My salary has been wrong for 6 years - who has to pay the tax man I am in the UK?

Question

My company have been administering for salary incorrect for 6 years. They have been deducting my pension contribution from my taxable income and I have been paying tax on the lesser amount. They tell me that as their financial year ends for four years have been closed and agreed the revenue cannot come back and chase me for those 4 years and that I only have the last 2 years to worry about. Is this correct re the revenue and who should pay - I dont think it should be me?

Answer 1

Just to add to the above answers. Unfortunatley it is you that the Revenue will chase, however, if it is a decent employer they would hold their hand up and help.

Most debts are timed limited, usually 6 years from the date that you acknowledged the debt. There is one exception to this....... tax......tax is not time barred at all.

My suggestion is to conatct your local tax office (see yellow pages) or goto the link below to find your nearest tax office. Under the circumstances I am sure that they will look favourably at a time to pay option.

Answer 2

The Revenue can go back 6 years, more if it's a case of fraud (not suggesting this is the case here). Although your company's financial years have closed, this is nothing to do with your personal tax liability.
Your company has been very lax in this and I would say they have a moral duty to meet some of the cost, but legally, its your liability and the Revenue would argue that its up to you to make sure your tax deductions were correct. However, in view of the circumstances, I am sure they will come to a repayment agreement with you to spread this over a period of time, although interest is payable. Maybe you can get your employer to meet the interest?

Answer 3

The tax man can't claim for more than 2 years is also my understanding as if you had been overpaying tax then you would only be able to claim the tax back.

Yes, it is you that has to pay it as you've been being paid too much income if your company are underpaying so really you're just paying back money that should have been deducted in tax in the first place.

Answer 4

your employer made this mistake and you need to ensure that they sort it out. It will be too late if you ever leave their employment. If this was me, I would write to your tax office (your employer will know this) put in a letter clearly exactly what has happened - dates etc are important to distinguish between tax years. Bullet point your comments to make them clear- ask the Inland Revenue (now HM Revenue and Customs) to confirm in writing what action, if any, your employer needs to take - then make sure it is followed up. Get it all in writing.

Answer 5

If it was under a Net Pay arrangement, then why have they done anything wrong?
You're entitled to tax relief on your pension contributions.
Firstly check with HMRC (have you done this yet?) and see if you have any liability.
If you have (and get this checked by an accountant) then you can make an arrangement with HMRC to pay over time.
Take your accountant's advice. There are many ways in which a supposed liability can be mitigated.

Answer 6

Alas its you, although your employer may have a moral obligation to help you out on this.

The Inland Revenue will probably take a fair approach on this and let you pay over time

Answer 7

I suggest u contact the inland revenue about this one.

Answer 8

Check with your local tax or labour authorities for advise.

Answer 9

Shuld be analized by a profesional

Answer 10

its you .... but you can ask tax people to take it out over next tax year