Overpayment of tax

In message , snipped-for-privacy@yahoo.co.uk writes

Cant believe that the NUT are happy to take advertising money off a bunch of crooks like this.

I don't know the firm, but my hunch is that most of the teachers for whom they secure tax refunds had not been claiming relief for NUT subs. (Teaching unions are one of the few categories where union subs are usually tax deductible). If they then reclaim for the last 6 years subs (you can usually only go back 6 years), then 22% or 40% relief on that lot could easily be 200.

I very much doubt that councils are incorrectly processing payrolls - they will merely be applying the tax codes notified to them by HMRC.

Why not check whether your wife is claiming and getting relief for her NUT subs - and also her annual GTC fee - and if not, get her to write to her local tax office, quoting the amount she has paid for each of the last 6 years, requesting a tax refund, and asking for her Tax Code for 2006-07 onwards to be amended.

If successful, I'll be happy take 39.9% :-)

HTH

They claim that around 69% of NUT members who have used their service have recieved a tax refund - the average being about 200, but some running into the thousands!

Now I have a few questions about this.

- Firstly, just how poor are the council payroll depts, if over two thirds of their payroll are being paid incorrectly?

I seriously doubt that two thirds of the payroll are being paid incorrectly. Note that the claim (which, given that it is in an advert, needs to be taken with a large shovelful of salt in the first place) is that 69% of NUT members "who have used their service" got a refund. The people who use their service are probably the ones who suspect there might be something wrong with their tax in the first place. There are no doubt thousands of other NUT members who have simple tax affairs, have paid the right amount of tax, and would never dream of using their service.

Adam

Check that tax office are deducting subs to union. If teaching a practical subject that special clothing is being claimed for. If a 40% tax payer check that pension contributions are being correctly claimed for. You don't need a company to charge 40% for doing this, you ca do it yourself.

A *teacher* a higher-rate taxpayer? Are you some kind of comedian?

This is the standard method of charging for such checks.

What makes you think that it is crooked

(and I was going to say that I presume they were just going to tell people to claim some deductions for their professional and magazine subscriptions but I see someone has done that already)

tim

I assume he meant that while the service is legal he considered it immoral. Rather like the companies that will register you with the TPS/MPS for a fee, when you could do it easily yourself for free.

No I'm, not a comedian I'm a teacher.

I am a head of dept in a state school and have paid the 40% rate for the last 4 years. An unpromoted teacher at the top of the pay scale gets over £30,000, so most promoted members of staff are into the 40% bracket.

Yes, I'm quite aware of the semantic reason why he thought it crooked, I was hoping for more explaination.

But unlike registering with TPS, checking a tax return/ coding requires some specialist knowledge that the potential customer doesn't have.

Anybody who thinks that they can diy this task is free to do so, they don't have to engage the services of an agent to do it for them. But if they do engage the agent he has to be paid for. This task will likely take around an hour of someone's time plus his travelling costs to you home (I assume that this is the model) so a reasonable fee is going to be at least 50 pounds. How may people do you think would take up this service at that fee level given that not all customers will see a tax saving. ISTM that payment by percentage of results is the only way that this service is financially viable, so what's the problem here?

tim

One possible retort to that is that you've just shot yourself in the foot, and now everyone will think teachers are overpaid [which they probably thought already anyway "just look at the holidays they get" etc].

Another is that you're a non-representative sample and therefore don't count. Promoted teachers aren't real teachers, they're more like politicians [well OK, that's a bit harsh, let's say managers then]. Real "face-worker" teachers don't pay higher rate tax.

It doesn't make my advice any less relevant, there is the possibility that the wife of the OP may well have a promoted post.

You mean because if she delegated the task of finding out what's what to her husband, this is indicative of her managerial skills? :-)

Yes, I accept it's possible, but on the balance of probabilities I suggest the possibility is remote, not least because in that case she might be likelier to know about such matters already.

There's an old saying, "when you're in a hole - stop digging"

Teachers are comparative well paid. Outside of London and the south east there are far more teachers than jobs. Many take on learning support roles being paid 1/3 of being a teacher.

Their starting pay is reasonable and are immediately on a pay scale with a respectable maximum. There is then performance related pay before being promoted into head of year or head of department. I wouldn't call a head of year a managerial post. If you're any good, keep your nose clean, and want to get on then a post of head of department is not at all unrealistic. Many though sit on their backsides and take their pay, it's very difficult to get rid of teachers, or at least without significant expense.

It is very unlikely that this is the case.

A lot of these refund agencies are scams. They put in claims for lots of expenses against your income which aren't allowable, like travel from home to work.

HMRC have a policy of refund now, ask questions later, so the agency gets the refund, then later on when HMRC look at the claim and discover that it is complete rubbish, they come back to you asking for the money back. By this time, the refund agency will have vanished, and you will be out of pocket.

But if you are a 40% taxpayer, it is more likely that the PAYE system will deduct too little tax than too much. The tax on your payroll earnings will probably be right, but you will have additional tax to pay on other things like bank interest.

Tthis type of tax advice can come at a high price, and it seems a pity that people can end up paying so much for advice that's free from Inland Revenue staff.

Companies like PTS may well adorn their websites with photos of angry looking staff 'berating the revenue', but the reality is that nobody in the Inland Revenue wants anyone to pay more than they are due. They might just simply not know something about yourself that you do.

If any teacher thinks they might be due a refund, they should get in touch the Revenue themselves first, and see if they can come away about

You'll need to have your National Insurance number and employer's tax reference number to hand. (Get the employer's tax reference number and tax office phone number from your payroll department if you don't know it or you've changed job since your last P60.)

The sorts of things that PTS will ask the revenue to check for are:

• Professional body subscriptions not being included in your tax code as they didn't know you were paying them, where these are necessary for your job and not paid by your employer

• Them not having complete employment history, resulting in a main job being taxed at BR as if it was a second job, or a week one 'Emergency' code being operated at a main job you only had part of the year.

• You having given up work part way through a year having paid tax

• You or your partner having claimed your full entitlement to Childrens Tax Credit for the couple of years immediately preceeding the 'New' Tax Credits system when it was paid through your tax code

• You having to pay for the laundering of a uniform with a logo on it, where your employer doesn't provide facilities and you couldn't wear the clothes outwith your work

• You *having* to use your car for your work (not commuting sadly :) ), but your employer not refunding the mileage at the full Inland Revenue approved rate

• You having previously used to have a company car, and your tax code not being changed when you gave it up.

• You being on low earnings (less than about £6500- changes by year) and paying tax on savings, or on low earnings overall after taking into account earnings from more than one job and paying tax at BR on a second job.

There's lots more reasons, so if as PTS suggest there may be something that you or the Revenue miss, you can always go back and ask The Tax Refund Company aka Taxbuddies aka Personal Taxation Services to check later, once you've claimed 100% of any refund you know you can get yourself!!

The biggest successful claims usually arise from cars incorrectly coded, being on a BR code at your main job for many years, or not having CTC in your tax code for the couple of years before the new system came in when it was claimed that way.

The vast majority of claims are however for for things like professional subscriptions, and although they aren't worth much it does add up if you've not been claiming something for 6 years.

Of course you might might find listening to a few minutes of Revenue muzak too much for you and prefer to use an agency anyway. If you do, please be careful as there's very many out there, with varying standards of practice.

Things to beware of:

• Find out who your dealing with; who is the individual dealing with you? Check that they've got the qualifications they claim before signing anything authorising them, and check that anything they ask you to sign looks reasonable. It's no use a company having a picture of their one qualfied member of staff on the website if the work's actually done by 100 people that don't have a clue.

• Check that they have maximum fee. If you've been on the wrong tax code for six years you could have a claim worth thousands that isn't any harder to make then one for a few hundred. If they charge a standard percentage with no maximum you could end up paying an enormous fee that's really disproportionate to the work involved.

• Make sure they will automatically return your documents to you without you having to chase after them

• Check where the company is based. There are some web-based organisations that are entirely outwith the UK and even the EEC, apart from a post box and a redirect non-geographical phone number. If you sign your refund over to them and then have problems it could be difficult or impossible to seek recourse.

• Beware of the too good to be true claims, and people abusing the Self Assessment procedures. As posted above, the Revenue will often repay now and ask questions later, so that the vast majority of legitimate claims are dealt with faster. Don't be caught out by less than scrupulous people that will obtain a refund by filing a Self Assessment return showing large spurious expenses, take their cut, and then leave the IR to chase you for the full amount back after they've head for the hills!

• Make sure that the agent will take steps to stop the overpayment happening again, not just invite you to make another claim with them in a years time so they get another commission.

• If it all starts to go wrong, contact your tax office immediately

I'm afraid you'll find that the PTS service slips up on a few of the above pointers.

Also remember - if you find out you've been paying the wrong amount of tax, that doesn't necessarily mean it was too much!!!