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Sam, Accountant
Category: UK Tax
Satisfied Customers: 13817
Experience:  26 HMRC expertise, PAYE, Self Assessment ,Residency, Capital Gains, CIS ask for Sam Tax
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HMRC have sent me tax calculations showing underpaid tax from

Customer Question

HMRC have sent me tax calculations showing underpaid tax from 2007-08 under PAYE. As they used wrong employment benefits amount which they updated later based on my employers sending the p11d. They must have received the P11d by July 2008 from employer. They didn't write to me until 2011 with tax calculation. I had no idea until I received the calculation as thought all is in order through PAYE. They should have acted on info they had earlier. It is unfair to suddenly ask for a lump sum out of blue because they ddint use the info / adjust tax code.
They have now sent me a tax return for that 2007-08, so they can collect it that way. There is a deadline to filling it. Can they send me a tax return going back though I didn't qualify for one at that year? Also, isn't there a time limit as to being legally obliged to keep paperwork, that I would need to be able to fill a return for so many years back? Please advise on what to do. Have written to them re esc19 and no response so far. By completing the return, I will make myself liable to pay, right? If I don't I risk penalties, etc. Also, what if I don't hear from them re esc 19 until my deadline of paying (same as filling the return) is up. It is a big financial burden for me to face an unexpected bill from 2007-08, through no fault from my side.
Submitted: 5 years ago.
Category: UK Tax
Expert:  Sam replied 5 years ago.




Thanks for your question


Sadly you have no grounds to appeal under ESC A19 as you did not contact HMRC regarding your tax position, for them then to fail to act.

Its true that they failed to work the P11d sent to them by July 2008, but this in itself are not sufficient grounds to appeal.


When you received your P60 and P11d did you not query why the company benefits differed ? Please advise whether you took any action at all regarding these company benefits.


HMRC can now ask for the tax return to be completed, as it may be there are further considerations, however, have they advised why you now need to complete a self assessment tax return, due to the fact they have already issued a P800 calculation? Are you a higher rate taxpayer (the income and the benefits in excess of £39825 for the year) as this may be the reason.


Getting tax is a three way responsibility, yours, the employer and HMRC, and it would seem that both you failed to act, HMRC just failed to act as soon as they could have and you did nothing to query the position. And as you quite rightly say it is unfair, but this again is not grounds for appeal.


However I would try and establish when the employer sent in the P11d , was it on time, did you have a company car, did the employer advise HMRC that you had this company car, from the start, or did you have a change of company car during 2007/2008 that the employer failed to advise HMRC on... I am trying to see if there are grounds to hold the employer liable for the tax bill.








Customer: replied 5 years ago.
Hi Sam - you are actually not correct about ESC19. As the guidance on HMRC official website clearly says it applies if they have failed to use relevant information on time. It lists type of information (includes employment benefits forms) and states that the information could have come from you, your agent, your employer or Dep of Work and Pensions.
Expert:  Sam replied 5 years ago.



Thanks for your response


I have seen through my 26 years with HMRC, and my last 3 years as an accountant ESC A19 refused time and time again on this basis,


By all means appeal on this basis, but your appeal will not be upheld, as you failed to do anything, and I wouldnt rain on your parade if I thought you had even a small chance of getting this appeal heard and upheld.


And as 2008/2009 seems to be fine - then they DID make use of the information to act on the next years code, so this further diminishes any appeal.


I shall opt out, and see if one of the other experts will help you,as I have seen cases at tribunal level fail on this situation - at additional cost to the individual being given false hope.










Customer: replied 5 years ago.
Hi Sam - thanks for the response.

1. The information relates to a car benefit. Meaning I was given a company car in that tax year. The cars themsleves changed. Was given one till lease ran out / they replaced it with another if I remember right. It is an in kind benefit. The company then provides a cash equivalent value to HMRC to be included as part of benefits. They use various info not readily available to me at a time (including emissions rating, etc) to calculate that. So I trusted my company, a reputable company, to do this. There was a tax code notice I had received that did show a car benefit so that was the level of check I could reasonably be expected to do. It also said that this is based on info provided by employer and that HMRC will check again by end year and let me know if anything changes. So what was I to do on top of that? I had no reason to think any action is needed. Employer was then obliged to send p11d, which they did. Would employer have any liability for giving different car benefit calculation during tax year (used in tax code) and then a different one in p11d? I don't know about the timing of their exact communication during tax year either, whether for example they might have delayed declaring the car or change of cars. But this doesn't remove the fact that HMRC did have the revised /final amount of car benefit from employer as part of p11d. Am trying to find out when exactly when was it sent / received.

2. What you say about esc 19 seems to be in contradiction with their own guidance and rules posted publicly on HMRC website, which state that information can come from employer and count as information that HMRC should have acted upon. Also, the second provision of esc a19 qualifying criteria is to have believed your affairs were in order until receipt of the tax calculation. So, it is only reasonable and logical that you have not have been in touch with them yourself until receipt of the tax calculation as you believed things were in order and that they had all necessary information.

3. Different circumstances relate to and there is nothing to show that they did act on the information in 2008-09. Perhaps you can clarify this point?

It seems very unjust to ask an individual tax payer (under PAYE scheme) to bear the costs of the mistakes and delays by a corporate employer and HMRC. And tell them to do that 3-4 years down the line. It is a 3 way process but where is the proportionality? There was a lot of publicity about the HMRC system mistakes and these late tax calculations a while back and thankfully some citizens have been able to defend themselves. I am looking for some helpful advice.
Expert:  Lindie-mod replied 5 years ago.
Hi, I’m a moderator for this topic and I wonder whether you’re still waiting for an answer. If you are, please let me know and I will do my best to find an Expert to assist you right away. If not, feel free to let me know and I will cancel this question for you. Thank you!

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