PAYE meltdown ?

PAYE meltdown ?

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I have recently been receiving enquiries from regular PAYE 'customers' who have been working for same employer for many years under PAYE, and are being approached by HMRC for underpayments going back 3/4 years,from information obtained it appears PAYE software upgrade happened in 2008/09 where they allocated references to temporarily archive records before reintegrating them to the system! this is now happening and underpayments rolling up over the past few years are now being demanded. applications under ESC A19 are refused as HMRC say 'customer' should have been aware of these underpayments and seem to take no responsibility for their failing to collect underpayments year on year despite them having all relevant information to do so and issuing many PAYE codes that clearly were all wrong (did not collect previous years underpayments). has anyone else suffered these and any suggestions or advice or precedents? I have requested they confirm in writing that regular PAYE 'customers' should not assume that their affairs are being managed correctly and efficiently by HMRC, but with no response!!

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By cbp99
08th Jun 2012 13:34

ESC A19

A year ago my experience of ESC A19 applications was that they were agreed, usually after an intial rejection.

More recently they are being refused. One HMRC tactic is to say that "the tax your client owes was large enough for them to notice". I have asked HMRC how much is too much in this case and await their reply, although in the case I am curerntly dealing with it is less than 1% of their tax liability and less than half 1% of take home pay.

In 2008-9 it was particularly diffiicult for clients to know whether they were being taxed correctly, or "Could reasonably have believed that his or her tax affairs were in order" (per Paye Manual page 95005) as the PA was changed post-budget and not implemented till halfway through the tax year.

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