I am doing some voluntary work for the elderly (TOPS if anyone is familiar). Anyway, a lady who retired in 09/10 has now received tax underpayment notices in respect of the tax years 08/09 and 09/10. These tax underpayments amount to just over £8,000 and they arose because HMRC had operated a BR code (incorrectly) on her employment for both years.
I wrote to HMRC and requested that these underpayments be cancelled under ESC A19 on the provision that HMRC had received a copy of her P60 & P11D in 07/08 and 08/09 (from the same employer) showing that she clearly had income taxable at 40% in both years together with small BIK's and so HMRC had failed to use this information correctly. I pointed out that details of the P60 would have been made available to HMRC by 19 May 2008 & 2009 and so correct tax codes should have been operated accordingly for 2008/09 and 2009/10 (i.e. personal allowances and code restrictions should have been allocated against employment income and a D0 tax code should have been operated on the Teachers pension that she also has).
Anyway, HMRC have responded saying that they do not believe ESC A19 applies and they have not failed to make timely use of certain information and that she should have realised the code was wrong....
I may just have a bias opinion but this seems like total rubbish to me!? How can HMRC expect every Joe Bloggs to understand about tax codes and know when they are wrong - this lady is over 70 years old!
I'd appreciate any other comments or advice how best to proceed...
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