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ESC A19 & liabilities caused by the tax code debacle

ESC A19 & liabilities caused by the tax code...

My 82 year old father-in-law to be has become very stressed lately as he had received tax demands from 2008/09 & 2009/10 which show laibilities totalling over £1,000.

This is all due to the tax code fiasco as he has never had to do a tax return.

To what extent have other people had success with using ESC A19 to get HMRC to waive the liabilities?

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07th Mar 2011 10:29

Don't hold your breath

First, check the demands are accurate. Don't rely on HMRC's figures. Get all the old source data out - details of pensions received, P60s/P45s, bank statements. Make sure he's benefitted from his full age-related personal allowance each year. Check the position for this year and earlier years in case he's also due refunds.

If the amount is still due, try to get your father not to panic. HMRC are not going to start throwing octogenarians out of their homes and/or into the local clink, despite what their increasingly threatening standard letters say. Contact HMRC to establish a dialogue, explain the situation, and attempt to agree a viable payment plan.

Going straight down the A19 route is not the best move. For a start, HMRC are well within the limits for establishing the 2009/10 liability, and you'll only have a very slim chance on 2008/09. You'll also immediately antagonise HMRC when you could do with them on your side.

It is unfortunate, but it has always been true, that individuals are responsible for checking their tax codes are correct, that they are being applied correctly, and that any income not fully taxed is reported to HMRC. Although I have sympathy for your father and others in a similar situation, the correct tax still has to be paid.

Yes, HMRC have been slow, ineffective muppets - two years' worth of PAYE should not have been reconciled together. I hope that this episode has brought home to people that no news from HMRC is not always good news.

TaxManDan

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07th Mar 2011 10:32

Quite a few successess

There's quite an active group over on the UK business forums of accountants helping those affected pro bono and there seems to be quite a few successes.

 

http://www.ukbusinessforums.co.uk/forums/forumdisplay.php?f=122I

I'm telling people that it's definitely worth the price of a stamp and sheet of paper to make a claim as long as there are grounds for believing that the person's tax affairs were in order, i.e. that any new sources of income had been advised to HMRC by either the taxpayer or employer/govt body and that HMRC have repeatedly failed to act on that information.

Where it doesn't seem to work is where there are new P11d benefits or where someone becomes a HR taxpayer during the year where, quite rightly, HMRC don't know until long after the year end and couldn't have been expected to get the tax "right" earlier.  That said, however, in cases where this has spanned 2-3 or more tax years. then the ESC should still apply.

What you need to think about is when the new/higher income source started - for ESC to apply, it should have been 2-3 years ago or more, and also when realistically, HMRC would have come to know about it.  I really don't think you'll be successful for 08/9 and/or 09/10 unless the reasons for the underpayment were present and known by for 07/8 and earlier.

 

 

 

 

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07th Mar 2011 12:41

A19 worked for my client.

I had success with a lady aged under 65, but receiving the state pension and another small occupational pension.  She had a 647L code for the occupational pension.  Had she been over 65, the higher age allowance would have covered both pensions and no tax would have been due.

I requested that A19 be applied as:

HMRC should have known she had been receiving the state pension for a few years (she has now just celebrated her 65th birthday).

They knew she had an occupational pension and would have had a P60 from the pension company presumably by 19 May each year.

They shoud have restricted her PAYE code before the start of the tax year, not be trying to reclaim the underpaid tax more than 18 months after the END of the year.

 

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By Monsoon
07th Mar 2011 13:06

A19

It is always worth a try if the circumstances fit.

I'm involved with the UKBF group mentioned by Ken and we have had plenty of successes. Often they will reject it the first time but will accept it on complaint (we don't take no for an answer the first time).

 

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07th Mar 2011 20:26

How far back?

I would be surprised with a man of his age if his situation had changed much in recent years. HMRC are also reconciling 2007/8 - have you checked to see if that and earlier years repeat the error of later years? If they do, you may be on stronger ground with ESCA19.

HMRC have also agreed in a ministerial statement 11 Jan that where the error is due to failure to code state pension then this falls within ESCA19. Is this the reason in his case?

 

 

 

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07th Mar 2011 23:09

State pension omitted

The automatic application of A19 to pensioners related only to those who have a liability arising in relation to failure to code out a state pension which commenced in 2008/09 or earlier. Unfortunately it won't help those who started getting their state pension in 2009/10.

The LITRG also say that the same should apply to those in receipt of other taxable state benefits (such as taxable incapacity payments) on the same terms.

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By cfield
15th Mar 2011 15:01

A19 and old pensions

My information is that HMRC are allowing A19 on a blanket basis for anyone with pensions coded incorrectly before 2008/9. Unless the shortfall arises due to undisclosed income or the enquiry window is still open, there shouldn't be any problem claiming A19.

My mother had statements from them showing about £1,000 of unpaid tax for 2 years. I discovered that it was due to her widow's pension being paid on a standard tax code instead of BR. It must have been going on ever since my father died in 1999. Good job I didn't know about it before otherwise I might have had to file an MLR report on my own mother :-)

Anyway, we wrote back claiming A19 and they waived the arrears. Even if they hadn't, we'd have had a case against the Civil Service who got her tax code wrong. But obviously HMRC had all the information they needed to change the code as they get the P60s each year. Hence their fault.

There are so many cases like that all over the UK that HMRC should really be sending their statements out to anyone over a certain age with a note saying that A19 may apply, just to avoid stressing old people like the OP's father.

Chris

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16th Mar 2011 14:03

ESC A19 success

I only had one case - claimed ESC A19 and it worked.

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10th Nov 2012 18:08

ESCa 19 & tax ubderpayments

Yes, I did it at last, I had just recieved a letter from HMRC today saying that  they gave up all my husband's underpayment for years 2008 till 2012 & they are even going to send us a check for £40 as a gesture for the trouble they caused him.

I have to say it wasn't easy at all, They rejected the case several times but I didn't give up & I won at last cause I was right.

What I want to say is that If you submitted your case & it was rejected don't give up & take it to the next level as long as you are genuine.

I am happy to help anyone, at the end we are all in the same boat.

I have been working on this case for six months & I won at last

I am so happy

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