Tax Returns and Demands for Cash

backinblack

I'm not sure if anyone can help with this or if I'm going over old ground of someone elses. Tax confuses me. A couple of years ago I was registered as Self Employed. I made zero profit, about £600 loss in fact, so ended my self employment after about a year. During the whole time I was also employed. I had 3 jobs over the whole tax year. I was made redundant from the first; I then took a fixed term contract for 4 months at a lower wage. Finally I went to work a ski season in a holiday resort, taking another substantial pay cut.

When I completed my tax return, I was asked to also include money earned from employment. So I did. They have been trying to tell me ever since that I owe them money as I did not pay enough tax that year. But it is for the employed work, not the self-employed work.

Over the course of the year I took a total paycut of about £9,000 per annum, and each time I moved to a lesser paid job, I was given a tax rebate. In total I got about £400 in tax rebates, which is almost what they are asking for back. I have written to them and written to them, and now it seems they have started to ignore me, meanwhile they are charging interest on what they say I owe them.

Somehow it doesn't seem to add up to me, but I'm not very good at these sorts of things. Has anyone got any tips/thoughts/info that might help me out, one way or the other?

fengirl_2

Its hard to advise you without seeing the figures which you returned. It does occur to me however that if you were working abroad during that year and did not pay overseas tax, then UK tax would be due on those earnings. This might be why the refunds you received would be negated. Did you claim loss relief for the business? This needs to be considered too.
Without us seeing the figures, I can only advise you to ask for an appointment at your local tax office and for your file to be sent there so that you can go over the liability face to face.

dori2o

Fengirl is right,you needs to speak to someone who has the figures infront of them.

Somethings that may need to be looked at though.

In your employment where you were made redundant did you receive a redundancy payment in excess of £30k, and were you a 40% taxpayer in that year?

Have you offset the loss from your business against your other income?

You say you got repayments during the year, who were these refunds from? i.e. how were they paid, from the tax office or via your salary?

Are you sure the information you have submitted is correct?

First things first call HMRC, speak to an advisor who can see your tax return and PAYE details. From there they should be able to piece together what has happened. If not the advisor can arrange a call back from the local enquiry centre to arrange an appointment with you to go and see them face to face.

backinblack

Thanks for your responses. Fengirl, I was employed by a UK based holiday operator and paid in sterling, so UK tax and NI were also paid throughout the whole period. Dori2o, my rebates came through my salary as tax paid (shown as minus). I was not paid over 30k in redundancy and was not on 40% tax in the year

You both mention whether I claimed loss relief for my business. I don't know what this is...anywhere I can get more info on this?

I will try to make an appointment but everytime I have called them in the past (many, many times) I get a very unhelpful person who eventually tells me to put everything in writing and they will look into it. Then I get another statement asking for the money I owe plus interest and no response. This has been going on for 2 years. I have little faith in the Inland Revenue's ability to help me with this.

Is there any independant body that can help me further with this before I appraoch the tax office? I would like to fully understand everything before I arrange a meeting.

Tarasam

Sounds to me like you're also failing secuity when you ring and thats why the advisor seems unhelpful.. The only people that can really help you are the tax office, they can see the details.

Did you tell them that you'd stopped your self employment, re your employment its feasible that your employer used the wrong tax code and under taxed you.

Theres so many reasons, try calling HMRC they're the only ones who can shed any light.