Your pay in their (HMRC's) hands

20 October 2015

Gary Heynes

Many will be familiar with their tax coding notice and will accept that there is little that can be done to change a code which is seemingly correct. However, what if the code is right, but unfair?

We are aware of a case where the current year (2015-16) code included the underpayment of tax for 2013-14. The individual then, dutifully, filed their 2014-15 tax return soon after the tax year-end, on which he self-assessed some additional tax due. On receipt of their next payslip they were surprised that their net pay had been reduced on the basis that their code had been changed. HMRC had been quick off the mark to inform the employer there was more tax due, now for 2014-15, and started collecting this too. The individual had not yet received their copy of the new code.

A phone call to HMRC corrected the matter, with HMRC agreeing to remove the 2014-15 underpayment so that just one year’s underpayment was being coded out. For anyone enduring the long waiting times trying to reach HMRC by phone to discuss a coding notice, they will know that this is time consuming and frustrating. Many will have simply accepted the new code and extra deductions in their monthly pay, but there must be a better way to deal with issues like this which are in the taxpayer’s favour rather than HMRC having arbitrary control?