By Claire West
HM Revenue & Customs (HMRC) must ensure it is able to deal with the inevitable flood of queries from tax payers who are concerned that they may have to pay up for Pay As You Earn (PAYE) mistakes, says the Association of Chartered Certified Accountants (ACCA).
ACCA's head of taxation Chas Roy-Chowdhury says: “HMRC’s recent announcement is worrying for many ordinary tax payers. While it is important we pay the right amount of tax at the right time, it is also important that our tax authority bills us correctly and keeps correct records.
“It is also important that HMRC is geared up to deal with this mistake. I am concerned that they will not have the number of staff available to deal with queries from those who don’t want to use HMRC’s website. This will only add to people’s frustration.”
Chas Roy-Chowdhury adds: “This issue highlights the problems caused by the complexity of the UK’s tax system. Only today we also hear that millions of pounds are owed to those who do their own tax returns due to errors in the self assessment system. Self assessment tax payers and employers are clearly having problems with tax codes. I know that many will be asking whether they can trust the UK's tax regime.”
While there are not many options available to the taxpayer in this PAYE situation, Chas Roy-Chowdhury recommends that tax payers equip themselves with all the facts if they fear they cannot pay.
Mr Roy-Chowdhury says: “HMRC has a ‘time to pay strategy’ in place and tax payers should be aware of it and call HMRC on 0845 302 1435 — this may be listed as the business support helpline, but it is for individuals as much as businesses. All taxpayers should be given a sympathetic hearing.”
Chas Roy-Chowdhury says that alternatives may be sought for the future to ensure such a situation doesn’t happen again: “If the system can’t be trusted, then the only alternative is a wholesale overhaul — but this in itself will be costly for the Treasury. The last thing we want is a full Self Assessment return to be completed by everyone. But a one page simple return may be the only choice we have in the future. This will not be at all palatable - but might be the only way to prevent such a nightmare scenario happening for ordinary people again.”
The advice for those who receive a PAYE demand is:
If you don't trust the taxman's judgement, seek advice from a professionally qualified accountant or from the Citizens Advice Bureau.
If you cannot pay the full amount, negotiate a suitable timescale. It seems likely that HMRC will negotiate, but this will be on their terms. The link to HMRC’s website is helpful as a starter: http://www.hmrc.gov.uk/payinghmrc/problems/cantpay.htm
If you speak to HMRC, keep all records of phone conversations - time and date them and get a name, even a first name, if you speak to anyone.
And in the future, always check your own tax code which can be found on payslips - don't just leave it up to your employer or the taxman. A guide to tax codes can be found at HMRC’s website at this link: http://www.hmrc.gov.uk/incometax/codes-basics.htm