PAYING TOO MUCH IN TAX AND INSURANCE? EMMA bURSTALL SHOWS IT'S A MATTER OF UNDERSTANDING THE SYSTEM AND SHOPPING AROUND.
More than 50 per cent of teachers could be paying too much tax because they have been given the wrong tax code. A Stockport company which specialises in refunds for Pay As You Earn (PAYE) taxpayers has recovered thousands of pounds for teachers who have been wrongly coded.
In one case, a teacher with two children was refunded more than Pounds 1,000 after the firm discovered she was not getting the correct allowance following her divorce.
Many other teachers have benefited from rebates of between Pounds 50 and a few hundred pounds after contacting the company because they failed to claim tax relief over a number of years on professional association subscriptions or specialist work clothing, such as PE equipment - claims can be backdated for up to six years.
Personal Taxation Services Ltd (PTS), established three years ago, has also targeted police officers, local government employees and manufacturing industry workers. It makes no charge for assessments, but claims 35 per cent, including VAT, of any amount recovered.
Marketing director Paul Green says: "At least 50 per cent of all PAYE taxpayers are entitled to some form of refund. Inland Revenue admits to holding up to Pounds 2 billion of overpaid tax. Others have put the figure at nearer Pounds 5.5 billion."
The reason for the errors, he explains, is that employees often fail to inform the taxman when their circumstances change. And early retirements among senior staff have led to a drop in levels of expertise. "It is quite possible many tax inspectors do not fully understand their own rules. This is why individuals must either check their codes themselves or get someone like us to do it for them," he says.
Last year, PTS reached an agreement with Scotland's biggest teachers' union, the Educational Institute of Scotland (EIS), which invited members to take up PTS's free tax-code-assessment offer. About 10 per cent of the union's 49,000 members filled in the firm's questionnaire and PTS has recovered tax rebates of more than Pounds 70,000 - with an average pay-out of Pounds 113.
On the basis of these statistics, PTS estimates that a further 27,000 EIS members might be entitled to rebates which could total nearly Pounds 3 million. Mr Green says: "We specialise only in PAYE and our people probably understand the legislation better than the Inland Revenue. We've got a team of bloodhounds who go by the rules but are prepared to play the game as strongly and aggressively as necessary to benefit our clients."
Due to the success of the EIS venture, PTS recently decided to launch a similar scheme with the National Association of Schoolmasters Union of Women Teachers (NASUWT). PTS spokesman Andre Sochovsky says that hundreds rather than thousands of NASUWT members have replied to the firm's questionnaire so far - and 63 per cent of them now have claims in with the Inland Revenue.
EIS accountant Robert Hodge says the PTS scheme has undoubtedly benefited members. "Obviously questionnaires are confidential so I don't know the reasons why individual members have been incorrectly taxed, but I imagine some failed to inform Inland Revenue after divorce or a death in the family," he says.
NASUWT assistant secretary Paul Maclachlan adds: "It has to be good for teachers to look at whether they are paying too much tax. PTS only makes money if teachers get a refund so we are not feathering the nest of a firm that is not doing our members any good."
If you would like PTS to give you a free tax-code assessment, send a postcard with your name and address quoting Reference 9016 to: Personal Taxation Services Ltd, Freepost SK 1892, Stockport, Cheshire SK4 2YD