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The taxpayer was made redundant in March 2008 and asked HMRC to check whether his employer had deducted the correct amount of tax from his redundancy pay.
The department sent him a form P800 showing that insufficient tax had been taken and the taxpayer owed a total of £2 037 for 2006/07 and 2007/08. It was agreed he would repay the amount via his PAYE code.
In January 2011 the Revenue wrote to the taxpayer demanding full payment of the underpaid tax by 25 February. The taxpayer replied that he understood the amount was to be collected through his tax code; the department’s letter had caused him and his family ‘worry and upset’.
HMRC treated the response as a complaint. The complaints handler sent another letter saying the first ‘should not have been issued’. It went on to say taxpayer had overpaid tax in 2008/09.
Taking into...
