Who’s To Blame For Hardships In Getting IT Refund?

Income tax consultants and financial advisors everywhere advise you never to pay any excess income tax to the government because of the difficulties and delays involved in getting a refund. This article from lovemoney is no exception. However, even at the risk of sounding as though I’ve some ax to grind for the UK government, let me narrate my experience which illustrates how we often rush to blame the government for our own errors of omission and commission.

A couple of years ago, I was eligible for refund on income tax since I was assessed at the higher tax rate applicable for the assumed full year’s income whereas I’d left my UK employment in July itself. When I completed the tax return on the HMRC website, I was surprised to be told that I owed income tax instead of being eligible for a refund. When I spoke to my UK employer, I was told that the problem lay with HMRC and that I should take it up with them directly.

I then called the HMRC person who told me that my employer had reported reimbursable travel expenses under P11D, which is a category meant for taxable benefits. I then had to get my employer to send a a letter to HMRC to clarify that the said amount was non-taxable expenses.

The blame for the difficulty and delay in the refund process in this instance lay squarely with my error of omission for not knowing how to enter reimbursable expenses in the income tax return form and with my UK employer’s error of commission for wrongly classifying such non-taxable amounts under a taxable category.

Let me also take this opportunity to note that the HMRC website is extremely frictionless and delivers a fantastic UX.