Why are HMRC Northampton being such a pain?

Why are HMRC Northampton being such a pain?

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I've just sent another batch of P11DX dispensation requests to HMRC using their structured e-mail, and it seems that almost all those dealt with by the Employer Compliance unit at Northampton receive unnecessarily strict treatment. The other HMRC offices seem to wave them through, but Northampton constantly issue partial dispensations or ask lots of questions.

The latest concerns benchmark subsistence. The HMRC letter says "As your dispensation would only cover 1 employee, I cannot include Benchmark Scale Rates with your Dispensation Notice" and "Where the expenditure to be covered by the scale rates is limited to a small number of employees or the frequency of claims is small we do not consider that scale rates are appropriate".

I haven't seen anything in the HMRC Employment Income Manual to back this up. It seems to me that some nitwit at Northampton dislikes dispensations and has taken it upon himself to be as obstructive as possible. They obviously don't get it. The purpose of dispensations is to save them work as much as us. What's the use of a dispensation that doesn't allow half of the tax free expenses you wish to claim? You might just as well carry on filing P11Ds for everything than have to review each year what is allowed and what isn't.

I don't mind filing P11Ds too much (it's not too time consuming for the one-man companies) but it's the silly tax codes and even sillier P800s that cause all the problems. We get clients being told by box-ticking Assistant Officers that they must file tax returns even though they owe no tax, or because their expenses were more than £6,000 (a new one on me this). A s336 claim can be made by letter but they just seem to ignore them and demand tax returns, costing the client time and/or money.

Is anyone else having all this trouble with Northampton or are they just picking on me for some reason? Is it official HMRC policy to refuse benchmarks to small companies or just someone at Northampton making up his own rules? If so, are they allowed to do that?

I wonder whether it might help if some of us sent a petition to the Working Together group asking them to intervene and have words with Northampton. Would that have any affect or would it just be a waste of time?

If (as I suspect) the latter, I wonder if it would help to avoid the structured email and just send a paper P11DX to the client's PAYE office, thus hopefully bypassing Northampton.

Comments welcome.

Replies (3)

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By Steve Holloway
28th Feb 2013 12:37

Totally inconsistent ....

I did a catch up batch of about 20 last year. 90% ..not even a question. Some returned with queries extending to three pages and a few would not consider the request at all for the reasons you have given. It seems to depend on which officer gets the request which is totally counter-productive.

Thanks (1)
By George Attazder
28th Feb 2013 12:46

Write back...

... and tell them what HMRC's own guidance at EIM05233 actually says:

"You need to complete a form P11DX, which is the form used by employers to apply for a dispensation, and submit it to HMRC. On the form you need to indicate with a tick against the appropriate statement under 'Travel and Subsistence' that you intend using HMRC’s benchmark scale rates to reimburse your employees’ subsistence payments. By ticking this box you would be merely notifying HMRC that you intend paying HMRC’s benchmark scale rates for day subsistence and that you have adequate management processes in place to ensure that payments are only made where all the qualifying conditions are met."

If you've ticked the box, you can start using the system according to the original Business Brief (24/09).

EIM05230 says "The Bulletin made clear that all employers could apply to use the benchmark rates".

It goes on to say:

"One man companies/Personal service companies

If a company applies to pay the benchmark rates to the controlling shareholder/director, you should consider carefully the guidance at EIM30059 before agreeing to the request. You should not refuse the request simply because it is from a one man company or smaller employer".

Thanks (1)
By cfield
28th Feb 2013 13:08

Just what I need

Nice one George. Think I'll do just that. One copy for Northampton and one for the complaints people, if I can find out who to write to.

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