers. I suspect HMRC have done a "matching" exercise and come up with these errors. My reason for surmising this is that I was sent the wrong tax code and I know of other examples too.
Really? Hows you come to that conclusion?
Just like if you overpaid someone, you have 6 years to get it back.
Legally, the tax man is fine here but with the current financial situation and the hardships already faced by many families, is this really the right option for HMRC to be taking, surely a long series of instalments would be much easier on the pockets of those affected.
He should pay although I think he should be given time to pay and it be spread over a period of time.
unconsionable???????
isn't this the problem though, that he has been sent the wrong tax code by the tax man so not his fault.
Lenn: I did not imply that you were a benefit cheat if you had underpaid thus far. I stated that if you received a letter notifying you of your under payment and then did not pay, you became a benefit cheat because, exactly as you stated, you have made a calculated decision, in full knowledge of the facts. To not pay.
Also Large, I did not imply it was the individual's fault. I clearly stated "whatever the reason behind the original underpayment" accepting that in this case it is the HMRC's fault.
Lets not forget that if you over pay then HMRC do refund you so Uncles argument is not relevant.
And the other thing to remember is that tax on earnings is one of the fairer tax systems - I agree with Redman that you should be expected to pay back, as I said before it's an underpayment so you are only having to pay what you should have paid in the first place.
Could be wrong and I'm not quite sad enough to look it up but I always read it to mean a unreasonable decision taken without really caring if it's fair or not.
Personally, the timing of all this stinks. It's like someone somewhere has been sitting on this info for ages but has only decided to do this now just before the spending review is annouced i.e. "look at HMRC, aren't we good we've raised an extra £x billion in revenue, you can't afford to cut us back!".
In answer to the issue over whether it's cheating or not, the arguement that people are aware of what they should be paying and are therefore cheating if they didn't raise it before now would carry a lot more weight if you could understand your flipping P60 in the first place. I'm on PAYE but every year I seem to get a different outcome to my colleagues and no two people seem to get the same code around here, so hwo are you supposed to know you've been underpaying?
Surely with PAYE, it is only your own resposibility to pay the tax demanded,
But ......as Large says:
1) How many people actually understand their tax code?
2) How many people would actually know if their tax code is wrong?
And as Len says:
And then Harveys says:
Which is total rubbish. Because you will not be able to make a calculated decision not to pay ....any differential will either be taken direct by PAYE.
Or by demand that you pay by lump sum or instalment. And if you don't pay within their specified time limits, it will be deducted by PAYE anyway, or you'll be summonsed to court.
The one thing you cannot be is a benefit cheat.
Don't Pay!
Agree.
I doubt whether any senior official will be disciplined or fired over the PAYE episode but HMRC continue to let large corporations off of their tax liabilities. PAYE deducted staff (and companies) are easy prey for HMRC. If the Revenue, with all its (tax paid for) resources can't get it right, then how are individual taxpayers expected to?
I run a small business and the cost of servicing the Revenue's requirements is a real drain on my resources (not the tax itself, but dealing with HMRC and its incomptence).
As taxpayers we should be demanding more accountability from HMRC and the ministers responsible. Every letter that they send out for a demand or rebate costs taxpayers money. Who pays for their mistakes? Us, the taxpayer. It's a one way bet for these people. I work with people from across government and HMRC is in a league of its own for contempt for the taxpayer.
Haha ........That would come in handy!
Exactly, and how mant people actually realised that they were over/underpaying tax ? and more importantly, when they receive these letters, that the calculations are now right ?
Spot on, which just goes to show the nonsense that is this argument that it's in any way our fault.
If the answer to either question is "yes" then that will probably be why your code is different.
Just trying to save you some grief maybe by making a couple of suggestions.
Don't have private healthcare as a benefit either.