It’s a bit convoluted, as things involving HMRC are, but I’ll try to keep it brief.

I used to be Ltd company, but went PAYE in November 2011. Had a few years faff still filling in self assessment, but no problems cos all I had to do was copy figures from the relevant year’s P45/P60, right? Wrong.

I received a letter in November this year querying my final SA return, for 2013-2014. During this year I left company A in January and moved to company B in February. Company B were never particularly on the ball so I didn’t pay any PAYE on earnings from Feb & March. I filled in my self assessment form online, with figures from my P45 of company A and P60 from company B. I never received a P60 from company A, but had all payslips which confirmed the amounts on my P45. There was an amount of tax to pay from my earnings from company B, which was calculated by HMRC when I submitted my SA form, and which I paid. So, all square when it comes to earnings and tax paid.

However, there are two issues.

1 – I was in a share scheme with company A which had to be closed when I left their employment. There was roughly £7k in shares, and I had to cash them in. The company dealing with it withheld the correct amount of tax from these shares and paid the rest into my account. I now have an additional “payslip” from company A that details the share save scheme payments/tax, but only after I asked for it in November.

2 – Company B paid no student loans payments in Feb or March. To combat this, I phoned the Student Loans Company myself in March 2014 and cleared the remaining balance, seeing as it was less than £500. I have a letter confirming I owe £0 in student loans.

The issues HMRC have are as follows:
1 – The income/tax figures I entered from my P45 of company A didn’t match the figures company A submitted to HMRC. My P45 made no mention of the share scheme, just my actual salary & tax paid on that, so that’s what I entered on my SA form. The figures company A submitted included the share scheme income and the additional tax paid on that income. I’ve still paid the correct amount of tax overall, just understated my income/tax paid on my SA form. An honest mistake, but as the SA form says to use either P45 or P60 to complete income/tax figures I never thought there might be a difference between the two.
2 – because I never paid any student loans payments through company B, HMRC are wanting to collect 1 years worth of those too, despite me having no student loan outstanding.

The amount HMRC want off me is in excess of £4000. Can anyone explain to me how I can explain to them that a) I have paid the correct amount of tax (they have acknowledged over the phone that the 3 amounts are individually correct – tax from company A P45/tax from share save scheme/tax calculated by them from untaxed company B income – but don’t seem to be able to reconcile that with their calculations as a whole), and there is no point collecting any student loans payments from me as the balance is £0.

No idea. But I think I’d start by putting everything in writing and sending it to them. That way your not relying on the notes of whoever you speak to on the phone

No idea. But I think I’d start by putting everything in writing and sending it to them. That way your not relying on the notes of whoever you speak to on the phone

I end up doing this every year and it all gets sorted eventually…..

Describe it all in a letter and attached a copy of every piece of paper, individually numbered with relevant figures highlighted and then refer to them in your cover letter.

NB My last letter resulted in a cheque for £6k off them 🙂

I’ve already sent them everything I have, with a covering letter explaining. The letter waiting for me today was “tell us why you filled in a different amount on your SA form to that submitted by company A. If we don’t hear from you by 6th Jan we will charge you 15% of the £4k-something you already have outstanding.”

I’d like one of them to explain where this £4k figure comes from and none of them can. They just know it needs paying. Infuriating doesn’t quite cover it.

My wife’s had similar but the other way round – gone from PAYE to self employed. Somehow we have a calculation on how much tax she didn’t pay the previous tax year that she has been paying for 14 months @ £58 per month. But for the same year she’s got a penalty for not submitting a return – but the question HMRC can’t answer is how come they know how much she owes but they apparently haven’t had the return!!??!! Work that one out… Appeal coming soon

Then to make matters worse, for this tax year our accountant has done her SA return and it says she now is owed in this tax year about the same as she owed HMRC in the previous tax year so it balances out. But the 14 months @ £58 they can’t see it on their systems for some reason but acknowledge it although they can’t get to it.

It was only me questioning it that has brought it to light and has taken about 4 months. So she should be getting a rebate of about £800. Although my tax return has just been done and I owe just over a grand… the question is “Do I trust it??”

individuay some very nice folks trying to make the best of a bad stick….. a very nice lady said i owed just over 3500 more..so i said spread it over three months.. take what you need here are my bank details.. cheers we will said she and they did.. and then chased me for 3 years for more saying they had made a mistake and not taken enough.. admitted it ws their fault and they were told to take what they needed.. and yet i was fined and charged because they didnt..

. The letter waiting for me today was “tell us why you filled in a different amount on your SA form to that submitted by company A. I

Have you told them that was the figure on your P45?

I’d like one of them to explain where this £4k figure comes from and none of them can. They just know it needs paying. Infuriating doesn’t quite cover it.

In your situation I’d hire an accountant / tax adviser as they’d know the system and be better able to resolve the issue….

I told them that, and sent them a copy of my P45 as proof. I also sent them the extra share scheme “payslip” which shows – to the penny – the difference between what I said I’d earned and what company A said I’d earned, and the extra tax I paid.

I think an accountant is probably the best bet.

Mrs Sandwich suggests that your P60 from company A (submitted direct to HMRC) possibly has the share save number included in the total and they have taxed it twice, plus the possibility that this double counting has tipped you into higher rate.
The suggestion is to ask them for a letter detailing how the £4K bill has been calculated.
Or as above go with professional advice.

^^^ as above but hold off on the accountant as it sounds like you’re more than capable of patiently requesting and awaiting the info.
You can telephone but you may have to wait. In writing is good but will potentially take a lot longer (weeks/months) however in the meantime they would ordinarily expect to suspend collection action for any disputed amount.
You used to be able to call in to speak face to face and sort things like this but massive sale office closures and staff cuts leaves digital as the way forward whether the public likes/wants it or not.

Thanks for the advice folks. I’ll reply to today’s letter reiterating what I’ve already told them and see what happens. Can I suggest in this letter that they refrain from charging me 15% come 6th January if this isn’t all sorted?

Do it in writing, copy everything and I would send the letters in twice.
Send it so its signed for.

Then they have to lose them twice.

I spent the day dealing with the tax office today – the woman I spoke to told me the phones are playing up, she had spent all day yesterday trying to phone me but failed as the system kept breaking down. The queue on the phone if it works can be up to an hour. The local office is closing soon and they cant deal with the complaints, never mind the day to day issues. She also couldn’t open the emails I sent her – IT problems that she cant get resolved.

At least she could accept emails, the last one I dealt with asked me to fax her the stuff – I asked if we were in the 1970’s. She didn’t get it when I suggested a telex machine or pigeons.

Staff are under paid and not motivated. Compete nightmare.

Good luck 🙂

Re the 15% – no, they can impose/charge but they won’t seek to collect. It will all come out in the wash and be revised when agreed so at that point it will or won’t be due. If you have any fears it will be then pay it on time and you will get that back if it proves not to be due.

Sandwich, is on the right track. The P45 from company A would be included in your total income shown on your P60 from company B. Even if you didn’t pass the P45 onto the new company they will have received it direct from HMRC via the RTI system.
If you can’t figure it out see an accountant to sort it for you. It will be quicker and cheaper in the long run as well as saving you the headache.