On Sat, 23 Jan 2010 11:14:27 +0000, MM wrote:

I've just been on the phone to the HMRC since I received this morning
two revised tax notices for 6th April 2009 to 5th April 2010. These
new codes meant that I would have to pay 20% of tax on my private
pensions, but, as I pointed out to the HMRC, I do not receive income
in total that is more than my personal allowance (by far). My details
haven't changed in three years, either, yet the HMRC computer still
issued these revised tax codes to give it, wrongly, the benefit of 20%
tax.

The assistant checked my details through the computer and changed the
tax codes again,so that I no longer pay tax on these pensions, as has
been the case since 2006. When I asked the assistant how these errors
had occurred, she simply said, umming and ahhing, well, the computer
is supposed to calculate the codes automatically, but somehow it
failed this time.

Really ****es me off that they can get such a fundamental thing wrong.
Still, I suppose it's good that they work on Saturdays.

MM

Ignore any coding notices from HMRC until near to the new tax year and
then, if the last coding notice you received is wrong, phone HMRC and
get them to correct it in time for your first pay day in 2010-2011.

Below are two messages from a respected tax expert:

"I posted a little while ago with a warning message. HMRC has already
warned us that there will be a shake out for this year only as a
result of the new computer system being in use for the first year, so
they predict possibly double the number of notices of coding and fully
expect quite a number to be wrong as the duff data received from
employers starts to get weeded out. Some members have already
expressed dismay, but in my view the new system has to start somewhere
and in warning the professional bodies and Working Together nice and
early, and provided they deploy enough staff to cope with it I think
they are on message here. We'll be carrying articles in February when
the TR's are done setting out things to look for and what HMRC
recommends should be done."

and

"How would you review and then issue 25 million notices of coding
before 5 April? Who would be able to do this without detailed
knowledge of each taxpayer's records - which each taxpayer has.

A lot of the duff info is in relation to P45's which have gone
walkabout so lots of people are getting notices in respect of jobs
they have left in the last couple of years. Now that P45's are online
this should flush out that aspect of it. HMRC's early message is to
sit tight for a bit and see whether any more come which correct the
position - hence in my view hang on until Feb and start then. There
will be articles on site on Monday 1 Feb with full details of what
action to take.

I don't dispute that this is frustrating and a potentially major
issue, but I also don't see any way of getting from where we were (no
tie up between employments for each person) and where we need to be
(whole taxpayer records) without some aggravation. HMRC's systems for
PAYE were as old as the ark and I for one am pleased that the
investment has gone in to completely redesign and rebuild from the
ground up. I do not think this is HMRC incompetence - nor do I think
it is done to deliberately wind up accountants. It just has to be done
and we have to get past it."

My response was as follows:

"This is NOT an acceptable way of dealing with the problem
If HMRC think the notices are likely to be wrong they should issue a
covering letter explaining the situation in detail. This should ask
taxpayers to review the notices and give the phone number of a
helpline to report any errors. Taxpayers think that anything from HMRC
must be correct and any error must be down to themselves or their
accountant. The notices don't admit the problems and I feel this is
unacceptable. It causes distress and worry to taxpayers and
demonstrates HMRCs cavalier attitude to taxpayers and agents."