alcazar

iTrader: (2)

My eldest started at uni in Loughborough September 2012. He had worked full time for the previous two years, and was on jobseekers/part time work for one year before that.

He wrote to HMRC asking for a tax refund, having worked and paid full tax from 01 April until almost the end of September that year.

It took HMRC two months to write back telling him they needed sight of the printouts from the Benefits from when he was out of work. They even told him who to write to and what screen to ask to have printed out. But would/could THEY do it? Nope

So he wrote to the benefits people, who took six weeks to answer and sent the printout.

He then wrote again the HMRC and enclosed the requested printout.

And lo and behold, today, another six weeks later, they respond: he isn't due any tax refund because...get this....the amount he would have been due is EXACTLY cancelled out by an underpayment from a previous year

How can that be? He ALWAYS paid tax by PAYE, they have never said anything about an underpayment before, how is that possible?
In fact he OVERPAID one year due to them having put him on an emergency code.
And how fishy is it that it EXACTLY cancels out what he would have been owed?
they don't give any details of what year he underpaid, when, how, or how much. Just that it cancels out what he is owed.

Anyone any idea what to do now?

andy97

iTrader: (1)

You need to gather all your information from each employer/ benefits. What he earned and tax paid, then you can have an argument

Abx

iTrader: (15)

I'm a payroll manager and have been for 20 years, if you want send me his gross paye income for each year in question and I'll let you know the tax payable so you can work out if what he paid is correct, I'll base it on a standard tax code for someone with no benefits, healthcare, critical illness cover etc.

alcazar

iTrader: (2)

Thanks, I'll speak to him and see if we have the records.

Meanwhile, we are going to write back to HMRC and ask them when, HOW and how much, he underpaid.

If he has always paid tax via PAYE, HOW can he have underpaid, it doesn't make sense?

dsmith

Paye for part years can in accurate - as your earnings and tax allowances will be assumed to be spread evenly. If you only work for part of the year the tax paid can easily be wrong. You cant assume the company operating the PAYE scheme knew everyting about past or future circumstances.

Its his responsibility to ensure the correct tax is paid.

alcazar

iTrader: (2)

Yes, we understand that.

My point is that the previous year was a full year. the one before that was working from December, Jobseekers before that, he did get SOME tax back that year due to overpayment when they put him on an emergency code for ages, despite his having a full-time job.
But this year, he has worked since April to end of September, paying FULL tax, so SHOULD be due some back now?

Abx

iTrader: (15)

The main prob with paye is that hmrc always have to base it on the previous years earnings, now if you earn 150k in 09/10 put 20k into a pension and have a company car then these are reported on p60 and p11d in June 2010, hmrc will issue a code in about Sept 2010 based on that info and tax 10/11 assuming the same, assuming then that you now have a job in tesco stacking shelves on minimum wage then unless you tell hmrc of the change in circumstances then they will tax you and base your tax code on 09/10 figures.

You mention he was also on job seekers, now he would have been issued a p45 when that finished, dependent on what happened after that and how long before he got a job and code operated may have an effect.

Finally don't get hung up on the term emergency tax code, assuming he's a young lad and not getting huge non payroll benefits then he would probably actually be on what many call the emergency tax code, all it means is he gets the standard tax free per annum and does not have benefits like bupa, the code to worry about would be 0T.

Current tax code for 12/13 is 810L giving you £8100 tax free per annum.

One more thing, hmrc would never give a tax refund before the tax year ends in April as they or your son cannot guarantee he will not earn any £'s between Sept and then, we still have 2 more tax months before end of year which is another £900 or so tax free which he is entitled too.

See what he can find and let me know, hmrc also have an iPhone app now which can be quite good, just be careful though with some online tools as they can be quite miss leading.

Cheers
A

alcazar

iTrader: (2)

Thanks for all replies.
he is going to write back and ask for details of WHEN he is supposed to have underpaid, by how much and HOW it happened.

chocolate_o_brian

iTrader: (22)

Jeff, my younger brother has got himself into full time work after being on JSA since April last year. He's currently paying 'normal' tax and was told by HMRC that come April he will get a substantial rebate. It seems back to front as they know he only received £2,000 or so in JSA and being on little more than NMW he'll hit no thresholds for tax. But they also said his hours aren't guaranteed, ie overtime could bump his wages. So he was simply told check back in April with his figures and they'll rebate him accordingly.

Leslie

I would request full details and proof of the claimed underpayment.

Les

alcazar

iTrader: (2)

Letter sent doing just that.

Now we wait ANOTHER month or so for a reply......

alcazar

iTrader: (2)

Well, the saga changes course again. This morning he had a letter from HMRC, almost EXACTLY the same as his last one, except THIS one says they owed him £758, and included a cheque for that amount.

I honestly think they make it up as they go along.........

Any way, success.

Oldun

Great result.