Underpaid tax demands/claw back

Hi,

You will all have read recently of the intent to give tax rebates to those who have paid too much tax and the claw back in the region of £1450 for those who have underpaid.

In March 2009, I received a letter from HMRC, Cardiff Office, informing me that they considered I had underpaid income tax on my pensions and that I need not do anything about it as they intended to recover the underpaid tax during the tax year 2009/2010.

The error was apparently the result of the failure to adjust my service pensions tax codes when I became entitled to a state pension on my 65th birthday on 28th March 2007. The letter,however, went on to inform me that they did not intend to collect any underpaid tax that should have been paid before April 2009. I was further informed that I need not do anything at that point as underpaid tax deductions would be calculated and recovery would occur during the tax year 2009/2010 - I never heard from them again and considered the matter closed, but annoyed!

On 30th June 2010, I received a document from the same HMRC Cardiff office that I had underpaid tax for the years 2007/2008, 2008/2009, 2009/2010 to the tune of £1186.94p and this would be recovered during the tax year 2011/2012 - this works out at about £98+ per month which, as a pensioner whose only income is my pensions, quite annoys me - the coalition are pioneering ahead to hammer pensioners in respect of bus passes, winter allowances etc and now I have this to contend with.

My local Citizens Advice Bureau have advised me that a statement was made in parliament regarding the recovery of underpaid taxes as follows: "Action should be taken within 12 months of the tax year where underpayment was identified" - in my case, I received my intitial letter in March 2009 and expected recovery to have taken place during that tax year.

The CAB also go on to say that there is an appeal procedure for an Extra Statutatory Concession, also known as ESC A19 and that anyone who was alerted by, or themselves alerted HMRC, of any irregularities prior to the tax year 2009/2010 may have a case under this clause.

I'm taking my case to my local MP if ony to express my annoyance that, having notified the HMRC of my pension details in mid 2008, the case is still ongoing.

Any other forum members affected yet? If so, would welcome any advice you may be able to offer. Indeed, would welcome any advice from budding tax inspector members of the forum.

Speak to you soon.

Gerry
This is an excellent thread to have started but I would like to take an opportunity to correct some of your assumptions and statements.
As you correctly show these under-payments and indeed over-payments were all undertaken wilth Gordon Brown's Labour Government in-charge and remember he promised that we had seen the end of "Boom and Bust" and it was his tenure at the Treasury that saw this slip-shod tax collection programme implimented so leveling blame etc at the feet of the coalition is incorrect and not applicable.

Although from the tone of the thread you quite clearly feel that a Member of Parliament who is a Liberal Democrat will not provided you with the answers you require let me assure you now that having known Lorely Burt for many years she will fight your corner tooth and nail whether she's in government or not she's no YES person believe me.

Finally, CAB are absolutely correct in the information they've given you. Your case is a strong one from the info you've given and I do urge all forum members who are in this difficult predicament to use CAB's services to their fullest extent.

Hingey

p.s. Yes I'm an elected L/D politician who will take informed criticism on the chin but will defend good practise by fellow politicians to the bitter end.

I agree with Hingey. I too was informed last year that I had underpaid tax though still have no explanation as to how and why! To lay the blame either directly or indirectly at the new government whether at fault or being lacking in sensitivity is frankly a joke. When will Labourites finally admit that their party failed in more places than they achieved. Their new leader is at least admitting it, much to the disdain of the previous Government including his own brother! I suspect he will not lead the party for very long for he is far too honest for his own good. I will pursue the matter of my tax only to find out if it is actually correct ie a breakdown, and then I will freely cough up. If the tax is owed, it is owed. We all know our allowances and we are all long enough in the tooth to know, that if we are not paying what we should, it will bite us on the backside eventually.

Quote:

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Originally Posted by Paul Hinge

Gerry
This is an excellent thread to have started but I would like to take an opportunity to correct some of your assumptions and statements.
As you correctly show these under-payments and indeed over-payments were all undertaken wilth Gordon Brown's Labour Government in-charge and remember he promised that we had seen the end of "Boom and Bust" and it was his tenure at the Treasury that saw this slip-shod tax collection programme implimented so leveling blame etc at the feet of the coalition is incorrect and not applicable.

Although from the tone of the thread you quite clearly feel that a Member of Parliament who is a Liberal Democrat will not provided you with the answers you require let me assure you now that having known Lorely Burt for many years she will fight your corner tooth and nail whether she's in government or not she's no YES person believe me.

Finally, CAB are absolutely correct in the information they've given you. Your case is a strong one from the info you've given and I do urge all forum members who are in this difficult predicament to use CAB's services to their fullest extent.

Hingey

p.s. Yes I'm an elected L/D politician who will take informed criticism on the chin but will defend good practise by fellow politicians to the bitter end.

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Hingey,

I do know where the blame lies for the fiasco at HMRC and what does annoy me is, having notified HMRC of all my pension details in mid 2008, assured in March 2009 that it would be sorted out during tax year 2009/2010, it's still ongoing - it's their incompetence that resulted in me being a debtor

Re Lorely Burt. I do know her and have dealt with her in the past on a Shirley RBL matter where she did do the business for the Club. I realise I was probably unfair in my previous statement, and have amended the post accordingly. Indeed, I did vote for her at the last General Election. She is an effective Politician and quite a popular lady - hence her re-election!

Speak to you soon.

Quote:

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Originally Posted by Gwyn Nicholas

I agree with Hingey. I too was informed last year that I had underpaid tax though still have no explanation as to how and why! To lay the blame either directly or indirectly at the new government whether at fault or being lacking in sensitivity is frankly a joke. When will Labourites finally admit that their party failed in more places than they achieved. Their new leader is at least admitting it, much to the disdain of the previous Government including his own brother! I suspect he will not lead the party for very long for he is far too honest for his own good. I will pursue the matter of my tax only to find out if it is actually correct ie a breakdown, and then I will freely cough up. If the tax is owed, it is owed. We all know our allowances and we are all long enough in the tooth to know, that if we are not paying what we should, it will bite us on the backside eventually.

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Gwyn,

As in my post to Hingey, I know where the blame lies for this mess and in no way placing any blame on the coalition.

I also agree that we all have a duty to cough up and pay our way. This, however, is a democratic obligation and not just for those who honestly face up to their commitment. It's just a shame there isn't a bit more emphasis on where the cleaning up and claw back process begins such as the corridors of Westminster, those with offshore tax havens, dodgy accountants plus the general fraudulent tax evasion that has been allowed to occur as identified by the media! Megabucks are owed here compared to my little drop in the ocean. However, I am also aware that all these little drops in the ocean contribute to the Billions that are owed.

Incidentally, I didn't start this thread to apportion blame on any particular party or to enter into any political dialogue - this would be against forum policy! I was only inquisitive as to whether any other forum members had received similar correspondence, what their reactions were, action taken and what, if any, advice was on offer.

Speak to you soon.

Gerry, I assure you I was not having a pop at you as an individual but rather at your lack of expectancy from a Lib-Dem coalition politician ( I know that you have now ammended that). This is not the first time I had heard the same comment and it always has the same ring. Shoot the messenger and forget the originator. You are right of course about catching the big fish and I believe a few millionaires are being investigated right now according to some news. This also rings a bell with the infamous CSA where the honest little fish paid his dues and got hammered whilst those who do not fulfil their obligations got away with it. The fact is the more honest you are in this country, ie fill in your forms cross the t's dot the i's, the easier target you are.

As for the winter fuel allowance, I understood that the coalition were raising the age from 60 to 66 to qualify. 60 year olds are not pensioners and indeed most of them are still working unless of course they have private incomes/pensions etc. Do they need the allowance if they are out working all day and recieving a wage. My personal view is that the fuel/heating allowance, bus passes, as well as all other benefits (not just the ones that affect the Aged) should be reserved for those who really need them. That after all is what our system is supposed to represent and if it is to continue, it needs radical change.

Gwyn,

Whilst I agree, and disagree, with some of your views (that's politics), I don't want this thread to lose it's way and would like to keep to the subject of Underpaid Tax Demands/Claw Back, as an affected party, and canvas the views of any affected forum members - I'm sure there will be plenty of "Political Agenda" to debate on the forum, on the points that you have raised, after the Chancellor's announcement next month!!.

In the meantime, thanks for your valid comments to date.

Speak to you soon.

Gerry,

As I said in my post, I am an affected party and therefore gave my views. Your original post made it a discussion/debatable point In my view. Anyway to stay with the subject as an "affected party", this very morning (no duff), I recieved another tax code change from Xafinty paymaster giving me a £59 Tax refund. This is some 3/4 months after being told that I had underpaid Tax for last year (from the Tax office) and they had made an adjustment to retrieve it. No breakdown was given and I have tried to get through on the phone on a number of occasions to discuss the matter with no success (I gave up after 8 mins on hold on each occasion). Now, they are giving me money back, no explanation or breakdown and I'm sure that I have not heard the last of this debacle.

My respects as ever.
Nick

Quote:

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Originally Posted by Gwyn Nicholas

Gerry,

As I said in my post, I am an affected party and therefore gave my views. Your original post made it a discussion/debatable point In my view. Anyway to stay with the subject as an "affected party", this very morning (no duff), I recieved another tax code change from Xafinty paymaster giving me a £59 Tax refund. This is some 3/4 months after being told that I had underpaid Tax for last year (from the Tax office) and they had made an adjustment to retrieve it. No breakdown was given and I have tried to get through on the phone on a number of occasions to discuss the matter with no success (I gave up after 8 mins on hold on each occasion). Now, they are giving me money back, no explanation or breakdown and I'm sure that I have not heard the last of this debacle.

My respects as ever.

Nick

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You jammy sod, well done!! Any contact numbers?

I agree Gerry, he is a jammy sod, lol.

Last yer my tax for pension and my work tax we up all because of me having a company med policy. Now that I have changed company, maybe I will get something back, I doubt it though.

Further to my earlier post in September above, " i'm sure I have not heard the last of this debacle" I have recieved another letter from the Inland Revenue with a statement saying that I have still overpaid tax and given me another rebate of £152. That is now two rebates after being told that I owed them money. Really lads do not take it as read when these guys come up with their figures, check it out every time. I know you may think "be happy you got money back", but I think I will hold on to it ready for the next letter asking for it back.

Quote:

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Originally Posted by Gwyn Nicholas

Further to my earlier post in September above, " i'm sure I have not heard the last of this debacle" I have recieved another letter from the Inland Revenue with a statement saying that I have still overpaid tax and given me another rebate of £152. That is now two rebates after being told that I owed them money. Really lads do not take it as read when these guys come up with their figures, check it out every time. I know you may think "be happy you got money back", but I think I will hold on to it ready for the next letter asking for it back.

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Wise move Gwyn!

Just a note in the margin:

HMRC recently handed Vodafone a tax deal relieving it of tax liability to the tune of some 6.5 billion pounds, with the assurance that profits stashed in Luxemburg will not be taxed in future. Obviously someone will have to pay for that.

It's the poor wot gets the blame....

John

Hi,

Yesterday I received a letter from my local Lib Dem MP, Ms Lorely Burt who has been acting for me ref the request by HMRC for the amount of £1186 underpaid tax during period 2007 - 2009 (identified in the opening thread on this subject). The following is an extract from the opening paragraph of her letter:

"I have now received a response from the Complaints Manager at HMRC and delighted to hear that they have found the A19 Extra Statutory Concession to apply in your case and the request for underpaid tax of some £1186 has now been written off as a result of the information provided by Xafinity Paymaster, your pension provider."

Just goes to show that it sometimes pays off to challenge some of the extraordinary demands made upon us by Government Agencies.

Indeed, HMRC have been quite popular in our household this week, for a change, as on Monday my wife had a tax rebate for £277.

Speak to you soon.