Reply to: New Trick by HMRC?

[centurian]

I write it myself and label it as being done by her - for record, but make sure she knows it. I dare Hector to engage with her on how software is written or what she has written - she will give them a headache. As she knows the line of work (writing/designing software systems) and I work from home almost 3 times a day - I have a bullet proof case. That is also my defence for S660A.

Ah, you mean you're going to wear a wig and lipstick - that old trick. Remember to tell them you're having a domestic argument so as to explain why the "two of you" are not in the room at the same time.

[Clippy]

HMRC always screw up my coding notice, without fail, every year.

I normally refer it to my accountant to sort out but then spend ages having to chase them, because they insist on writing to HMRC and not calling them, to find out if they have sorted it.

If I call HMRC, are they really that helpful/efficient that they will amend it there and then on the phone?

My most recent coding notice, the third one this year, is sat on my desk awaiting amendment but I have not progressed it with HMRC directly or via my accountant because of the headache it causes.

[Martin at NixonWilliams]

Hi - I need some advice on how to tackle a situation I find myself in.

Background - I am an IT contractor and I have a Ltd co. with myself as the Director and spouse as 50% as shareholder. I also paid my spouse a salary of 6k in the year 2010-2011. The company was set up in March 2010, so till now no accounts, returns have been submitted.

My spouse received a letter from HMRC telling her that her tax code was being changed. The letter exactly as it is worded below


Your personal allowance 7475
employer benefits -2173
tax free amount 5302

If we have got this wrong, or if your circumstances have changed and you think it could affect the tax you pay, please tell us. Our phone number and address are above. We turn 5302 into tax code 530L to send to xxx ltd. They should use this code with the tables they receive from HM Revenue and Customs to take off the right amount of tax each time they pay you. We tell xxx what your tax code is but we do not tell them how it is worked out.

And then a note which got my attention

We have to see if anything should reduce your tax free amount. You have to pay tax on the value to you of benefits, or expenses, provided by your current or previous employer. If want to know precisely how we have worked out 2173, please contact us.

The reason I think this is fishy is - the company has not filed any returns so on what basis have the worked out 2173 as deductions from her personal allowance. Also, she has never claimed any benefits / nor she has any other source of income.

I called my accountant, but he is away on holidays and will be returning in 2 weeks time. I am not keen to start a conversation with HMRC where they will start asking all sorts of irrevelant question. I wonder if they are on a fishing trip to glean some information that they can use later i.e for S660A / IR35 etc.

Any opinions, comments, advice most appreciated.

Cheers

Sounds like a simple HMRC error to be honest, as mentioned previously a call to HMRC stating she has no benefits should suffice and they will amend/reissue the coding notice to her.

Martin

[d000hg]

I get her to write code sometimes - to be honest, most of the times I write it myself and label it as being done by her

I would be more cautious even on an anonymous board like this to say such things.

[SueEllen]

I checked the tax reference - and it is the same as the tax reference on my P35. Its possible that my accountant would have submitted a P11d and HMRC just cannot read it properly.

Forward it on to your accountant with a note that HMRC are writing tulip to you again.

[Wobblyheed]

Don't panic. HMRC regularly issue coding notices which are wrong. Call them up and tell them she has no employee benefits and they should change it.

Very true - I've phoned them a couple of times now and they'll just change it there and then.

[Sockpuppet]

Did you submit a P11D for her?

[FreeAgent]

All many thanks for your response, my blood pressure is now normal. I must stop reading conspiracy theories!

Does she really earn 6K's worth or are you claiming book keeping and answering the phone etc?

Yes. I make sure that she earn her share - so all the documents, power pointing and some libraries that I use are written by her. She used to be in the same line of work - so I get her to write code sometimes - to be honest, most of the times I write it myself and label it as being done by her - for record, but make sure she knows it. I dare Hector to engage with her on how software is written or what she has written - she will give them a headache. As she knows the line of work (writing/designing software systems) and I work from home almost 3 times a day - I have a bullet proof case. That is also my defence for S660A.

I checked the tax reference - and it is the same as the tax reference on my P35. Its possible that my accountant would have submitted a P11d and HMRC just cannot read it properly.

[BrilloPad]

Don't panic. HMRC regularly issue coding notices which are wrong. Call them up and tell them she has no employee benefits and they should change it.

exactly. my ex works for HMRC and changed someone's tax due to zero. mistake only discovered when the person complained....

[stek]

Does she really earn 6K's worth or are you claiming book keeping and answering the phone etc?

I'm interested in the answer to this one!

[Alan @ BroomeAffinity]

Check the references on the letter. Its not unheard of for HMRC to issue correspondence to the wrong person. One of my clients - a one man ltd co - received 300-odd coding notices for employees of a completely different company.

[RSoles]

I get that letter at least once a year. It's as if they don't read my P11D.

[doodab]

The company will have filed monthly PAYE returns and also an annual PAYE return for the tax year just ended.

The "employer benefits" amount relates to the value of any taxable benefits she receives from your company e.g. health insurance, company car, company phone etc. If it's wrong you can get them to change it now or it will all get sorted out at the end of the year and she'll get a tax refund. £2173 is probably just a wild guess from HMRC but it could also be based on last years return.

[northernladuk]

Does she really earn 6K's worth or are you claiming book keeping and answering the phone etc?

[Alan @ BroomeAffinity]

Don't panic. HMRC regularly issue coding notices which are wrong. Call them up and tell them she has no employee benefits and they should change it.