Tax Errors

[Woody1985]

http://www.bbc.co.uk/news/uk-11186397

Anyone worried by this?

My understanding is that in the next tax year they will take amounts directly from your pay to retrieve up to £2,000 by the end of the following tax year. Any larger amounts will have separate payment agreements.

What I'm not clear on is who is going to be affected. Is it likely to be self employed people or those with taxable benefits?

The average is £1,500 so that's a considerable amount each month out of peoples wages.

I'd love to be one of those who gets money back but I think it's unlikely based on my understanding that I'll be affected.

I believe that the IR should write these amounts off and pay back those over charged or take the amounts back over a much longer period, say 3 years.

What's going to happen to these people if they lose their job? I suspect they'll be hounded for it and face court actions.

[Removed]

I'm worried because I've always had problems with the revenue :grr:

I can't believe how they can continue to get it so wrong. Just remember the fiasco with the childrens tax credits. They miscalculate yet innocent people suffer who have received the money in good faith.

If you are an employer just try making wrong or late payments and watch them hit you with penalty payments. Total farce imo.:bitchy:

[matty_f]

http://www.bbc.co.uk/news/uk-11186397

Anyone worried by this?

My understanding is that in the next tax year they will take amounts directly from your pay to retrieve up to £2,000 by the end of the following tax year. Any larger amounts will have separate payment agreements.

What I'm not clear on is who is going to be affected. Is it likely to be self employed people or those with taxable benefits?

The average is £1,500 so that's a considerable amount each month out of peoples wages.

I'd love to be one of those who gets money back but I think it's unlikely based on my understanding that I'll be affected.

I believe that the IR should write these amounts off and pay back those over charged or take the amounts back over a much longer period, say 3 years.

What's going to happen to these people if they lose their job? I suspect they'll be hounded for it and face court actions.

They can seriously f*** right off IMHO. By all means give folk their money back that they've overpaid, but if people haven't made a mistake in what they've told them and have underpaid, then that's the Government's problem, not the individual's.

Your everyday person doesn't know the intricate workings of how they're taxed and what tax code they should be on. HMRC are supposed to be the experts on it. I wouldn't trust these buggers as far as I could throw them.

[Removed]

They can seriously f*** right off IMHO. By all means give folk their money back that they've overpaid, but if people haven't made a mistake in what they've told them and have underpaid, then that's the Government's problem, not the individual's.

Your everyday person doesn't know the intricate workings of how they're taxed and what tax code they should be on. HMRC are supposed to be the experts on it. I wouldn't trust these buggers as far as I could throw them.

Not how it works though Matty. I got bombarded with stuff about childrens tax credits when they started and though I thought our joint incomes would be over the limit I was "encouraged" to apply. I was a bit shocked when we got money, albeit the minimum but about £500 so worth it for just filling a form in, and I told the truth 100%. Same thing happened for the next couple of years and then out the blue I got a letter saying I shouldn't have had anything and a demand for well over £1000. Fairly threatening letters from what I can remember so even though I didn't have the cash spare I payed it to get them off my back. The galling thing is they are still writing to me to apply every year. Absolute idiots and it's a total disgrace :bitchy:

[Jay]

Not how it works though Matty. I got bombarded with stuff about childrens tax credits when they started and though I thought our joint incomes would be over the limit I was "encouraged" to apply. I was a bit shocked when we got money, albeit the minimum but about £500 so worth it for just filling a form in, and I told the truth 100%. Same thing happened for the next couple of years and then out the blue I got a letter saying I shouldn't have had anything and a demand for well over £1000. Fairly threatening letters from what I can remember so even though I didn't have the cash spare I payed it to get them off my back. The galling thing is they are still writing to me to apply every year. Absolute idiots and it's a total disgrace :bitchy:

I dont really understand tax credits but we applied when they first came out like everybody else and have had payments over the last few years. The payments were getting smaller each year and last year it was just over £20 per month. This year I said to my hubby that I wasn't going to send the form back as its more hassle than its worth and with this new government I was suspicious of us ending up owing them money.
A few weeks ago I got a letter saying as I didn't fill in the recent form they wanted £166 paid back to them :confused:
They said they would write to me to arrange payment - heard nothing so far but fully expect to.

[matty_f]

Not how it works though Matty. I got bombarded with stuff about childrens tax credits when they started and though I thought our joint incomes would be over the limit I was "encouraged" to apply. I was a bit shocked when we got money, albeit the minimum but about £500 so worth it for just filling a form in, and I told the truth 100%. Same thing happened for the next couple of years and then out the blue I got a letter saying I shouldn't have had anything and a demand for well over £1000. Fairly threatening letters from what I can remember so even though I didn't have the cash spare I payed it to get them off my back. The galling thing is they are still writing to me to apply every year. Absolute idiots and it's a total disgrace :bitchy:

I know it's not how it works Billy, we got stung the same and had to pay back about £1200 IIRC a while back.

Just saying that it should be how it works. They're the experts, we should be able to trust them to get it right, and when they do get it wrong it shouldn't have an adverse impact on your average Joe.

[Removed]

I know it's not how it works Billy, we got stung the same and had to pay back about £1200 IIRC a while back.

Just saying that it should be how it works. They're the experts, we should be able to trust them to get it right, and when they do get it wrong it shouldn't have an adverse impact on your average Joe.

:agree:

And I knew you knew :greengrin

[Pete]

Not how it works though Matty. I got bombarded with stuff about childrens tax credits when they started and though I thought our joint incomes would be over the limit I was "encouraged" to apply. I was a bit shocked when we got money, albeit the minimum but about £500 so worth it for just filling a form in, and I told the truth 100%. Same thing happened for the next couple of years and then out the blue I got a letter saying I shouldn't have had anything and a demand for well over £1000. Fairly threatening letters from what I can remember so even though I didn't have the cash spare I payed it to get them off my back. The galling thing is they are still writing to me to apply every year. Absolute idiots and it's a total disgrace :bitchy:

I think they're quite fair with things like child tax credit.

My income fluctuates big time and a year ago I was given a nice wee lump sum of a grand and a half! Deep down I knew I would have to pay it back but that week I went up to jenners and came home with a few Ted Baker shirts...that don't really fit me any more.
It was always in the back of my mind that I'd have to pay it back and I was prepared for this. However, they don't just ask for the whole lot back but they stagger your payments by reducing what you might be entiteled to the following year.
If you're overpaid they don't leave you up **** creek saying you have to hand it all back at once. They just give you slightly less than you're due and the work it out at next year. Pretty reasonable in my experiences.

As for the HMRC for self-employed. They are the biggest bunch of ****s going. Think yourself lucky you're pay as you earn.
If you're a little bit late with your "contribution to society" it gets passed to the "debt collection" wing where you get threatened with legal action after every sentence.
The reality is that they're understaffed and there's never been a better time to take the mick out HMRC. They can perform spot checks all they want but self-employed people aren't stupid any more.

I'd like one of these HMRC ***** to try the cabs for a week.

[Removed]

I think they're quite fair with things like child tax credit.

However, they don't just ask for the whole lot back but they stagger your payments by reducing what you might be entiteled to the following year.
If you're overpaid they don't leave you up **** creek saying you have to hand it all back at once. They just give you slightly less than you're due and the work it out at next year. Pretty reasonable in my experiences.



Peter, I wasn't getting a reduced payment the following year. They said I shouldn't have had anything even though they sent me the forms and they worked it out from what I put in from our P60s and our childcare payments etc :bitchy:

I did get a demand for the whole lot back in one go and it wasn't worth the hassle and stress fighting it

[Hibs Class]

They can seriously f*** right off IMHO. By all means give folk their money back that they've overpaid, but if people haven't made a mistake in what they've told them and have underpaid, then that's the Government's problem, not the individual's.

Your everyday person doesn't know the intricate workings of how they're taxed and what tax code they should be on. HMRC are supposed to be the experts on it. I wouldn't trust these buggers as far as I could throw them.


I read that they had considered writing the underpayments off, but they amounted to c.£2bn and so they decided that the state of the public finances meant they couldn't justify it. It does mean that repayment next year will be at the same time as many folk are coping with pay freezes, increasing mortgage payments and everyone will be paying more VAT.

[Beefster]

The tax system needs to be seriously simplified so that 'normal' folk can understand it. All this paying loads of tax and then being given it back through credits and so on is nonsense. Get lower paid taxpayers paying less tax in the first place and save a fortune on bureaucracy.

[RyeSloan]

The tax system needs to be seriously simplified so that 'normal' folk can understand it. All this paying loads of tax and then being given it back through credits and so on is nonsense. Get lower paid taxpayers paying less tax in the first place and save a fortune on bureaucracy.

Too true.

The Tax Credit sysem is the most expensive way of trying to bring 'fairness' to the tax system possible. The conceptof the govrnment trying or needing to keep track of millions of peoples individual circumstances then calculating a tax credit off the back of 'expected' income figures is frankly bizzare...I wonder what the cost of supporting this system is (not to mention the stress they cause when overpaying and then threatening to re-coup thousands from 'normal' people).

I simply don't understand why they don't just scrap tax credits and use the money to raise the lower rate of income tax. If you are not working or have kids there is already benefits in place that don't require the tx credit system so quite why we seem so detrermined to keep such an expensive and flawed system is beyond me....especially in the face of required efficiency savings, there is one right there...scrap the whole tax credit system and change one figure in the tax code ladder insead and there you go.

Rant over.

[Woody1985]

I read that they had considered writing the underpayments off, but they amounted to c.£2bn and so they decided that the state of the public finances meant they couldn't justify it. It does mean that repayment next year will be at the same time as many folk are coping with pay freezes, increasing mortgage payments and everyone will be paying more VAT.

They could come to sort of compromise such as only charging half the amount or giving a longer period, say they're term in office.

Unfortunately we'll probably get **** loads of labour spin on how terrible it is of the conlib government to ask for this money back when it was under the labour government that the problems occurred. A bit like the SNP getting the blame for the trams despite trying to block them and the other parties ganged up and voted them through.

Continually ****ing with public finance in petty point scoring games.

[Betty Boop]

You can appeal using the Extra Statutory Concession, there is a twelve month rule, providing you have provided HMRC with the correct information.

http://www.guardian.co.uk/money/2010/sep/06/unpaid-tax-written-off

[Andy74]

I don't think it would right of them to write it off where there has been undercharging.

At the end of the day it's each other that the cash will come from and it's unfair for people to have been charged correctly who will subsidise those who haven't been.

At the end of the day the money has been due and those who received more cash in their pay packets for the last year have done okay compared to those who didn't.

Mistakes like this are trrible and shouldn't happen and they are too complex for people to know they are paying the wrong thing but ultimately everyone shoudl end up paying what they should have been paying.

I say all that not knowing if I am involved one way or the other.

[Hibs Class]

HMRC are pretty ruthless in applying interest / penalties when tax payers get it wrong, or are late in filing returns, so some level of concession / compensation would seem to be only fair to those who have underpaid, as well as interest to those who have overpaid.

[IWasThere2016]

I expect a demand - and it is right I pay (assuming HMRC have calculated matters properly).

Beefster is correct - the tax system needs a complete overhaul. A few things I'd like to see

- higher tax codes say £10k - to remove more lower earners from tax.

- higher bands yet for those with kids under 18.

- a straight sales tax on all goods to replace VAT (a burden on businesses because of zero, exempt and standard rates IMHO and the administration)

- Savings and pension income should not be taxed

- greater tax relief on pension contributions

- straight line NIC contributions

[RyeSloan]

I expect a demand - and it is right I pay (assuming HMRC have calculated matters properly).

Beefster is correct - the tax system needs a complete overhaul. A few things I'd like to see

- higher tax codes say £10k - to remove more lower earners from tax.

- higher bands yet for those with kids under 18.

- a straight sales tax on all goods to replace VAT (a burden on businesses because of zero, exempt and standard rates IMHO and the administration)

- Savings and pension income should not be taxed

- greater tax relief on pension contributions

- straight line NIC contributions


Not sure on the costings of some of these although I agree on the basic tax rate (paid for by scrapping tax credits) and the sales tax. This actually would probably raise more than VAT because as you say VAT is notoriously difficult to quantify and collect. A element of sales tax could also be used to replace the council tax and block council grants which would simplify local government funding as well...

I thought pension contributions were essentially tax free or have I missed something here?

Also not sure about higher tax bands for those with kids..surely the 'family allowance' or whatever it is called these days is a direct benefit already being paid to people with children...also when parents split who would get the continued tax break and how would that be fair on the other who would still pay maintennce?
Not sure that savings income should be treated as tax free income however I do think there should be room for less taxations on pensions....

All in all a much more simplified tx system and steamlines benefit system would push up collection rates, reduce fraud and of course help prevent errors like thos vexing the OP....

[Woody1985]

I notice the government propaganda has started already. In the metro today with a statement along the lines of you will pay... or else. There's a net deficit of 200 million. No one noticed, no one cared. Write it off. Unless I'm due back some cash.:greengrin

[HibsMax]

Ahhhh, taxes. God love 'em. :wink:

The government seems to have very little tolerance for those with tax problems. I recall about 5 years ago that I was withholding too little for taxation purposes (my employer made a change to my pay cheque and I didn't notice for 6 months! - so it was ultimately "my fault"). To rectify the situation I had to pay double taxes for the last 6 months of the year, just to catch up. That was fun.

[IWasThere2016]

Not sure on the costings of some of these although I agree on the basic tax rate (paid for by scrapping tax credits) and the sales tax. This actually would probably raise more than VAT because as you say VAT is notoriously difficult to quantify and collect. A element of sales tax could also be used to replace the council tax and block council grants which would simplify local government funding as well...

I thought pension contributions were essentially tax free or have I missed something here?

Also not sure about higher tax bands for those with kids..surely the 'family allowance' or whatever it is called these days is a direct benefit already being paid to people with children...also when parents split who would get the continued tax break and how would that be fair on the other who would still pay maintennce?
Not sure that savings income should be treated as tax free income however I do think there should be room for less taxations on pensions....

All in all a much more simplified tx system and steamlines benefit system would push up collection rates, reduce fraud and of course help prevent errors like thos vexing the OP....

S - These were only some of the things I'd like to see - it's tax so there'd be bits I didnae like :greengrin

Re pensions - I said 'greater' and had in mind some incentive/motivation/reward for providing for one's future so perhaps as well as relief the government topped up pensions.

Of course the greater tax fraud is cash .. those in low level services with no receipting etc eg the car wash, the window cleaner, the independent cabbie?, the hairdresser, the tradesman doing a homer, indeed many sole traders have scope for evading the correct declaration of income and therefore payment of tax/NIC etc.

Cue the pelters :wink: :greengrin

[Mibbes Aye]

S - These were only some of the things I'd like to see - it's tax so there'd be bits I didnae like :greengrin

Re pensions - I said 'greater' and had in mind some incentive/motivation/reward for providing for one's future so perhaps as well as relief the government topped up pensions.

Of course the greater tax fraud is cash .. those in low level services with no receipting etc eg the car wash, the window cleaner, the independent cabbie?, the hairdresser, the tradesman doing a homer, indeed many sole traders have scope for evading the correct declaration of income and therefore payment of tax/NIC etc.

Cue the pelters :wink: :greengrin

I don't know about the independent cabbie. How about the clothes shop owner?

Philip Green is the man who created a huge business chain of British stores - BHS, Topshop, Burton, Dorothy Perkins. He says he is a UK taxpayer but his wife is named as the official owner of this chain and she is officially a resident of Monaco.

Which meant that these companies gave her a tax-free £1.2billion (that's right, 'billion' not 'million') dividend in 2005.

The Tories appointed him in August as an advisor on what cuts to make in public services.

[IWasThere2016]

Wi a name like Green she might want to invest in the Hibs :thumbsup:

Seriously, super-rich the Greens may be - morally bankrupt they definitely are! :agree:

[.Sean.]

The tax system needs to be seriously simplified so that 'normal' folk can understand it. All this paying loads of tax and then being given it back through credits and so on is nonsense. Get lower paid taxpayers paying less tax in the first place and save a fortune on bureaucracy.
Certainly :agree:

I'll be perfectly honest, I haven't got a clue about the workings of the tax system. But why should folk be forced to hand back money they received it in good faith and haven't done anything wrong? It's not their fault so they shouldn't be punished.