HMRC useless dinosaur ?

mully79

Does anyone else have to put up with HMRC using fictious figures to alter their tax code on PAYE.
I have already supplied them with the actual and complete figures for the tax year through self assessment a month ago.

shirley_basso

Probably a temp / emergency tax code because you / your accountant / your employer is doing something wrong

elbowloh

I had an argument with an HMRC advisor this morning via their online chat.

1) they estimated my annual income for this year to be double what it will be

2) they think I underpaid bik tax on a company car that I gave back in November 2018/2019 and he insisted I had to pay for it for December to April, even though I no longer had the benefit.

3) They estimated I had already underpaid tax for this financial year by £6000.

As a result I had what equates to a -£6000 personal allowance to pay all the above back!

I managed to resolve 1 and 3, still battling over 2.

mully79

Oh wow. Thats far worse.
They seem to have estimated my income based on an average of 2019 and 2020 which is nonsense as theyre quite far apart.

I have to pay back a percentage of child benefit due to the effect of BIK due to a company car but theyre ignoring that ive paid half back already through their direct debit payments system so now im paying double.

elbowloh

Thing is, mine is PAYE, I've always been PAYE, so it should be simple right?

Stevo_666

Common error from HMRC (for those who get bonuses) seems to be taking your pay in the month you get a bonus and extrapolating that for the whole year. I got a message from them about a tax code change and logged in to find they had estimated my annual pay to be some unfeasibly large amount by using the that 'logic'. Fortunately you can just change it back manually to a more realistic number.

First.Aspect

elbowloh said:

Thing is, mine is PAYE, I've always been PAYE, so it should be simple right?

It's only simple if your salary goes down each year. If it goes up I guarantee that at the end of the year you will owe a four figure sum, somehow.

I also guarantee that for the first few months of next year your take home will be inexplicably high.

ddraver

Seeing as how they're being comprehensively fleeced by my current employers has seriously limited my respect for them...

elbowloh

Stevo_666 said:

Common error from HMRC (for those who get bonuses) seems to be taking your pay in the month you get a bonus and extrapolating that for the whole year. I got a message from them about a tax code change and logged in to find they had estimated my annual pay to be some unfeasibly large amount by using the that 'logic'. Fortunately you can just change it back manually to a more realistic number.

Yeah they seem to have extrapolated my (meagre) redundancy payout as being something I'd get every months in 2021/22, even though their records I had not been paid such amounts since May 2020.

I still don't get the car tax thing though. His argument was "that's just how it works". So I had the car for say 50% of the year and up to that point I had paid 50% of the bik due for that car for the year. Even though I gave it back, he said I had to keep paying tax on it, albeit at a lower value. It just didn't make sense

Stevo_666

elbowloh said:

Stevo_666 said:

Common error from HMRC (for those who get bonuses) seems to be taking your pay in the month you get a bonus and extrapolating that for the whole year. I got a message from them about a tax code change and logged in to find they had estimated my annual pay to be some unfeasibly large amount by using the that 'logic'. Fortunately you can just change it back manually to a more realistic number.

Yeah they seem to have extrapolated my (meagre) redundancy payout as being something I'd get every months in 2021/22, even though their records I had not been paid such amounts since May 2020.

I still don't get the car tax thing though. His argument was "that's just how it works". So I had the car for say 50% of the year and up to that point I had paid 50% of the bik due for that car for the year. Even though I gave it back, he said I had to keep paying tax on it, albeit at a lower value. It just didn't make sense

They employ some real goons on the helplines Elbow. Clearly if you didn't have the benefit for part of the year you shouldn't get taxed on it. That's like trying to tax you on salary that you weren't paid.

Surely your P11D will have the right numbers on it?

elbowloh

Stevo_666 said:

elbowloh said:

Stevo_666 said:

Common error from HMRC (for those who get bonuses) seems to be taking your pay in the month you get a bonus and extrapolating that for the whole year. I got a message from them about a tax code change and logged in to find they had estimated my annual pay to be some unfeasibly large amount by using the that 'logic'. Fortunately you can just change it back manually to a more realistic number.

Yeah they seem to have extrapolated my (meagre) redundancy payout as being something I'd get every months in 2021/22, even though their records I had not been paid such amounts since May 2020.

I still don't get the car tax thing though. His argument was "that's just how it works". So I had the car for say 50% of the year and up to that point I had paid 50% of the bik due for that car for the year. Even though I gave it back, he said I had to keep paying tax on it, albeit at a lower value. It just didn't make sense

They employ some real goons on the helplines Elbow. Clearly if you didn't have the benefit for part of the year you shouldn't get taxed on it. That's like trying to tax you on salary that you weren't paid.

Surely your P11D will have the right numbers on it?

Tbh, I haven't dug that out yet!

mully79

When i first got my car for
part year the cash equivalent value was £4500 for about 6 months of that year.
The subsequent 12 month figure was £9100.
I assume on giving the car back you would have a lower cash value on the P11D for the year which would reduce your gross for that tax year.

surrey_commuter

mully79 said:

Oh wow. Thats far worse.
They seem to have estimated my income based on an average of 2019 and 2020 which is nonsense as theyre quite far apart.

I have to pay back a percentage of child benefit due to the effect of BIK due to a company car but theyre ignoring that ive paid half back already through their direct debit payments system so now im paying double.

If you are in the same position this year with CB clawback then pay more into your pension. If you have two kids then for every £4 you put in the Govt will top up with £6. That way rather than you paying them they will pay you.

mully79

Thats exactly what I did. Salary sacrifice+big increase on pension contributions
I wonder if the letters sent out are auto generated somehow and out of date before they're even sent.
Just nonsense that you have to call to sort it out which takes at least an hour.
This is the second time already this year ive been put on an x code.

surrey_commuter

mully79 said:

Thats exactly what I did. Salary sacrifice+big increase on pension contributions
I wonder if the letters sent out are auto generated somehow and out of date before they're even sent.
Just nonsense that you have to call to sort it out which takes at least an hour.
This is the second time already this year ive been put on an x code.

Excellent work in providing living proof that the Laffer Curve is live and well.

Time to scrap CB and pay people based on need rather than number of children.

And scrap the 60% rate between £100-125k and have 45% top rate starting at £100k

rjsterry

surrey_commuter said:

mully79 said:

Thats exactly what I did. Salary sacrifice+big increase on pension contributions
I wonder if the letters sent out are auto generated somehow and out of date before they're even sent.
Just nonsense that you have to call to sort it out which takes at least an hour.
This is the second time already this year ive been put on an x code.

Excellent work in providing living proof that the Laffer Curve is live and well.

Time to scrap CB and pay people based on need rather than number of children.

And scrap the 60% rate between £100-125k and have 45% top rate starting at £100k

It's the 'based on need' bit that is the problem as with WFA. Means testing is more expensive than the potential saving of not paying the benefit to people who don't need it.

thistle_

They 'forgot' to pass on 12 months of my student loan repayments once and denied collection of student loan payments from salaries was anything to do with them.

Once I sent SLC the payslips I think they sent the boys round to HMRC and gave them a good seeing to.

So yes they are useless.

shirley_basso

surrey_commuter said:

mully79 said:

Thats exactly what I did. Salary sacrifice+big increase on pension contributions
I wonder if the letters sent out are auto generated somehow and out of date before they're even sent.
Just nonsense that you have to call to sort it out which takes at least an hour.
This is the second time already this year ive been put on an x code.

Excellent work in providing living proof that the Laffer Curve is live and well.

Time to scrap CB and pay people based on need rather than number of children.

And scrap the 60% rate between £100-125k and have 45% top rate starting at £100k

I think CB has changed now. We get a 20% top up on approved childcare payments up to £1000 of benefit per annum. What's odd is that it isn't reducing as salary increases, it disappears off a cliff edge once one person salary goes above £100,000. Still a way to go!

pangolin

shirley_basso said:

surrey_commuter said:

mully79 said:

Thats exactly what I did. Salary sacrifice+big increase on pension contributions
I wonder if the letters sent out are auto generated somehow and out of date before they're even sent.
Just nonsense that you have to call to sort it out which takes at least an hour.
This is the second time already this year ive been put on an x code.

Excellent work in providing living proof that the Laffer Curve is live and well.

Time to scrap CB and pay people based on need rather than number of children.

And scrap the 60% rate between £100-125k and have 45% top rate starting at £100k

I think CB has changed now. We get a 20% top up on approved childcare payments up to £1000 of benefit per annum. What's odd is that it isn't reducing as salary increases, it disappears off a cliff edge once one person salary goes above £100,000. Still a way to go!

Think SC is talking about this one rather than childcare vouchers

https://www.gov.uk/child-benefit/what-youll-get

kingstongraham

rjsterry said:

surrey_commuter said:

mully79 said:

Thats exactly what I did. Salary sacrifice+big increase on pension contributions
I wonder if the letters sent out are auto generated somehow and out of date before they're even sent.
Just nonsense that you have to call to sort it out which takes at least an hour.
This is the second time already this year ive been put on an x code.

Excellent work in providing living proof that the Laffer Curve is live and well.

Time to scrap CB and pay people based on need rather than number of children.

And scrap the 60% rate between £100-125k and have 45% top rate starting at £100k

It's the 'based on need' bit that is the problem as with WFA. Means testing is more expensive than the potential saving of not paying the benefit to people who don't need it.

Child benefit is means tested now.

Pross

I got caught out by the Child Benefit thing a year or two back. I'd been below the earnings threshold when the new cap came in and there had been a bit of attention given to it but as my salary plus some bonuses came in over the next few years I'd gradually gone over the cap until reaching the point I wasn't entitled to any but hadn't even thought about it until I got a letter saying I may owe money. I had to repay thousands instantly.

I appreciate it was my error but did feel HMRC could have done more to alert to the potential e.g. a letter with your tax statement saying 'we note your earnings are over the CB threshold, if you are claiming CB you should do a self-assessment'. In true Government style the cap was rushed in without being considered properly. The ridiculous way in that two people could be earning £1 under the threshold and still be paid the full amount whilst someone earning a few thousand over the threshold gets nothing should have been addressed and the whole lack of any link between the benefits system and HMRC is a problem.

surrey_commuter

kingstongraham said:

rjsterry said:

surrey_commuter said:

mully79 said:

Thats exactly what I did. Salary sacrifice+big increase on pension contributions
I wonder if the letters sent out are auto generated somehow and out of date before they're even sent.
Just nonsense that you have to call to sort it out which takes at least an hour.
This is the second time already this year ive been put on an x code.

Excellent work in providing living proof that the Laffer Curve is live and well.

Time to scrap CB and pay people based on need rather than number of children.

And scrap the 60% rate between £100-125k and have 45% top rate starting at £100k

It's the 'based on need' bit that is the problem as with WFA. Means testing is more expensive than the potential saving of not paying the benefit to people who don't need it.

Child benefit is means tested now.

And could be done more efficiently by breaking the link with children.

Take the £10bn and redistribute to poor people and childcare vouchers for those who need it.

I also think that now we are no longer using an abacus and index cards we could do better with the efficiency of means testing

rjsterry

kingstongraham said:

rjsterry said:

surrey_commuter said:

mully79 said:

Thats exactly what I did. Salary sacrifice+big increase on pension contributions
I wonder if the letters sent out are auto generated somehow and out of date before they're even sent.
Just nonsense that you have to call to sort it out which takes at least an hour.
This is the second time already this year ive been put on an x code.

Excellent work in providing living proof that the Laffer Curve is live and well.

Time to scrap CB and pay people based on need rather than number of children.

And scrap the 60% rate between £100-125k and have 45% top rate starting at £100k

It's the 'based on need' bit that is the problem as with WFA. Means testing is more expensive than the potential saving of not paying the benefit to people who don't need it.

Child benefit is means tested now.

Do you mean the tapering above £50k? That's not really means testing so much as a crude claw back which significantly disadvantages families where one person is the majority earner. Obviously much cheaper to run than proper means testing. My memory of the Child Tax Credit forms is that they were pretty thorough and needed various other documents to substantiate the claim.

elbowloh

If i was to claim CB, apparently i would get 80p after tax.

I have to say the tax free childcare system has been very simple to set up and use and quite handy on the wallet front too.

thistle_

surrey_commuter said:

I also think that now we are no longer using an abacus and index cards we could do better with the efficiency of means testing

Are you sure HMRC and the government have upgraded?

pblakeney

thistle_ said:

surrey_commuter said:

I also think that now we are no longer using an abacus and index cards we could do better with the efficiency of means testing

Are you sure HMRC and the government have upgraded?

I'm fairly sure they recently upgraded to Win98.

kingstongraham

rjsterry said:

kingstongraham said:

rjsterry said:

surrey_commuter said:

mully79 said:

Thats exactly what I did. Salary sacrifice+big increase on pension contributions
I wonder if the letters sent out are auto generated somehow and out of date before they're even sent.
Just nonsense that you have to call to sort it out which takes at least an hour.
This is the second time already this year ive been put on an x code.

Excellent work in providing living proof that the Laffer Curve is live and well.

Time to scrap CB and pay people based on need rather than number of children.

And scrap the 60% rate between £100-125k and have 45% top rate starting at £100k

It's the 'based on need' bit that is the problem as with WFA. Means testing is more expensive than the potential saving of not paying the benefit to people who don't need it.

Child benefit is means tested now.

Do you mean the tapering above £50k? That's not really means testing so much as a crude claw back which significantly disadvantages families where one person is the majority earner. Obviously much cheaper to run than proper means testing. My memory of the Child Tax Credit forms is that they were pretty thorough and needed various other documents to substantiate the claim.

It's not universal, and is not given to people who earn more. It's not detailed means testing, but it is means tested. If it was means tested, I'd expect that £50k to be considerably lower, given that £50k is 130% of the average full time wage.

rjsterry

kingstongraham said:

rjsterry said:

kingstongraham said:

rjsterry said:

surrey_commuter said:

mully79 said:

Thats exactly what I did. Salary sacrifice+big increase on pension contributions
I wonder if the letters sent out are auto generated somehow and out of date before they're even sent.
Just nonsense that you have to call to sort it out which takes at least an hour.
This is the second time already this year ive been put on an x code.

Excellent work in providing living proof that the Laffer Curve is live and well.

Time to scrap CB and pay people based on need rather than number of children.

And scrap the 60% rate between £100-125k and have 45% top rate starting at £100k

It's the 'based on need' bit that is the problem as with WFA. Means testing is more expensive than the potential saving of not paying the benefit to people who don't need it.

Child benefit is means tested now.

Do you mean the tapering above £50k? That's not really means testing so much as a crude claw back which significantly disadvantages families where one person is the majority earner. Obviously much cheaper to run than proper means testing. My memory of the Child Tax Credit forms is that they were pretty thorough and needed various other documents to substantiate the claim.

It's not universal, and is not given to people who earn more. It's not detailed means testing, but it is means tested. If it was means tested, I'd expect that £50k to be considerably lower, given that £50k is 130% of the average full time wage.

CB is paid per family, but the CB claw back is applied to individuals not the combined income. This means that a couple earning £30k each (or even £49,999 each) get the full allowance but the couple earning & £0 + £60k - same family income - get nothing. There's also the question of what CB is for given our low birth rate and aging population.

hopkinb

Don't talk to me about CB - when they introduced the cap - I told my wife to cancel it (all in her name, she received it directly into her bank account), she said she would, but didn't, merrily kept claiming it for 5/6 years without telling me, HMRC rumbled it, then I had to pay back £12k including interest (they kindly waived the penalties...).

rick_chasey

hopkinb said:

Don't talk to me about CB - when they introduced the cap - I told my wife to cancel it (all in her name, she received it directly into her bank account), she said she would, but didn't, merrily kept claiming it for 5/6 years without telling me, HMRC rumbled it, then I had to pay back £12k including interest (they kindly waived the penalties...).

returning it will give your wife NI credits so it is still worth claiming even if you are over the threshold.

elbowloh

hopkinb said:

Don't talk to me about CB - when they introduced the cap - I told my wife to cancel it (all in her name, she received it directly into her bank account), she said she would, but didn't, merrily kept claiming it for 5/6 years without telling me, HMRC rumbled it, then I had to pay back £12k including interest (they kindly waived the penalties...).

So when you said the wife paid for the garden office herself...