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I have an employee of a client who has just been told that her 1999/2000 PAYE tax was wrong and that they want a further £600 plus interest from her.

She's a relatively low earner and this is a lot of money for her, they say that the former employer deducted the wrong amount of tax. (Employer since in liquidation)

I thought there was a piece of legislation that said if the employee had every reason to think the tax was correct, and the IR failed to correct within a reasonable time, they should waive. Can't find it now though.. Am I confusing this in my dotage with tax credits or is there something?
Ian Clark


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ESC A19 alive and well!!
Just to confirm that the above concession is still around and appears to be valid in this instance.

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I would not entertain this for a single minute!
Every year Forms P14 have to be lodged with the I/R by 19 May OR ELSE! For them to come back almost 5 years later and say that these details were wrong is totally unacceptable.
a) Short of the Employer using a non-advised Code Number or failing to complete a P46, (if no P45 available), or failing to operate an emergency Code, then I would tell them to write it off.
THEY issue Tax Code numbers. It is up to them to make sure they are right and if they are issued late in the tax year, they can amend the following year's to make up/allow any shortfall.

Bear in mind, Ian, that 1999/2000 may form part of the years when the Inland Revenue "lost" so many records and were widely reported last year as circulating "customers" to confirm their earnings for one or all of these years. Maybe yuour client comes into that category - at least worth a check. Does she still have her p60 for that year? If so, you can check out where the supposed error took place and how.

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further advice
Why not contact the charity TaxAid? It's personnel are expert in advising people on tax debt, particularly less wealthy individuals.

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Click on this

and it is on page 26.

When I looked at the index I expected it to click through. It didn't and it was shown in a different shade so I assumed it was not there. Sorry - weak excuse.

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There used to be ESC A19 Arrears of Tax Arising through Official Error. This is no longer in force. I think Self assessment rendered it obsolete.

It doesn't seem right that the 1999/2000 inquiry window closed 31 January 2002 and the Revenue are now trying to collect the arrears.

If no advice is forthcoming perhaps you will have to ask the IR to be sympathetic.

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Go back and query it.

The basic rules are the employer pays unless:

1. The employer acted in good faith and makes an error, or

2. The employee knew that there was a wilful failure to deduct.

I would write in say "sorry, don't understand, please explain."

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