Slapped with a 3k bill by HMRC

rammster

I am a hospital doctor and pay tax via PAYE (it gets deducted from my payslip). I have got a letter today saying I have underpaid 3k tax, because it was not deducted correctly from my employment income and that because i am a higher rate tax payer.

My question what do I do from here as I know nothing about tax

How does the money get paid to HMRC , do I write a cheque to them as that is not listed on the letter. They have sent in a "understanding your tax calculation booklet" which says that between 1-2000£ underpayments, the tax gets deducted from the coming year's tax returns. However greater than 2k the HMRC will contact you.

Help please! I am a newbie to this.

London05

How did that happen do you have another job?Interest from massive savings (assume not if you are a Doctor or have a savings account with IceSave - sorry I am still annoyed with myself for investing in them) Just because they say it is so remember they make mistakes too so you need to check the information they have which makes them think you owe them money.

Normally if you just have one job and you are paid by PAYE you would not expect to fill in a tax form.

As you are on PAYE they will collect the money back by changing your tax code thereby reducing your free pay (currently 6005 2008/9), never offer to pay them cheques.

Make sure you get a full statement from them explaining how the underpayment occurred, if you get on well with anyone in your wages department they might be able to explain things to you or failing that Citizens Advice will have someone who can explain in plain English.

rammster

Well I moved from Hospital medicine to GP registrar in february (i.e primary care) and thats where I think the goof ups have happened. Is it really worth my energy to take it up against HMRC , or will it make matters worse for me? should I get an accountant

SomeBozo

rammster wrote: »

Well I moved from Hospital medicine to GP registrar in february (i.e primary care) and thats where I think the goof ups have happened. Is it really worth my energy to take it up against HMRC , or will it make matters worse for me? should I get an accountant

Am I correct in assuming that you were previously a salaried doctor in secondary care, and now you are independant contractor in primary care?

A quick test of this is, who pays your wages? Is your salary paid for by the primary care trust or paid via the local health economy (read via GP practice) via being independant and claiming for outcomes under QOF?

Bozo

London05

You should definately get a tax calculation statement from them which will show how they worked out that you had underpaid.

Here's how it all works :

You get freepay and then all the rest is taxed at either 20p or 40p in the pound this year.

Last year the freepay was 5225.00 , i think, so if you take your gross pay from both jobs for April 07 to March 08 add together deduct 5225

Whatever the balance is goes as follows

You pay 10% tax on the first 2230
22% on the next 32370

Anything over 32370 you pay 40% on (there is no incentive to work hard)

Have you dropped off yet?

The main thing if you have their tax calculation you can check the income figures they have are correct and tax bit should be right.

You can ring them they are usually quite friendly, I find either before 9am and after 3pm the best times to get through straight away.

So how is the GP lark as opposed to the Hospital seen enough sore throats yet?

rammster

Well I am being payed by the primary care trust. The payroll is via GP surgery though, and they did talk of a goof up in tax when I started in February but that they would sort that out on my next salary and I though that did.

GP is very satisfying , it is perhaps the most satisfying job that I have ever done. Somehow I now feel as if I belong to the people I see everyday. For the first time I not only ask them about their sore throats , knees etc but also about how that is affecting their mood, life and social role. And this understanding has opened a whole new world for me. Coming from some one who used to be an A+E doctor , I perhaps used to turn a blind eye to the socio psychological component of disease . I wish that every doc on the NHS should be trained like GPs.

This year has changed my life. I am thankful for being able to help people like I can do today.

I am also very thankful for all the help you all are giving me.

The fact that I don't have to pay all this now has put my mind to rest.

London05

Funnily enough my daughter has just moved to A & E as a Nurse from the wards (been qualified 3 years I think) she says she is learning more than she ever did on ward.

Need more GPs like you then, mine even fobs me off to the Family Planning clinic for any ladies issues, wouldn't mind but I am 50 and don't need their services, bit embarrassing sitting there with all the teenagers!

Anyway back to taxing issues your best bet really is to speak to them on the phone and maybe say " I assume you can collect the tax owed by reducing my tax code" and see where you go from there , especially as the error did not arise through anything you did.

They will send you the tax calculation statement but bizzarely they don't send them out at the same time - don't ask they have always been like that I have this issue every year with my husband as he has his Police pension and a full time job oh yes there was no way he was retiring at 50 to sit on his backside.

Lorian

I highly suspect my GP knows much more about income and tax than my socio psychological components.