Tax rebate??

Lifeisbutadream

A friend of mine was expecting a tax rebate as her husband went from 40% tax to earning nothing for the last 5 months of last tax year. She expected it to be around £2000.

When she tried to sort it out, HMRC said that they actually owed the HMRC £1980 as they had underpaid the previous year and so they would get a rebate of just £20.

My question is, can they just do that? surely if they owed HMRC £1980 they would have asked for it?? how can they find out if the figures are correct?

dzug1

Really not enough information there, but a possibility:

the husband was paying off an underpayment from the previous year through his tax code

because he was paying nothing for the last 5 months of the year, some of that underpayment was not collected. Therefore it is due now, balanced out (very roughly) by his reduced tax bill for the year.

Lifeisbutadream

dzug1 wrote: »

Really not enough information there, but a possibility:

the husband was paying off an underpayment from the previous year through his tax code

because he was paying nothing for the last 5 months of the year, some of that underpayment was not collected. Therefore it is due now, balance out (very roughly) by his reduced tax bill for the year.

Sorry I dont have any more information - my friend was understandably very upset about it - her husband is now on a minimum wage job after 5 months of receiving nothing at all due to 'earning too much' before he was made redundant.

They knew nothing of any underpayment - is there any way that they can find out if the HMRC are right? they cant afford an accountant.

Mikeyorks

Lifeisbutadream wrote: »

They knew nothing of any underpayment - is there any way that they can find out if the HMRC are right?

Have a look at the P2 (Coding Notice) for 09-10 (likely issued Jan / Feb 09). If there's a restriction in the coding it should show there.

Most likely reason for an underpayment that size is a company car?

It will take a while but asking HMRC for details of the underpayment would be a good first step?

C.Lightowler

Lifeisbutadream wrote: »

Sorry I dont have any more information - my friend was understandably very upset about it - her husband is now on a minimum wage job after 5 months of receiving nothing at all due to 'earning too much' before he was made redundant.

They knew nothing of any underpayment - is there any way that they can find out if the HMRC are right? they cant afford an accountant.

I know it's a long shot but maybe some accountants or tax advisers would have a quick look at their case on a pro bono basis?

It may not take too long to actually have a quick scan over the figures and work out if HMRC are correct.

Got to be worth a shot at least...?

John_Pierpoint

A HMRC drop in advice centre might be able to help:
http://classic.multimap.com/clients/places.cgi?client=ir