What we do
archived case summaries
ESC A19 case summary 2
Mrs H's employer provided her with a company car and fuel benefit. Over a period of several years, her employer provided the Inland Revenue with all her correct details at the right time but they repeatedly failed to update their records correctly. This meant that her tax code included an incorrect figure for car benefit and no adjustment at all for fuel benefit.
Once the Inland Revenue realised their mistake, Mrs H was left with a large and unexpected tax demand. She claimed that she had thought her tax code was correct because she believed that the car benefit element also included fuel benefit. However, a simple calculation would have shown that the figure quoted on her notice of coding was much lower than the amounts shown on her P11D forms, which she received annually from her employer.
We did not uphold this complaint.
We agreed with the Inland Revenue's view that Mrs H did not meet the conditions of ESC A19 on the grounds of 'reasonable belief'. Over the period involved, Mrs H had received at least 10 items of correspondence from the Inland Revenue, each of which gave details of the benefits included in her tax code. All of these items clearly stated that the onus is on the taxpayer to check that the information held is correct. We felt that the Inland Revenue's mistake would have been obvious, if Mrs H had carried out this simple check.
Although we did not recommend the Inland Revenue to give up Mrs H's tax arrears under ESC A19, they clearly made mistakes in their handling of her tax affairs. We considered that their offers to apologise to Mrs H for their errors and pay her compensation of £125 were, in the circumstances, reasonable.
