Victory for our readers: HMRC backs down in £70k PAYE dispute
We help people sort out their problems with HMRC, here is just one story, we help thousands of people every year.
After starting his job as a manager in a department store Simon* was surprised when his first payslip showed no tax had been taken away. His employers told him he was self-employed, Simon did not agree.
Simon did NOT however inform HMRC of the situation and ended up NOT PAYING ANY TAX FOR SEVERAL YEARS.
HMRC then turned around and said “We believe you have been an employee all along!” And asked him for a whopping £70k in understated tax plus interest and penalties.
That’s when Simon found this site bought the ebook, Everything you wanted to know about a tax investigation but were too afraid to ask, and booked in for a free 30 minute consultation with our tax expert.
Our tax expert picks up the story, “I pointed out to HMRC that the employer was liable for the tax unpaid as they had failed to recognise Simon’s proper status and to deduct PAYE.
“HMRC could direct that the taxpayer was responsible for the tax loss but only if the employer’s failure was an honest mistake or they could not pay the liabilities and the taxpayer knew the employer had wilfully failed to deduct PAYE.
“There did not appear to be a formal direction by HMRC here and if they issued one we would appeal it. HMRC should be aware that Simon could not pay the liability.”
A year passed while HMRC considered the problem and failed to give any substantive response.
Then they abandoned the investigation and wrote-off the £70k ‘owed’.
Simon is very happy that he bought the ebook and had our help.
Why did HMRC chuck in the towel?
- HMRC had failed to undertake the correct process with the employer or employee./li>
- If HMRC had been doing their job properly it would have been unlikely for the employer to escape liability.
- Simon lacked the funds to pay the tax.
- If HMRC had proceeded Simon would have had strong grounds for complaint.
*Some personal details have been changed for anonymity.