I’ve just been on the sharp end of HMRCs rather dodgy tax computers. I read stories about them spitting out incorrect tax codes and causing all sorts of mayhem, but I never thought it would happen to me.
I turned 60 in November and started to receive a tiny pension from an organisation I worked for (for all of 6 months) nearly 30 years ago. I’m now getting the princely sum of £140 a YEAR! Their pension fund notified HMRC, who’s computer, it seems, decided I was working for two employers and they would therefore tax me at 40% on all my income from both, back dated to 1 April 2012! Basically, I wouldn’t have been paid anything this month.
Fortunately, our Payroll people at University of Manchester are on the ball – they’ve had this happen before. They contacted me straight away and I got onto HMRC and after about 3 hours wrestling with their awful call mis-handling system and two attempts to get a fax from them through to our people, I managed to get it sorted.
Even if I was working for two employers in PAYE-able employment, I’m not sure why they’d handle it in this way, given I’m already in full-time employment? Nor can I see how their systems can mistake a £140 a year pension for a second job?
My guess from their response, when I rang up and finally got through to a human being, was to sort it straight away, almost without question. This suggests they are well aware this is a common problem. I’d be interested to hear what the stats are on these sort of errors, if anyone’s got them?
Given the challenges HMRC faces in the next few years, what with little changes like Universal Credit, Child Benefit and others coming down the track, this doesn’t bode well. An interesting interview with Lin Homer, head of HMRC, appears here. Let’s hope she can do a better job of sorting HMRC out. If my little experience is anything to go by, there may be trouble ahead, to put it mildly.