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Overpaid tax after HMRC’s tax code error.
I recently asked HMRC not to collect tax unpaid under ESC A19. This was for a client who was asked to settle £16 000 in underpaid PAYE due to an incorrect tax code HMRC had issued to him. The troubling factor here is that under PAYE all income has tax deducted at source and if there is an outstanding liability typically this should not exceed a four-figure sum. In our client’s case ESC A19 was applied for as an option of last resort.
In response HMRC admitted that it had made a grave error. However it was unable to provide any compensation or reimbursement to our client. Ultimately although we accept the reality that this tax being paid was unavoidable the fact that HMRC has escaped punishment for its caseworker’s error seems unfair (even for an additional rate taxpayer which...
