I will instruct my wages department to ignore the notice of coding because I am the boss but even if I had noticed the error and I was a humble employee in somebody else's business , I doubt the wages people would listen to me. So I would have to write to HMRC and open a bank account to put the money away to be able to repay them without losing my code altogether in the next year.The number of actions required just mounts up. Multiply these issues across the taxpayer base and it's no surprise that HMRC is in such a mess
.... into Box 5 (Gift Aid payment) instead of Box 6 (one-off Gift Aid payments).
If you use box 5 then HMRC will automatically include it in your tax code.
They are quite often the ones given to churches, or religious organisations. If they do change, they tend to increase, so the tax code maybe isn't spot on but is closer than no change at all. It's the same with tax code changes for P11D's, and payments on account. They are all determined by the previous years figures.
2 years ago both myself and my wife declared company cars on the tax returns and advised HMRC that they had been relinquished at the end of the tax year. Nonetheless the following year we BOTH had codes showing that we still had a company car each.
Again, more letters back and forth .
Clearly it is inefficient
A client that retired earlier this year must have received about 15 tax code notices for the 2011/12 tax year, and another 20 for the 2012/13 tax year, all in separate envelopes, many received the same day.
Contradictory notices often received on the same day, too.
..... at different locations... and if an employer adjusted the code incorrectly it could lead to an escalation of the problems.
Just advise HMRC that the Gift Aid was a one-off and they will adjust the code.
Your company may be above board, but imagine what a corrupt employer could do if they were allowed to adjust tax codes indiscriminately without repercussion or consequence.
... but I have my system set to ask me before processing them.
However, I don't think ignoring them is good, I may hold processing whilst I query them and get amended if needed, - unless (as in your case) it is your own code.
Why not simply give everyone either the whole allowance or no allowance , say for second job ?
Then at the year end it gets adjusted by means of a refund to taxpayer or payment to HMRC
Why not trial it with 10,000 taxpayers and see how they like it ?
Just tick the box on the tax return that says you do not want your o/s tax liability to be taken via your tax code.
I think most people would want their tax code to reflect the true position as accurately as possible. Not everyone is in a position to pay extra tax during the year, and make a claim for a refund, or pay less tax during the year but have to make a lump sum payment later. By using, and adjusting, tax codes the difference is kept to a minimum (hopefully).
Is it ismpler to give blanket allowances to everybody in each job , as long as they only use it any any one job, and at the year end submit a return. The lack of universality of a tax return must cause a tremendous amoutn of leakage.
In USA everybody must submit a return, which for most people is simply their equivalent of a P60 declaration but it has to be done. Hence the rise of the likes of HR Block - pile it high and sell it cheap, it is a few minutes work in most cases so they can offer it for a knockdown price , say $50 .
Aha , I hear you argue , here is a man who goes mad with extra red tape advocating an increase.
Not so , my dear readers . I reckon that overall it will be more effiicent for everybody especially if it eliminates all the to and for with wrong codes
Like I said , try it on 10,000 taxpayers and see
The majority of people have one job, and the P35 gives HMRC all the information they need.
Even professionals make mistakes on tax returns (occasionally), so forcing everyone to do a return would not help, except to create more problems.
Go try it on 10,000 taxpayers and see the mess they make!
That's exactly why I said a trial . I think however , that it is a cultural issue , getting used to filing a tax return. More people do it since self-assessment . The vast majority of returns would be straightforward but it would form a mechanism for making one-off payments either way and I suspect it would make people understand the cost of a benefit in kind or the value of claiming allowable expenses that are employment related.
Does anybody out there know if the US system works smoothly and accurately ?
I am going out there in a couple of weeks, must ask the locals how they find it
I suspect they don't know any better and it's just another annual ritual
One hting I do know , and that is that tax evasion is a very very serious matter out there
Most governments are desperate to abolish cash and non more so than in the UK . The funny thing is that cash machines are mutiplying like rabbits and they BOE is happy for more fivers to be dispensed. I think cahs will be around for a long time yet unless it is actually abolished by legislation. Could it happen ?
I've been blogging on my website www.formationsdirect.com for some time with my non-PC view of the world of economics,business and other stuff. If you like to read the views of somebody who doesn't "toe the party line" you've come to the right place. Government cock-ups, financial turmoil , business scandals and people's behaviour - I've got something to say about it , whether you like it or not.
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had a case this morning...
ex client (now out of SA)....but underpaid by 2K....had 1 new draw down pension plus his ongoing annuity - so they operated normal allowance on annuity, and allowance plus additional age allowance less state pension on other pension...go figure!?
They assure me things are corrected for current year....which i am sure my ex client will be over the moon about.
I have seen similar with employee expense claims given credit in a PAYE code....(and more frequently an adjustment for rental income) - but there is a potentially large variance in these from year to year so it does beg the questions