Q&A Tax chaos: What happened and what you need to do next

After last year's "revelations" that MANY "public servants" have been receiving substantial BONUSES for doing a very straightforward clerical/supervisory job, has anyone any idea how much senior HMRC "Executives" have been handsomely rewarded for doing the job we pay them for? Or, perhaps more accurately, for NOT doing the job etc etc...

Quite right George. I don't see anyone will hand their bonus back for a job NOT well done.

I also won't be holding my breath waiting for some senior executive at HMRC fall on his/her sword and resigning over this.

time for a revolution

remember the poll tax fiasco

we get fined for making mistakes on our tax returns what happens to staff at hmce they get rewarded with a bonus get rid of the tax system and replace it with vat then what you earn is yours to spend as you wish we would save afortune on tax inspectors

How the hell do you get a bonus for showing up for work?

Never mind the hellish size of Civil Servant Pensions....more exposure on

these please, how on Earth this Largesse has been allowed, and I am very

sorry, but the reality is -- lets claw back 25% of that, and then our bankcrupt

kingdom will be solvent , bloody feather bedded parisites/

The last governments answer would be to fine HMRC - that always worked didnt it? Maybe this government will do the same. Moving our money from one dept to another sounds like a great idea - I would even offer to manage it for a modest £100K.

Am I mistaken in assuming that the government invests power in the HMRC to collect taxes on it s behalf?

Taxpayers do not have any say in the amount of PAYE is collected from earnings - this is decided by the HMRCPAYE - this is their problem!!!

Why should we be penalised by this gargantuan organisation which cannot do the work it is paid to undertake?

If this happened to the French, you can bet your bottom dollar/pound/euro that the citizens would be out on the street, protesting about this massive mistake by an organisation which is paid for by the taxpayer.

Abolish PAYE - people can then decide whether or not to use that money towards their pension, health insurance etc - we have bloated organisations all paid out the public purse, & all they do is make the taxpayer suffer when it is those at the top that have created the problems in the first place. How many politicians will be affected do you think? or will they be exempted by the organisation they set up????

Increase INDIRECT TAXES and greatly reduce DIRECT TAX? Sounds like a good idea – but it's not as, unfortunately, it has great flaws. Indirect taxes are regressive since with we peasants pay a greater proportion of what income we DO get in indirect taxes (VAT?) Even the rich can only eat so many meals a day and fly so many miles in their private helicopters but THEY gain MILLIONS through lower direct taxes. Take fags and booze duty taking up a bigger proportion of disposable income of the worst paid. But that's another story...

The author says, six million people who are taxed via PAYE and have tax deducted by their employers (using HMRC's tax codes) are affected. What about the large number of pensioners who have tax deducted by pensions companies e.g. Canada Life? Are these part of the six million, or just being overlooked?

I for one have pensions from two sources and the tax codes (issued by HMRC without asking me) are each different - and different again from the one HMRC tells me?!

Another annoying thing is that HMRC charge 3% interest on tax owed but only pay 0.5% on tax overpaid. They justify this saying that commercial organisations charge and pay these rates on loans and deposits. However, those 'commercial organisations' are banks whose income comes from the rate differential. There is absolutely no justification for HMRC having such differentials. Aguably, any such differentials should be the other way around as HMRC is using taxpayers as a bank.

I retired in August 2007, at which time I started to receive an annuity and a small occupational pension. There was a small underpayment of tax that year as the organisation paying me the occupational pension were not sent a tax code promptly. However the fun started in 2008, when I took my state pension, having delayed it for a year to increase the amount payable. Since then HMRC have issued 10 Notices of Coding. At one point, last year I thought they had got it right, but they then issued a new coding, which meant that not enough tax was deducted from my annuity.

That has now finally been sorted, so I am paying the right amount of tax, after three years. All along I kept telling HMRC of the situation and how much tax I should be paying. Should I be paid for doing their work for them?

By the way, did Rose G, above, when she suggested abolishing PAYE, mean that she would prefer to pay her tax in one or two hits at the end of the tax year, rather than in instalments by PAYE? Or did she mean that tax overall should be reduced, so that we can organise our own pensions and health insurance?

"In the world nothing can be said to be certain except death and taxes. " (Benjamin Franklin)

Now there's only death.

Income tax was introduced originally to fund wars for the various game players - in this day & age, I have no wish to fund any war, let alone fund infertility treatment, or any other such treatments which I have no need for.

NI contributions are supposed to go towards pensions/nhs, not sure what else: we need to be able to choose where we spend our money - governments change every 4 years, & with each change in government, we have a change of policies, depending on whether or not those governing are for or against public services.

Taxpayers have to contribute to the work shy & the idle, those who choose to have babies outside of relationships, those who think single parenthood is a way out of their current situation - these are all funded by the public purse - I have no choice about what governments spend my tax contributions on - one of my biggest bug bear is money spent on funding wars - those wishing to conduct wars should put their hands in their pockets, I want no part of war, & I wish not to have my contributions abused to oppress nations who are not signed up to the British or American way of life!

I already pay into a pension: many people rely on the state to give them a pension, & not a very good one at that - reliance on continuing with patriarchal attitudes mean that successive generations are paying for the current lot of pensioners, while government actually erode the amount of the state pension by frequently changing the goal posts - I except that in a changing climate, we need to embrace change - but what I have seen of successive governments in the last 25 years of so, gives me absolutely no trust in those at the top.

PAYE is deducted from my earnings even before I can touch a penny of money I have earned - I know the situation in other countries is no better, but I am ashamed that we do not take to the streets at some of the policies that have been implemented with changes made by those with more testosterone than common sense.

We are fools to continue to let others make our lives miserable - I would like to make provisions for myself & my family with my earnings: let me keep my earnings so that I can do so more effectively than any government would be able to.

Dependence on welfare means that we bear the burden of paying for all those who sign up to the benefits culture: someone interviewed by BBC Nick Robinson was happy to contemplate cuts in benefit, but when asked if they stopped giving out benefits like TV licence for the over 65, or freedom passes for travel, or winter fuel, she was not so happy - in fact she believed she was entitled to these, they were not benefits!

Why should taxpayers money be used to fund the expat brits living abroad, so they can still be eligible for free treatment on the NHS, or why should pensioners with a reasonable income be given a winter fuel allowance?

It makes no sense to have universal child benefit: abuse of this benefit alone means that many people from the EU can claim for families who are not even in this country!

PAYE is robbery, & to be told that we should expect to have claims made against us nearly 2 years after the event, is daylight robbery - to be told that they will charge you interest on the amount owed, demonstrates that thieves are not concerned about their reputation, just in collection revenue.

Governments should be ashamed at how they conduct themselves, moreover, this coalition government will be responsible for even more damage as thatcher, if that is possible!!!!!

ROSE G (Telegraph or Daily Mail reader?) might have SOME relevant$ points BUT misses out totally on the main ones. QUOTE "I have no wish to fund ... any such treatments which I have no need for." Goodness, how selfish can you get ROSE? Ask a cross section of the idiot citizenry of our country and the answers will come back that !) They don't want libraries. Don't use 'em or possibly don't (can't?) read) books 2) Public transport? Got me car and don't use buses. 3) Hospitals? Never ill! 4) Better schools? "No kids or they've grown up now. I don't care." I could go on... and often do!

What a selfish society we have today. Thatcher used an expression about "letting you keep more of your money to spend as YOU want". Sounds OK but... scratch the surface and it is hugely fllawed. THAT attitude ONLY helps the very well off. The "extra" dosh Thatcher wanted you to spend "as you want" - was PEANUTS compared to the huge benefits that EVERYONE would (did) lose in the way of civilised public services. But the already rich benefit greatly. Not the few measly quid that reduced direct tax affords. Perhaps THAT'S the clue. Now I'm no advocate on behalf of many loony ideas but this is supposed to be a civilised society not... devil take the hindmost. I'm happy to reach down and help the less fortunate - or even the old who funded previous generations' pensions over the years...

Thank you Rose G for amplifying and clarifying your comment.

As I suspected, your complaint is partly against the principle of paying Income Tax, not just PAYE. You also mention National Insurance, but I am not clear if you object to paying it. There are of course indirect taxes such as VAT, Excise Duty and Vehicle Tax. You object to having no say in how all these taxes are spent. Of course, you did have some choice at the last election, having listened to or read the manifestos of the various parties, but it is possible that you agreed with none of them.

PAYE is only one method of charging Income Tax. You, like me, have always been an employee. Others, such as the self-employed, have to file a tax return and pay income tax as a lump sum. But they still pay their taxes and may feel like you about what the money is spent on.

Before the invention of Income Tax, which I think you are right in thinking was to fund a war, taxation was either indirect, such as the Salt Tax or the Window Tax or was raised from landowners, according to the amount of acres they possessed. With the rise of the middle class in the 18th century, who did not own much land, but possessed large sums of cash, this led to complaints that they were not paying their share of the cost of running government. So Income Tax was invented, as a "temporary" method of raising additional money for a war - sorry my recollection of history does not run to which war that was.

In those days, government was confined to such things as law and order internally and the protection of the realm from invasion or threats from foreign powers, so preparedness for war was a central responsibility of a government. Apart from the Poor Law which allowed for a dole of food or money to people who would otherwise starve, there was no provision for care of the sick and poor, so the question of bus passes for all, etc. did not arise.

I am a bit puzzled however by your prediction that "this coalition government" will do more damage, when they are trying to curb many of the very abuses you are railing against. Your comment about wishing to have no part of war suggests that you are a pacifist, so whatever any government does to run the current war in Afghanistan is not going to meet your requirements.

All this is a long way from the question of whether HMRC should be allowed to charge us back-tax when they made the mistakes.

Napoleonic Wars

We have wandered off topic. Like it or not, we elect governments to make decisions. We cannot make each one or it would be chaotic - several referendums ever day with detailed arguments. We don't get to choose individually what to spend taxes on, for the same reason. Facts of UK life, RoseG, though you have some interesting points. There are worse places than the UK, some of which would not let you 'vent' in public e.g. China.

Is it not a sad state when the hard working peple of this country who already see a large proportion of their salary taxed to the hilt and get nothing from the state are being forced to pay back £1400 and at the same time the scroungers, layabouts, druggies, alcoholics and non working immigrants contribute nothing and get 10 times this amount and more every year in housing benefit, council tax benefit and all the other benefits. Makes you sick, dont it.

You think this is bad? I have a home in Spain. Two years ago, the local council (Marbella) overcharged me and my neighbours for local taxes. To get the excess back, guess what? We have to pay the amount we should have been charged. Then, they say, they will refund the first charge! An apology? You must be joking!!!

Still worth reminding ourselves that, historically, UK taxes are not high at all.

Mr Hill - u must live in the channel islands - 55 % of my income went on tax last year inclusive of all the stealth taxes. If that is low, i would hate to live in a country where it was high.

No Jon, I don't live in the C.I.s. Yes, you would hate to live in a high tax country. Earn a lot and one should EXPECT to be taxed accordingly. I remember 19s 6d in the pound...

George, if you can remember 19s 6d in the pound you obviously grew up in the era where social housing was plentiful like my parents where my dad could support the family (wife and 4 children) on one salary, run a car and have one holiday a year. My dad was not in a highly paid job. I have a professional career and i could not make ends meet on one salary so my wife works full time as well. Perhaps if like me you had to pay £1200 a month for a mortgage (3 bed semi) and £200 a month in council tax and £200 a month in travelling costs to get to work u would think differently. I earn the average UK wage by the way and seen no reason why one should be taxed more for working harder to better ones self while others contribute nothing and get all our money for nothing In your era you did not have the millions of workshy scroungers, immigrants, single mothers, incapacity claimants, overseas aid and european union funding to support through the taxation system. It is obvious from your answer that you no longer work as you are totally out of touch with what the working family has to pay today just to get by when you say we dont pay a lot of tax. I cannot even afford to pay into a pension and i dont lead an extravagant lifestyle.

Jon – Yes, as a youngster, I did grow up IN social housing – I didn’t know it was “plentiful” at the time. It ceased being so of course some decades later when council houses were sold off. I bought my first house in the sixties – and, unlike what a lot of contributors say (not necessarily to this thread) it wasn’t easy to get on the housing ladder. Saving (say) a ten per cent deposit was as difficult even then. SERIOUS Sscrifices were needed. I’ve never had to pay QUITE as much for my mortgage but… a divorce meant that even NOW I pay the best part of two-thirds of that TODAY. Council tax too. Being retired with an state pension plus smallish private one means we are not much better off than “average” wages as my wife DOES work full time with the associated expenses involved in that. So your assumption that I am retired is correct but that ”as I no longer work... am totally out of touch with what the working family has to pay today” is way out Jon. I’m in MUCH the same position as yourself. Self-inflicted? Well.partly, of course! I also have two kids – one family with mortgages much like your own although I will admit their earnings are substantial. The other NOT on the property ladder. In “my” era there always were workshy scroungers, and the rest. Maybe not QUITE as “obvious” though – the underclass tend to get a lot of highprofile “blame” (Daily Mail etc) GOOD LUCK FOR THE FUTURE Jon – at least you might have your mortgage paid off before you pop your clogs. I suspect I won’t. LOLl

People who grew up in that era (pre decimal), should surely have paid off their mortgages by now.

I did and have, also on an average UK income.

Now, as a wise old sage once warned me in the 70s, its the council tax that's the burden.

'mortgage paid off'

I should add that this was in double figure interest rate days too.