Threatened with court action!

bridiej · 31 January 2007 at 3:22AM

I had a letter (via my parents in the UK) saying if I didnt pay the IR nearly £400 by 2nd Feb I would be summoned to court.

I am totally confused as it said I owed them some money as payment on account for 04/05 PLUS they were charging me two lots of interest on unpaid monies.

I have always paid my tax in one lump sum (as advised by my accountant who for 04/05 who asked for payments on account to be reduced to nil as he knew we were emigrating in 2005 so my tax would be minimal) and have NEVER had any communication from the IR to say I had to pay anything further. This letter threatening court is the first communication received.

I have written a letter asking for an explanation (given I tried for 2 hours constantly pressing redial and was unable to get anything other than an engaged tone) and for my money back, as all my payments are up to date (I made my last UK tax payment earlier this month for the small amount due from April-September 2005) so I cannot understand how I can possibly owe anything.

Just wondered if anyone else has had something similar happen to them, and whether they were succesful in getting a refund?

Hoddie_2 · 31 January 2007 at 11:47AM

If you reduce your payments on account (POA) to nil, but then it subsequently turns out you do have some tax to pay, they will recreate each POA at the lower of:-
• Half of the actual liability; and
• The original POA figures
...and charge interest back to the original due date.

For example, if your POA for 04/05 were set at £300 each, and you claimed to reduce these to nil, but actual 04/05 liability was £450, they will recreate the POA at £225 each and charge you interest back to the original due dates.

Do not just wait for a response to the letter, by then they may well have carried out distraint (ie court action). I'd advise you to keep calling the tax office until you get through. Call your processing office rather than the collections office.

Toni_Tax · 31 January 2007 at 12:31PM

I would also pay them the £400, if you can, while the matter is sorted out.

ckerrd · 31 January 2007 at 12:40PM

Have to say something similar happened to me.
Got letter saying I owed tax on 2002/3
When I queried I got a very nice bloke who said, "oh I see what you have done, you have filled in your tax return incorrectly. Just write a letter to us and it will all be fine and we will never bother you again"
Sadly they continued to bother me and although I spoke to someone on the phone I could not get them to give me a written breakdown of why I owed this tax. They kept adding charges until I got a call from my HR dept at work saying the IR had been in touch to arrest my wages.
So I paid them and have been chasing them now for the best part of a year to get the money back.
Moral - pay up and then chase or it will only cost you more.

Toni_Tax · 31 January 2007 at 12:43PM

ckerrd - i would recommend that you visit your tax office with all the necessary paperwork -they should be able to sort the matter out there and then

Mikeyorks · 31 January 2007 at 1:42PM

ckerrd wrote:

They kept adding charges until I got a call from my HR dept at work saying the IR had been in touch to arrest my wages.

Gosh ... there's an awful lot of mileage (and communications) between the former .. and the latter!

You weren't pretending to be an ostrich, or similar, in the intervening months?

bridiej · 1 February 2007 at 1:34AM

Hoddie wrote:

If you reduce your payments on account (POA) to nil, but then it subsequently turns out you do have some tax to pay, they will recreate each POA at the lower of:-
• Half of the actual liability; and
• The original POA figures
...and charge interest back to the original due date.

For example, if your POA for 04/05 were set at £300 each, and you claimed to reduce these to nil, but actual 04/05 liability was £450, they will recreate the POA at £225 each and charge you interest back to the original due dates.

Thanks for your reply.

So am I supposed to read their minds about this, surely they should have let me know otherwise how do I know I have anything to pay?

I have paid the £400 as I dont want any other charges, but I can ill afford it at the moment.

Tried again on the phone last night, hopeless.....

ctm_2 · 1 February 2007 at 9:57AM

You would have been told what the payments on account were going to be on the statements you were sent regularly.

I suggest you find the statements, and find out exactly what they are/were chasing you for, and then see if it is actually due, or if it could be lowered.

ckerrd · 1 February 2007 at 3:40PM

I was an Ostrich for quite some time with all matters to do with money until I had my lightbulb moment, however I have been trying to sort this one out for a while.

What annoys me is that no-one seems to be willing to put anything in writing to me about this. Why I don't know.
I have always been PAYE and my circumstances haven't changed in the last 10 years.
Fortunately me having to pay this money has not tipped me over the edge financially but I do expect to get it back from them.

Once they charged me with late submission of my postal return. When I pointed out the date I posted I was told "That was a Sunday therefore no Post Office would be open and neither would there be a collection"
I had to get a letter from the Post Office in my local Safeway (as it was then) to say that they were indeed open that day. I got my £100 back

bridiej · 2 February 2007 at 1:42AM

ctm wrote:

You would have been told what the payments on account were going to be on the statements you were sent regularly.

I suggest you find the statements, and find out exactly what they are/were chasing you for, and then see if it is actually due, or if it could be lowered.

But this is my point I havent had any statements, just this letter

bridiej · 6 February 2007 at 1:42AM

I take it no-one else has been in this situation then?

Threatened with court action!

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