[2013] UKFTT 251 (TC)
TC02665
Appeal number: TC/2012/06196
INCOME TAX – PAYE – Extra-Statutory Concession A19 –
Underpayments of tax - Appellant with two employments – Subsequent adjustments
to recover underpayments - Appellant’s claim to have received wrong coding
instructions – Whether Tribunal can direct HMRC not to collect the underpaid
tax – No - Tribunal has no authority to enforce compliance with Extra-Statutory
Concession – Appeal dismissed
FIRST-TIER TRIBUNAL
TAX CHAMBER
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CHRISTOPHER FLOOD
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Appellant
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- and -
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THE
COMMISSIONERS FOR HER MAJESTY’S
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Respondents
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REVENUE &
CUSTOMS
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TRIBUNAL:
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SIR STEPHEN OLIVER QC
MARK BUFFERY FCA AIIT
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Sitting in public in London on 3 April 2013
The Appellant in person
Mrs KM Evans, Appeals and Reviews, for the Respondents
© CROWN COPYRIGHT
2013
DECISION
1. Mr
Christopher Flood appeals against a decision in a letter from HMRC of 16 May
2012. The decision reads as follows:
“Thank you for your letter of 20 April 2012
asking us to reconsider Extra Statutory Concession A19, which allows us not to
collect tax in certain cases.
We have reviewed your case again but we
still have the same opinion that ESC A19 does not apply in your case and the
tax is still due. This is because we still have no record of any information
sent by you or a third party which we failed to act on.
The underpayment has arisen because you paid tax
at the basic rate of 20% when you were due to pay tax at the higher rate of
40%. We received no notification of your income from London Borough of
Lewisham. Please note that P14 (end of year forms, equivalent to the P60 that
you receive) is not considered as information we failed to act upon. This is
because we receive these after the tax year has commenced.”
2. Mr Flood
explained the circumstances. HMRC were seeking to recover £2615.96 (relating,
as to £2491, for 2009/10 and £124 for 2010 for 2010/11) that they claimed to
have been underpaid through the operation of the PAYE system. He did not
dispute that £2615.96 was the proper amount of tax due on his earnings. During
those years he had had two employments, one of them for one day a week and the
other for four days a week. During the relevant periods he had paid 40% tax on
the one day a week employment (with a university) and 20% tax on his employment
with Lewisham. This, he said, had been on advice from “the tax office”. Later,
he said, HMRC staff had identified that there had been a calculation error on
their part and that he would have to pay the additional amount of £2615.96. To
have to pay that amount would, he said, cause him financial difficulties; his
earnings had dropped by £400 a month because he had been made redundant in May
2011 and he had used the redundancy payment to pay off part of his mortgage and
to reduce financial overheads.
3. Contending
that it was not reasonable of HMRC to have made an error and then to have
expected him to have to make a large retrospective payment at a time when he
was in financial difficulties, Mr Flood referred us to HMRC’s policy rules
(P800 notes 09/11, page 3). These state that “in certain circumstances we
(HMRC) can agree not to collect tax from you or a third party if we have failed
to make use of information from you or a third party for a complete tax year
since it was sent to us and it was reasonable for you to think that your tax
affairs were in order”. (We understand that that statement reflects ESC
A19.)
4. HMRC’s
case is that this tribunal has no authority to give a ruling as to the proper
application of an Extra Statutory Concession (or a statement such as that
quoted in the previous paragraph) which has had the effect of giving a taxpayer
a legitimate expectation. Thus, even if Mr Flood had been given a legitimate
expectation that underpaid tax of £2615.96 would not be collected, the tribunal
had no power to give effect to that expectation. In any event, as noted, HMRC
say that they had not acted unreasonably. They had not been notified of Mr
Flood’s four day a week earnings through the P14 system or at all until after
the end of the relevant tax year.
5. The
operation of the PAYE system in the case of an individual, like Mr Flood, who
has two employments, is by no means straightforward. Precisely what happened
here is not clear to us. He has evidently suffered hardship and inconvenience
and we can only sympathise with him. However, in a number of appeals to this
tribunal (dealt with is the single decision in Prince and others, TC
01852 published in February 2012) the Tribunal has (correctly, in our view)
concluded that it does not have authority to consider the application of ESC
A19 and P800s. Mr Flood has not sought to challenge the correctness of that
decision.
6. Consequently
we cannot intervene here. And, bearing in mind that Mr Flood acknowledges that
£2615.96 is the amount of tax properly due in law, we are left with no
opportunity to make any adjustment to that amount.
7. For those
reasons we are bound to dismiss Mr Flood’s appeal.
8. This
document contains full findings of fact and reasons for the decision. Any party
dissatisfied with this decision has a right to apply for permission to appeal
against it pursuant to Rule 39 of the Tribunal Procedure (First-tier Tribunal)
(Tax Chamber) Rules 2009. The application must be received by this Tribunal
not later than 56 days after this decision is sent to that party. The parties
are referred to “Guidance to accompany a Decision from the First-tier Tribunal
(Tax Chamber)” which accompanies and forms part of this decision notice.
SIR STEPHEN OLIVER
QC
TRIBUNAL JUDGE
RELEASE DATE: 19 April 2013
