Mistakes happen – but should you pay the price?

Date posted: 3rd Oct 2018

It’s that time of year when HMRC issue tax calculations to PAYE taxpayers for the year to 5 April 2018 advising them of any overpayments or underpayments of tax.

Receiving a calculation advising that you have overpaid tax is good news (assuming it’s correct!) as you’ll have a tax refund due to you. However, a calculation advising that you have underpaid tax can be frustrating and annoying, particularly if you didn’t expect to have underpaid tax and believed that your employer or pension payer had deducted the correct amount of tax at source.

If you receive a calculation showing an underpayment, you should be aware that this could be appealed against if either HMRC or your employer have made an error that has led to the underpayment arising. Such an error could be HMRC issuing an incorrect PAYE code despite having all the details of your income or your employer operating an incorrect PAYE code i.e. not one issued by HMRC.

There are strict conditions to be met, but our tax team have appealed against such underpayments in the past and have managed to obtain HMRC agreement to either write off the tax liability or seek the payment of the tax directly from the employer.

If you receive a tax calculation from HMRC and would like some advice on whether this is correct and could be appealed against, then please do give us a call.

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