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OK where do I start.
I returned to the UK in September 2005 after 5 years living overseas, during my time overseas I submitted SA tax returns each year demonstrating that no UK tax liability was owed.
On return to the UK I started full time employment with Sealed Air Ltd, they applied an emergency tax code for the remainder of 2005-2006. I have a number of benifits with my job and my company issued a P11D on my behalf, I completed my 05-06 tax return on line and I received a small rebate at the end of the tax year.
Unfortunatly HMRC did not use the information supplied when setting my tax code for 2006-2007, when I made my SA tax return in 2007 I found out that there was an under accrual of £3500. I informed HMRC and was shocked to find that a mistake had been made.
At this point I entered into the dispute procedure as I felt that the situation was unfair, unfortunatly to compound the issue HMRC again set the wrong tax code for 07-08. Because I had a promotion in April of 2007 I wrongly assumed that the exta money in my pay pack was to my salary increase, and not because of under accrual.
By January of 2008 I again realised that another underpayment had been made. At the same time I was informed that I could move from SA to PAYE.
The underpayment for 2007-2008 was £3132.
In the tax year 2008-2009 my tax code was changed to help pay back £2472 of the outstanding monies from 2007-2007,dispite the fact that the money was owed under SA. the balance of £660 will be collected in 2010-2011.
During the last 3 years I have attempted to demonstrate to HMRC that the under payment of tax was as a result of errors on their part. They conceed that my employer and myself have provided all info on time and in full, but they are still demanding that I pay.
My view is that I have paid the lions share of the money owed, they are charging me interest because of their mistakes, I would like them to clear the remainder of the owed money.
By the way I did ask what would be the minimum they would accept as payment, they told me that I shouldake an offer, my offer was that they would write off the remainder of the wed money.
I can scan and send you all of the corrispondance if it helps.
I plan to go to the Adjudicator next as I think I have a case, what do you think??
All benefits were available when I started employemnt, Car, Fuel Card (including private miles) and BUPA.
I assume that my employer completed a P46 although I am not 100% sure.
The same benefits were available in 2006/07 & 2007/08, P11D's were submitted by my employer.
Once I realised that there was a problem I contacted my tax office to find out what was wrong. It was they that realised that I was on the wrong tax code. I did not officially ask for a new code to be generated, I guessed that this would be automatic once the mistake had been registered.
FYI - in the letter I received today from HMRC they have stated that at the begining of 2008-09 my PAYE code was adjusted to include my taxable benefits "but inexplicably removed them on 26th Aug 2008. fortunatly my employer recognised the mistake and did not use the code of 603L".
What a fiasco, regardless of how often I communicate with them, they continue to make mistakes. I agree that the onus is on the tax payer to make sure all is in order, but come on how many times must I check their work??
what about the interest that is being accrued, I can not stop this. It has been suggested that I pay the outstanding ammount, and claim it back at a later date? I think once I pay I will never see it again.
Another point, is it legal to collect tax via PAYE to cover SA liability. The £3k that has been collected without my consent could be gaining interest in my bank as we speak??