Coding out underpayments if tax liability doubles

HMRC refusing to code out tax liability (was this issue ever resolved?) PAYE 98005

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Client had an underpayment of tax of £1100 for 2015/16. The tax return was submitted early December and the request made for the 1100 to be collected via the tax code.

HMRC have refused to code in the underpayment because thos would double the clients tax liability under PAYE.

Not only that but they have whacked in a payment on account of 550 AND penalties for late payment! Late payment of a bill we had asked to be collected via he code

Clients income is the traditional 8,000 approx salary plus approx 40,000 in dividends.

I see there was quite alot of comment on this in 2011 and colleagues were trying to get HMRC to back off because there was no statutory justification for their stance.

Does anyone know if any success was achieved here or have any suggestions how I can get round this?

Surely with a salary of 8,000 HMRC could code the 1100 in and get their money quite happily.

Are we likely to have more success if we told HMRC the salary in 2017/18 was going to be 11,500?

 

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RLI
By lionofludesch
03rd Apr 2017 19:25

It's hard to make them code it out.

And I can't find anything that says the taxpayer has a right to demand it. I actually think it's a concession.

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By SteveHa
04th Apr 2017 09:32
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By arthurallan
04th Apr 2017 09:40

There was a thread on here in 2011 in which Shirley Martin advised that this issue had been discussed by the AWEB discussion group and raised at a high level with HMRC and I just wondered if anything had come out of this?

Guess its another lesson from experience and something else to flag up for clients when not ticking the box on the tax return for not collecting via the tax code (another tortuous HMRC double negative option)

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