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Latest HMRC Wheeze

Latest HMRC Wheeze

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Employee was given some dosh by employer to pay for extra personal costs in 2012-13. Employer then did P11D and employee had lower tax code to compensate in 2013-14.

Employee has just received new tax code for 2014-15 with exactly same deduction for P11D expenses as last year. She called HMRC, who told her tax code could not be adjusted until a P11D had been received for 2013-14. As she's no idea what the phrase P11D means she had to accept what they said.

As payroll agent I called HMRC to tell them this was ridiculous. The P11D item was a one off matter, for which she has now paid tax in full, and no P11D will be raised for anyone this year. "Nil" P11D's are not required and anyway the company has a dispensation in place. The person I spoke to agreed that the item should not be deducted from this year's tax code and said employee should call them. I said she already had called and could not see why she should have to call again. Given that the person she spoke to gave her the wrong information why would she be any luckier next time around? I stressed she was a low paid person and the deduction in her tax code was causing real hardship, particularly given it is not valid.

Good old HMRC said they would put a note on her record that I had called, but she must call again if a change is to be made to her tax code.

What bothers me most is that they've changed policy and will insist on all P11D people ringing them every tax year if the deduction is no longer valid and then will fight it all the way.

Perhaps I'm being unfair and when the employee rings HMRC back, they'll apologise profusely, take her out to lunch, and tell her they'll lower her total tax bill overall as a goodwill gesture.

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By taxhound
29th Apr 2014 18:19


They will probably try and put it into next year's code too, and the one after...  Once someone has had a BIK once, HMRC seem very reluctant to let it go.  I have a couple of clients with recurring BIK issues in their PAYE codes from several years back.

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By ACDWebb
29th Apr 2014 22:25

Well to be fair

it's not exactly a 'wheeze' putting it in in the first place in the absence of a 13-14 P11D. What would happen if the deduction was not made in the first place and the employee ended up underpaid as a result? Shouts of ESC A19 anyone?

I'll grant that not taking it out on a call to say it was a one off 'until the 13-14 P11D is received' is not great.

And why if the employer gave the employee cash for a personal item was it P11D and not just taxed through payroll in the first place?

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By mbee1
30th Apr 2014 09:02


I've had the same scenario.  The problem appears to be that the code is auto calculated by the computer using the P11D information.  I was told there is no facility to tell the computer to ignore the P11D and the only way is to make an annual telephone call to HMRC asking them to remove it.


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By Moonbeam
30th Apr 2014 09:12

Yes, it's all down to archaic computer systems in the main

HMRC senior people don't seem to understand that good computer systems should save staff time in having to answer so many of our questions.

This is my first experience of a P11D one off item being carried forward like this, as P11D's are rare for most of my clients. It's useful to hear of your experiences and I will relay these to any clients who can't be bothered to put something on the payroll, to remind them of the later hassle they will have from the member of staff concerned.

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By Ken Howard
30th Apr 2014 10:20

Online PAYE code change service?

Couldn't the employee use the HMRC new online facility for changing the PAYE code?

We've used it a couple of times and it seems to work - avoids the pain of the call centres


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By Moonbeam
30th Apr 2014 10:43

Brilliant Idea!

I didn't know this option existed!

I shall email the details to the employer so he can help the employee sort this out.

thank you Ken!

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