Driven round the bend

The taxpayer appealed against an HMRC notice issued under IT (PAYE) Regulations 2003 reg 72(5) to pass the responsibility for paying outstanding PAYE tax from his employer DriveHire Nationwide to him.

The problem arose after the taxpayer returned to the company following employment with another firm. His P45 showed a tax code of 489 for which DriveHire used when handling the taxpayer’s earnings.

In May HMRC sent a new notice of coding to both the taxpayer and his employer showing code BR.

However the employer continued to deduct tax on the basis of previous information which resulted in insufficient tax being deducted.

A new payroll system had been installed in the company around the time of the code error. HMRC accepted that the business had taken reasonable care to deduct the correct...