BR Tax Codes --- Help needed

suso

When you were self employed who completed your tax returns?.

You mention that you were only self employed for 10 months so when did that finish, as the tax year in which it finished you would have completed a tax return so there shouldn't be an underpayment, as you would have declared all your incomes.

As for the later years, if you completed the returns yourself when you were self employed it would show that your were savvy in tax affairs, so it would be looked at differently when you say you weren't aware you were underpaying tax. A lot less room for negotiation.

met_2

suso wrote: »

When you were self employed who completed your tax returns?.

paid an accountant to take care of it

You mention that you were only self employed for 10 months so when did that finish, as the tax year in which it finished you would have completed a tax return so there shouldn't be an underpayment, as you would have declared all your incomes.

i lost my job so went self employed for 10 months and that finished in dec 2006m

As for the later years, if you completed the returns yourself when you were self employed it would show that your were savvy in tax affairs, so it would be looked at differently when you say you weren't aware you were underpaying tax. A lot less room for negotiation.

sadly not tax savvy as i paid for an accountant to do them for me, thanks for the advice though. does anyone think ill be able to negotiate a payment plan with the powers that be :-) thanks

suso

So for the year ending April 2007 you should be upto date and tax should have been paid correctly as a self assessment form should have been completed.

I'm getting a bit confused on the dates.Self employed until Dec 2006 then worked for a company for a year then worked for another company for another 2 1/2 years - that takes you upto the middle of 2010 !

So working backwards from the figures in post 6, as I'm presuming you put figures down for completed tax years.

Year - Pay Tax Paid Tax Due Outstanding
2008-9 - 67,000 13400 17426 4026
2007-8 - 65,000 13150 17414 4264
2006-7 - should have been cleared through SA

So you owe approx £8300 , plus if you are still on BR code and in employment then you will be building up another underpayment for this year.

Room for negotiations - in cases of extreme hardship then HMRC will agree to put it into your code for a couple of years. instead of the normal one.

But as your earning over a grand a week, its not going to be looked at as a hardship case. Do you have any savings ? the interest should have been taxed at the higher rate as well, so that would be more potential underpayment.

Although you have not mentioned trying to avoid paying it, at the end of the year now that all info is centralised, the new PAYE system will be performing a tax calculation on everyones earnings to see if they are due for a refund or have underpaid. So better to approach HMRC rather than have them approach you with an investigation.

Any

met wrote: »

sadly not tax savvy as i paid for an accountant to do them for me, thanks for the advice though. does anyone think ill be able to negotiate a payment plan with the powers that be :-) thanks

I just had similar situation with one of our employees - he was on 647L while he is driving a company car (over 9k pa benefit!!) for the last 2 years and is in 40% tax bracket - called HMRC who told us that they didn't deal with his P11Ds because they have no record of us being his employer (he was also self-employed before). There is no P46 employee without P45 in his file (so that is why).

HMRC told me to give him one to complete and that they will change his tax code.

However, they also said that they will give him tax code only on wk1/mth1 (put him on correct code but not collect past dues) basis as in these hard times they will deal with any PAST amounts owed on the end of the year.

So I think you definitely have space for negotiations about payments as HMRC obviously realises that there is a recession out there. But make the first step.