HM Revenue and Customs

5. Mr B complains about the service he received from HMRC in 2024 and 2025. He says HMRC:

• accepted his telephone calls disconnected in November 2024 but refused to pay compensation • assigned him the wrong tax code for the 2024-25 tax year, to collect tax at 40%, following a telephone call made in November 2024 • did not process his Bank and Building Society Interest (BBSI) information correctly in November 2024 • incorrectly taxed his pension contribution in February 2025 • inappropriately responded to a callback request in March 2025.

6. Mr B says this caused him significant inconvenience, wasted time and financial loss. He says his mental health has also suffered. He says he has not been able to plan his financial affairs. He says this is important to him as he is on a fixed income and needs to know his tax liability in advance, rather than having it backloaded at the end of the financial year.

7. Mr B is seeking acknowledgement of errors, service improvements going forward and financial remedy of £120.

8. In September 2024, Mr B received a personal pension payment of £2,710.22 from his pension provider.

9. In November 2024, Mr B contacted HMRC by phone to notify it of his dividend income for the 2023-24 tax year. Following this, HMRC amended his tax code for the 2024-25 tax year.

10. In February 2025, HMRC issued a tax code notice which Mr B believed to be incorrect.

11. In March 2025, Mr B contacted HMRC by phone. HMRC promised a callback within two days, but this did not happen. HMRC contacted Mr B three days after his initial call.

12. Mr B brought several complaints to HMRC regarding his tax affairs in 2024 and 2025. He received final responses from both Tier One and Tier Two of HMRC’s complaints procedures. He then took his complaints to the Adjudicators Office, from whom he received final responses in June and November 2025. He brought his complaint to PHSO in July 2025.

HMRC accepted Mr B’s telephone calls disconnected in November 2024 but refused to pay compensation

15. Before we decide if we should conduct a detailed investigation of a complaint, we look at whether there are signs the events complained about had a negative effect which the organisation has not put right. Having done so we have found HMRC has already done enough to put right the impact of these events.

16. HMRC said it was unable to offer any compensation because it did not feel it had made any errors in its handling of Mr B’s calls. It said calls could disconnect for many reasons and there had been no significant delays in contacting Mr B.

17. The records show Mr B called HMRC twice in November 2024 and the calls unexpectedly dropped. Mr B raised a complaint. He told HMRC his telephone line did not accept calls from withheld numbers and requested contact by letter. HMRC tried to call back but were unable to get through.

18. ‘The HMRC Charter’ says HMRC will be responsive and aim to resolve issues as quickly as it can. HMRC’s ‘Internal Manual: Complaints and Remedy Guidance’ says in some cases, it will make payments to acknowledge worry and distress to customers. It says it will not make payments in every case, and says it not HMRC policy to compensate for the notional or hypothetical loss of customer’s ‘own time.’

19. Our ‘UK Central Government Complaint Standards’ say organisations should give fair and accountable responses and meaningful apologies where required.

20. HMRC apologised for Mr B’s calls being disconnected and responded to his complaint in writing, as per his initial request. Subsequently, HMRC outlined the actions it has taken to improve its telephone service and provided learning to the telephony department regarding calls unexpectedly dropping.

21. We consider HMRC has already done enough to put right the impact of these events on Mr B in line with its charter, its complaint and remedy guidance and our complaint standards. We will therefore not be looking at this part of the complaint further.

HMRC assigned Mr B the wrong tax code for the 2024-25 tax year to collect tax at 40%

22. Before we decide if we should conduct a detailed investigation of a complaint, we look at whether there are signs the organisation has got something wrong. We do this by comparing what should have happened with what did happen. We have done this and have not found any indications something has gone wrong.

23. Mr B says HMRC assigned him the wrong tax code for the 2024-25 tax year to collect tax at 40%, following a personal pension payment of £2,710.22 he received from his pension provider in September 2024. He says his income arrangements have remained the same for many years and HMRC should have anticipated this payment.

24. In its complaint responses, HMRC said the issue with Mr B’s tax codes arose after the payment from his pension provider, which was paid using the tax code 1257L. It said this meant Mr B underpaid tax. To prevent an end-of-year underpayment, HMRC changed Mr B’s tax code to K452 to include an in-year adjustment (IYA) and increase the tax due.

25. When Mr B objected to this, HMRC subsequently amended his tax code back to 250L. Following engagement with a caseworker in November 2024, Mr B agreed to an IYA and his code was changed to K590 and then 143L. HMRC said this meant Mr B’s income was in excess of £54,000. It said he was therefore classed as a higher rate taxpayer and would pay some tax at 40%.

26. The Adjudicator’s Office said although HMRC used the tax code 1257L when Mr B received his personal pension payment from his pension provider, the most suitable code would have been 0T. This is because Mr B had already used all his tax-free allowance. It said HMRC did not use this code because the payment from his pension provider was unexpected. It said HMRC were not in a position to issue the correct code and used the best available code based on the information it had at the time. It said HMRC acted in line with its policy and guidance.

27. We recognise it would have been frustrating for Mr B to have his tax code changed. It is important to emphasise that tax codes are changed on a provisional basis. We can see HMRC’s changes to Mr B’s tax code were in response to it receiving new information. This in itself is not an indication of maladministration, as this can happen in the course of HMRC carrying out its functions and following its processes.

28. The Taxes Management Act 1970 says HMRC has four years from the end of the tax year to notify customers of an underpayment of tax. The records show HMRC informed Mr B of the issue in the same tax year.

29. Mr B told us he did not understand why HMRC considered the payment from his pension provider to be unexpected. We asked HMRC for more information on this point. HMRC told us Mr B took a £2,700 drawdown payment from the same pension plan in September 2021 (tax year 2021-22). It said there were no records of any similar payments in the tax years of 202223 or 2023-24. It said it would not have known about the payment in September 2024 until it received the pay submission from the pension plan.

30. Having reviewed the records, we consider HMRC assigned Mr B a tax code following his pension plan payment in line with the information it had at the time and in line with legislation. Although the tax code used was not optimal for the situation, HMRC acted appropriately with the information available. We consider it was reasonable for HMRC to consider the pension plan payment to be unexpected, because Mr B had not taken similar payments in the previous two tax years. We will therefore not be considering this part of the complaint further.

HMRC did not process Mr B’s Bank and Building Society Interest (BBSI) information correctly in November 2024

31. Mr B says HMRC did not process his BBSI information correctly in November 2024. In its complaint response, HMRC said it had been waiting for confirmation of the figures from Mr B and his bank and had been unable to include them in its calculations.

32. The Adjudicator’s Office said HMRC had not received BBSI information from Mr B or his bank and had therefore assumed the interest was £0.

33. BBSI data is obtained by HMRC under the powers of Schedule 23 of the Finance Act 2011. Financial institutions have until the end of June following the financial year end to submit their returns. This data is added to HMRC’s systems between August and October each year. If financial institutions do not provide data by the deadline, HMRC is not required to chase the institution concerned.

34. If HMRC does not receive BBSI information, its system shows the interest amount as £0 and will close the relevant account.

35. The records show HMRC advised Mr B on several occasions that his BBSI information was outstanding. This was so Mr B could contact his bank and obtain the necessary information. When HMRC did not receive this information, it processed it in line with its internal processes and assumed the interest was £0.

36. Having reviewed the evidence, we consider HMRC processed the lack of BBSI information for Mr B’s accounts in line with legislation and HMRC processes. It is not HMRC’s responsibility to chase financial institutions for BBSI data. We will therefore not be looking at this part of the complaint further.

HMRC incorrectly taxed Mr B’s pension contribution in February 2025

37. Mr B says HMRC incorrectly taxed his pension contribution in February 2025. He says he believed he was not liable for the higher rate of tax because he made a £3,600 contribution to one of his pensions. Mr B believed this would reduce his taxable income by this amount and put him into the basic rate tax band.

38. HMRC said it advised Mr B that £3,600 Private Pension Relief (PPR) would be added to his tax-free allowance for the tax year 2024-25. It changed his tax codes and added his PPR as a concessional relief allowance, which resulted in tax relief of £720.

39. The Adjudicator’s Office found HMRC should not have updated Mr B’s tax codes in this way, as this was not in accordance with its guidelines. HMRC guidelines outline the requirements for a formal claim for concessional relief, which was not explained to Mr B. It said although HMRC had correctly told Mr B how concessional relief worked, it should not have included it in his tax code as an allowance for his pension contribution. It should have advised Mr B of the requirements for a formal claim, as per its internal guidance. It did not identify this error during its assessment of Mr B’s complaint.

40. The Adjudicator’s Office upheld this aspect of Mr B’s complaint and asked HMRC to make a financial redress payment of £250, in line with its complaint and remedy guidance.

41. Our ‘UK Central Government Complaint Standards’ say organisations should give fair and accountable responses and meaningful apologies where required. They should identify suitable ways to put things right for complainants when things have gone wrong.

42. HMRC’s ‘Internal Manual: Complaints and Remedy Guidance’ says its payments are intended to acknowledge its mistakes have affected someone badly. These payments are not akin to damages and most payments fall in the £25 to £500 range, with the vast majority at the lower end of this range.

43. From the records, we can see HMRC did not recognise this error during their internal complaints process. However, when the error was identified by the Adjudicator’s Office, it made the payment as requested, in a timely manner. This is line with our complaint standards.

44. Mr B has already received financial remedy for this part of the complaint. The remedy received is in line with HMRC’s internal processes and appears to fall at the higher end of its usual range. Mr B says the error caused him inconvenience and meant he had not been able to plan his financial affairs in good time. Given the relatively low impact of this error on Mr B, we do not feel further financial remedy would be proportionate.

45. We consider HMRC has already done enough to put right the impact of this error on Mr B, in line with its internal remedy guidance and our complaint standards. We will therefore not be looking at this part of the complaint further.

HMRC inappropriately responded to Mr B’s callback request in March 2025

46. Mr B says he contacted HMRC by phone in March 2025 and was promised a callback within two days. He said this did not happen and HMRC contacted him a day later.

47. The Adjudicator’s Office said this part of Mr B’s complaint had not been reviewed by HMRC because it had already issued a Tier Two complaint response prior to the call. It said HMRC should have been given the opportunity to address this part of the complaint before it could consider it but listened to the call in the interest of good customer service.

48. ‘The HMRC Charter’ says HMRC will be responsive and aim to resolve issues as quickly as it can. It says it will explain when a customer can expect contact from HMRC.

49. The records show the call was challenging but courteous. HMRC tried to contact Mr B twice three days after the call. This was a day later than promised, but two attempts were made to reach Mr B.

50. HMRC’s ‘Internal Manual: Complaints and Remedy Guidance’ says in some cases, HMRC will make payments to acknowledge worry and distress to customers. It says it will not make payments in every case.

51. Having reviewed the evidence, we consider while HMRC did not call Mr B when it promised, it called back the following day and made an additional attempt to reach you. It has not made a financial remedy payment, which is in line with its internal remedy guidance.

52. HMRC’s handling of this issue is in line with our complaint standards. We will therefore not be considering this part of the complaint further.

53. We thank Mr B for taking the time and effort to bring his complaint to us. We hope this statement reassures him about the service he received from HMRC and clearly explains our decision. We wish Mr B the best for the future.

1. We have carefully considered Mr B’s complaint about the service he received from HMRC in 2024 and 2025. We are sorry Mr B’s experience has caused him distress and frustration.

2. Having reviewed the complaint, we have decided HMRC has already done enough to put right the impact on Mr B of some parts of the complaint. We have seen no indication that anything went wrong with the other elements of Mr B’s complaint.

3. We consider HMRC has already done enough to put right the impact of disconnecting Mr B’s telephone calls in November 2025 and the taxation of his pension contribution in February 2025. We consider HMRC acted in line with its guidance and relevant legislation in relation to Mr B’s tax code for 2024-25, the collection of Mr B’s BBSI information and his callback request of March 2025.

4. We have therefore decided to take no further action. We explain this further in the statement below.