IncomeTaxTrackWorld

Any income tax/ HMRC experts around here?

I’m having a bit of a ding dong with HMRC about an income tax rebate they gave me a few years ago which they’re now asking I pay it back because they messed up. :roll: I’ve appealed that as there’s a 2 year limit on them asking for repayments if it’s been their mistake.

As a side issue I’ve discovered another potential complication!

I was made redundant back in 2018. My last official day of employment, confirmed in writing from my former employer, was March 31st 2018, which was in the 2017/18 tax year.

I physically received my redundancy payment at the end of April 2018. It was over the tax free amount you get as part of a redundancy payment, and the remaining amount was taxed as normal salary. This payment has been processed under my earnings for the 2018/19 tax year

My question is, as my employment ended in one tax year, should any payments have been processed under that tax year, rather than in the subsequent tax year simply because that’s when the payment physically happened? I can’t find anything on line that says redundancy payments should be treated differently, apart from the tax free portion.

for tax purposes it’s always the actual payment date that determines tax year not when payment was “earned”.

And in any case you’d be better of leaving it that way, as adding the redundancy money into the pro tax year could push it into a higher tax band.

In law they have 7 years they can go back if they choose to. Whilst they may only go back 2 years in most cases they can go further back at their discretion. As has been said unless you had significant earnings in 18/19 then you are likely to be better off with the payment on the following year.

In law they have 7 years they can go back if they choose to. Whilst they may only go back 2 years in most cases they can go further back at their discretion.

I’ve appealed against them asking for the tax back more than 2 years after the end of the tax year via the ESCA 19 provision. It was entirely their mistake as they had all the correct info available to them, and they gave me a £10k+ tax rebate which I suspect was based on overpayment of tax on the redundancy lump sum, but they’ve “assigned” the tax rebate on the prior tax year, which they’re now asking me to repay.

it’s the usual utterly shambolic and soul destroying maze of trying to deal with HMRC

it’s the usual utterly shambolic and soul destroying maze of trying to deal with HMRC

That sums it up well.

I was investigated for tax over 3 years when I first moved to Scotland, following a fight for a £1300 tax refund I was owed.
It was claimed I had misreported for 3 years of self employment. The HMRC chappy sat at my kitchen table and went through three years of invoices and receipts over the course of a very long day.
I was 32p out in total. In my favour.

It took months of letters back and forth to sort it.

One set of rules for them another for the rest of us as far as I can tell. You make a mistake (insufficient info in a very complex system) you pay. They make a mistake, you pay.

@TheDTs never a truer statement, I’m currently caught up in the EBT fiasco!