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AIBU?

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Original poster

8k possible HMRC bill - help!

93 replies

mummyrabbitpeppapig · 04/07/2017 07:33

My oh is employed and has to drive in excess of 80 miles mon - fri to commute to his place of work ( he's in IT so has to travel out to fix customer problems in addition). He has a company car for work.
It's just come to light that the last accountant was fiddling the books to the tune of thousands so hes gone. The new one has discovered that my oh should have been paying his own company car tax and could have to pay HMRC 8k in backdated tax. He's shick

OP posts:
catlover1987 · 04/07/2017 08:01

I don't understand how this has happened. What do you mean by fiddling the books? Was your DH not given a p11d / did he not notice that there was no paye being deducted for company car benefit on his payslip? Does he complete a tax return?

HotelEuphoria · 04/07/2017 08:04

So, your husband has a company car that he uses for personal use (ie travelling to and from work, as in that is a normal commute) but he has either been claiming mileage for this or not paying tax on the car as a benefit or both?

Either way, seriously you don't just get a freebie car/fuel as a perk with no consequences.

LakieLady · 04/07/2017 08:08

Just asked DP, who is a payroll manager.

He agrees with posters upthread: fess up to HMRC, and try and agree a repayment schedule. Presumably there will be others in the company with the same problem, so hopefully they will be sympathetic. Once he's agreed a schedule, he could ask for it be recovered through his tax code (ie, his tax code will drop and he'll pay more tax than he otherwise would for a while).

However, he also pointed out that it has been common knowledge for years that most company vehicles are a taxable benefit so he should have had some idea that something was amiss if he had the standard personal allowance.

A few years ago, before I worked for them, my employer increased our mileage rate to above the HMRC approved level. Somehow, no-one in finance realised and it was only when I asked when I'd get my P11D that they twigged.

They immediately did P11D's for everyone AND reduced the mileage allowance to the HMRC threshold. Staff who'd been there years were really pissed off about it, but thankfully no-one every knew it was me that brought it to their attention.

Responsibility for paying the right tax is a bit of a grey area imo. Once, when DP started a new job, he realised that his predecessor had somehow been giving staff two lots of tax relief on pension contributions and they had been massively underpaying (lots of people on 6-figure salaries). It ended up costing the company over £100,000 and they couldn't recover it from the staff as it was the duty of the employer to collect the right tax.

PurpleMinionMummy · 04/07/2017 08:11

Confused my dh gets paid mileage for using his own car (pays the petrol then claims it back). I asked him to ask if he needs a p11d but his company said no, should I be worried?!

UrsulaPandress · 04/07/2017 08:11

This happened to me years ago when I was in my early twenties with my first company car. I knew nothing about tax and presumed the company would sort it out. I was called into the tax office and told of the error of my ways. I was mortified.

PurpleMinionMummy · 04/07/2017 08:12

Only for work trips to clients i should add. Not general commuting.

MTBMummy · 04/07/2017 08:13

Definitely speak to HMRC, I had similar earlier this year, we moved house 4 years ago, informed everyone and then I got a pay increase so cancelled our child benefit. Little did I know that HMRC sent a letter saying I would need to do tax returns to ensure everything married up. Until this year. I lost my job and we've started claiming again, suddenly get a letter stating I need to pay 4 years of fines!!!

Called them up, explained, and thankfully they actually had record that the original letter had been returned to sender, so they gave me a couple of months to resubmit. They're reasonable, just be honest

NoFuckingRoomOnMyBroom · 04/07/2017 08:14

No Purpleminion you don't need a P11d for claiming back mileage.

Greyponcho · 04/07/2017 08:15

Sorry OP, it was up to him to take responsibility for his tax. the hmrc will likely adjust his tax code so that he over pays tax for the next few years to make up for the shortfall, (as they did to me when my employer failed to put me on the right tax code with hmrc, so I saved the money to one side and paid it back the following years). Its money he should've been paying anyway, but I can appreciate it must be a shock.
The plus side is that they don't charge any interest for paying it back this way

PurpleMinionMummy · 04/07/2017 08:20

Phew, thank you NoFuckingRoomOnMyBroom

Kewcumber · 04/07/2017 08:22

You make it sound like the company has been paying the tax on his car rather than him personally.

In which case the bill will be because if the company pays personal tax on his behalf then it is additional income to him and he should have declared it in his return and paid tax on that income.

You need to speak to an accountant used to dealing with HMRC on your own behalf not rely on what you're being told by the company accountant - they really aren't tax experts (ex-FD of a company here!).

The figure you're being quoted may include a refund to the company of the tax they've paid on your DH's behalf and I'd argue that was their decision to pay and not yours and that you are only responsible for the underpayment of tax.

Get an independent opinion.

Maxandrubyrubyandmax · 04/07/2017 08:29

Yes he does have to pay otherwise it's tax evasion as with anything else ignorance is no defence, however, on the plus side you have effectively been having an interest free loan from HMRC. Check his tax code just to make sure and his p11d. Phone HMRC explain and the should come to an instalment plan (prob 3years)

superfluffyanimal · 04/07/2017 08:37

You have to pay company car tax so yes YABU.

Can he opt out in future and get a car allowance? Private lease? Company cars are more hassle than they are worth, mine always took months to get Hmrc to calculate and deduct even though advised of car, then a minus tax code (K) for a year then collecting tax a long time after I gave it back. I would advise your DH to contact hmrc and give details of car and when he had it etc

needastrongone · 04/07/2017 08:37

OP - Is the car a company vehicle or does your DH own the vehicle and claim mileage. In addition, was the agreement he paid his own mileage?

I'm really sorry, but ultimately, it's the individuals responsibility to ensure their tax code is correct so ignorance is no excuse in that HMRC won't waive the the charges. They are however far more understanding than you might think and you will be able to agree a payment plan.

Did your DH not get a P11d each year. There's a specific section on company vehicles, I'm a bit agog that your DH wouldn't have noticed he wasn't paying appropriate tax on his car.

This is said by someone who does drive a company vehicle, it take a fair chunk of your taxable allowance, believe me!!

We've had 3 tax inspections in the last 7/8 years, they've only ever found one oversight and this was about the value of the vehicle declared on the P11d form for an employee. It was a genuine error but the company paid the back tax, interest and fine, just throwing that into the mix.

Does your DH self assess then?

Anewcareerforme · 04/07/2017 08:38

I used to have two jobs HMRC got my tax codes totally wrong and I ended up owing 2k, they apologised for their error and have adjusted my tax code to pay it back over two years. The biggest problem is speaking to an actual human being, your DH needs to set aside a good hour to hang on the phone waiting for someone to speak too.

needastrongone · 04/07/2017 08:39

I do agree that it's difficult to advise until you give us the exact circumstances of the arrangement re the car.

ginnystonic · 04/07/2017 08:39

Of course he will have to pay it. The onus was on him to make sure he's paying the correct taxes, not the accountant.

They will work out a payment plan, so you won't have to pay all at once.

Roomster101 · 04/07/2017 08:44

It doesn't matter who made the mistake or committed fraud. If he owes money then he will have to pay it. As others have said, he should be proactive and HMRC will probably let it be paid back over time, maybe via PAYE.

pringlecat · 04/07/2017 08:48

Did the accountant get OH's tax liability wrong through being inept, or did he tell OH it was being paid (through payslips etc) and not pay it over to HMRC?

This difference is important.

needastrongone · 04/07/2017 08:51

But even in that circumstance pringle, you still get an annual letter from HMRC showing your account balance and monies due, it goes to the individual and adviser usually. And they are VERY proactive and chasing money (not so quick to pay it back ime!).

RainbowPastel · 04/07/2017 08:51

Do you seriously think they are going to write off £8k he owes?

Original poster
mummyrabbitpeppapig · 04/07/2017 08:52

He's never had a p11d? He said the employer's fill the p11d in so he never sees it. He uses the car for personal and work use. He claims back the fuel he uses for work. He's not my dh we don't live together. We've been going out 18 months. He's been a bit withdrawn so I asked him why. This all came out this morning

OP posts:
Original poster
mummyrabbitpeppapig · 04/07/2017 08:55

Ouch! RainbowPastel! Thanks for your positive response!

OP posts:
LIZS · 04/07/2017 09:04

He should have had a copy of p11d. Sorry it sounds as if he has turned a willing blind eye to this, at least in part. What is his tax code? Has he paid ni?

LIZS · 04/07/2017 09:04

He should have had a copy of p11d. Sorry it sounds as if he has turned a willing blind eye to this, at least in part. What is his tax code? Has he paid ni?