Worst ever HMRC error

[puffster]

Just in the spirit of entertainment, I received a notice of coding today with a new tax code for a recent change to my circumstances. Which would be fine except that one of my existing pensions had unexpectedly been increased by over £150K even though it should not have changed at all!

Rang up HMRC and after 10 minutes got through to a human being. I pointed out that my new coding was bonkers without saying which item it was. The guy said "I can see what you mean, looks like fat finger trouble!" and corrected the error after checking with me (so all credit to HMRC).

Anyone else had anything this big?

Regards, Puffster

[dealtn]

I once had 3 credits to my bank account on a single day totalling a (very) large six figure sum, which I worked out must be from the Inland Revenue concerning an overpayment of Income Tax (from the description being very similar to a payment 12 months earlier).

At the time I worked for a bank in the City with all the associated compliance department vigilance you might imagine. Being the conscientious chap I was I went to the Chief Exec of our department, who I knew well, to firstly explain the situation and seek advice on what I should do. I had obviously done nothing wrong, and advised the Inland Revenue that a mistaken credit had been applied to my account and they should investigate and reverse the transaction with my permission.

According to my legal right I was entitled to any interest on this sum until such time as the situation was resolved, whilst claiming no ownership over the capital sum the interest earned was mine. This was before the days of internet banking etc. but working for a bank I was able to see my account on a daily basis and ensure the night's closing balance was earning interest away from the (near) zero then usually applied to current account balances before being returned to the current account each morning to meet any transactions the following day, which would include the eventual reversal of the 3 credits.

This was in the day of a meaningful interest rate, unlike today. It took several days, about a month from memory, before the situation was rectified, during which time I had earned interest income running into a four figure sum. The correct credit for overpaid Income Tax arrived shortly thereafter, the details of which I can't remember exactly but it wouldn't surprise me if this was for less than the interest earned in the interim following their error.

[Lootman]

I once had 3 credits to my bank account on a single day totalling a (very) large six figure sum, which I worked out must be from the Inland Revenue concerning an overpayment of Income Tax (from the description being very similar to a payment 12 months earlier).

At the time I worked for a bank in the City with all the associated compliance department vigilance you might imagine. Being the conscientious chap I was I went to the Chief Exec of our department, who I knew well, to firstly explain the situation and seek advice on what I should do. I had obviously done nothing wrong, and advised the Inland Revenue that a mistaken credit had been applied to my account and they should investigate and reverse the transaction with my permission.

A less honest soul might have just kept quiet about it and hoped nobody ever noticed. An even less honest soul might have withdrawn the lot, grabbed his passport and gone somewhere without an extradition treaty with the UK.

I recall a newspaper story from a few years back about a London taxi driver who had a passenger leave a bag in his cab when he got out. The driver looked inside the bag and saw it contained a very large and life-changing sum of cash. He drove home, got his passport, drove to Heathrow and was never heard of again. His wife was not well pleased, nor presumably the owner of the cash.

It must be interesting to have something like that happen and have a very short period of time to consider all the possible options. The decision made defines the person.

[dealtn]

A less honest soul might have just kept quiet about it and hoped nobody ever noticed. An even less honest soul might have withdrawn the lot, grabbed his passport and gone somewhere without an extradition treaty with the UK.

I liked my job. I was (relative to most people) very well paid. I had seen somebody fired for travelling on a train without buying a ticket, on the basis that he couldn't be trusted with other people's monies if he held such a liberal view to theft/fraud with respect to his use of the transport network.

Regardless of the risk of getting caught (which I imagine in such a scenario is actually quite large), there was no way I was going to run the chance of losing what was important to me.

Others of course might think, or act differently.

[Lootman]

A less honest soul might have just kept quiet about it and hoped nobody ever noticed. An even less honest soul might have withdrawn the lot, grabbed his passport and gone somewhere without an extradition treaty with the UK.

I liked my job. I was (relative to most people) very well paid. I had seen somebody fired for travelling on a train without buying a ticket, on the basis that he couldn't be trusted with other people's monies if he held such a liberal view to theft/fraud with respect to his use of the transport network.

Regardless of the risk of getting caught (which I imagine in such a scenario is actually quite large), there was no way I was going to run the chance of losing what was important to me.

Others of course might think, or act differently.

I was not suggesting that you should have done otherwise. In fact I commended you on your honesty. Just that some others might have responded differently to such a windfall.

The train ticket thing is odd, but I know it to be true. My youngest son got caught without a rail ticket and, for a while, it looked like he might be prosecuted. He has a City job and his real fear was that would be in jeopardy. In the end it was just a fixed-penalty notice so no problem. But I thought at the time such a response by an employer was overkill, and I would have hired a very expensive lawyer to get him off in that case.

[dealtn]

From memory it wasn't a simple case of a mistake and failing to have a ticket. I might not have the exact details but I think it was a case of buying two tickets that covered the first and last parts of a journey, with the middle section of the route being "free".

Whilst technically a firing offence I am sure a simple "mistake" would have been treated differently. This, however, was fraud/theft, for sure, and over a relatively small sum of money too, although I guess that might have been repeated a number of times. Perhaps it felt harsh at the time to the employee, but he didn't get much if any sympathy from anyone else who worked with him, despite him being generally a "nice bloke". We all knew the rules about being "squeaky clean" as far as money related matters were concerned.

(I took no umbrage at any perceived implication I might have acted differently with respect to the HMRC error, indeed perhaps should apologise myself if my reply inferred I might have done.)

[jdlemon]

I know someone who was an IT director in the City and a courier made a delivery to him (not sure why he was the recipient) of a package containing bearer bonds of a seriously life-changing amount.

He knew who the owner of them was and decided that Brazil (for example) was not far enough away or enough out of sight...

[dspp]

Once upon a time in Argentina, very close to the Bolivian border where I was living & working at the time for a large blue-chip, I was just heading out of mobile range for a fair while when I got a very unusual phone call from the country-office in Buenos Aires. They sounded very relieved to get hold of me, it was actually the Finance Director who was on the line. Apparently they had gotten in a bit of a muddle with my salary and credited about £1m to my then bank account in the Channel Islands. And could they please have it back.

Our communication systems were not great at the time, and not for want of my asking for better ones, but a few days later I managed to get hold of my bank and let them know it should be returned. Frankly it was the least of my worries at that particular moment.

Needless to say my bank account has not reached that level ever again. I'm working on it

- dspp

[Lootman]

From memory it wasn't a simple case of a mistake and failing to have a ticket. I might not have the exact details but I think it was a case of buying two tickets that covered the first and last parts of a journey, with the middle section of the route being "free".

Yes, I think a prosecution would only happen where there was fraudulent intent and a belief that it could be proven "beyond a reasonable doubt". Merely not having a ticket usually just means buying it on-board and maybe a fee on top.

(I took no umbrage at any perceived implication I might have acted differently with respect to the HMRC error, indeed perhaps should apologise myself if my reply inferred I might have done.)

No worries, I was merely speculating what goes through the mind of someone in that situation. Obviously your response was impeccable.

[zico]

I was recently 'victim' of a big error by HMRC, if only in percentage terms.
A pension recently started paying out to me and HMRC applied a 65% tax rate on it. Tried to find out how they could have done this, but settled for an assurance they'd sort it out.