Worried, confused and dont know what to do !!!

Tippie

Hi
This is going to take a while so please bare with me. About 20years ago I was self employed, it was round about the time when the self assessment came out, well I got into some trouble with the Tax and ended up owing them money. I went to see them a few times and I did start to pay it off but never paid it all off. Around the same time I switched to being employed and I have been PAYE ever since.
Back in 2008 I left my job to look after my partner who was ill, I was at home for around 6 months I then started doing voluntary work which led to some relief work, and I have not paid tax on this and my tax code for this was 647L. The hours were very hit and miss and so I applied to an other organisation to do relief work for them also, to run with the other relief work, so I had two jobs for around 12 months. I informed the new company that this was my second job and my tax code for them was BR. The second job was then offered to me as a permenant 14hr contract which I took and my tax code then changed to 259T n April. I am not sure what the codes mean. I am now cutting out the relief work, this month will be the last pay from them, so as of now I only have the one job. I am too afraid to phone the tax office to ask what the codes mean in case I still owe them money as I cant afford to pay this, it wasnt a huge ammount to start with. I have never in all my working life had a tax rebate and I will be 50 this year. How long do they hold records for of unpad tax ? could I still be libel for the outstandng tax from all those years ago?? Some one please help me make some sense of these codes. Thanks in advance.

Elaine_Wilson

The codes just indicate the amount of tax-free pay you are entitled to.

For your first job 647L means you can earn £6,475 a year with no tax deducted and pay 20% on earnings above that.

When you took the second job the code BR meant they deducted 20% from your earnings there which would have been correct initially.

When that job became permanent someone at the tax office must have reviewed your position because code 259T is not one employers can decide to use themselves. Since this code gives you £2,595 of allowances I assume you were earning about £3,880 a year (6,475 - 2,595) in your first job. The letter T at the end isn't important.

When you get the P45 from your first job write to the tax office shown on the 259T coding notice and send them a copy. Tell them that you now just have the one job and the code for that job will be amended.

As far as the outstanding tax is concerned I hope someone who knows the inside system will reply. I thought they kept the account opened with no time limit. I do know that when self assessment was brought in people effectively had two accounts with the Revenue. One for years before self assessment and one for those after. It may be that any money you owe is on the old account and they haven't tied it up with your present record.

uk1

Don't they limit enquiries to 6 years history?

Elaine_Wilson

Yes, enquiries are normally limited. The enquiry period can be extended but HMRC have to show a good reason, such as deliberate fraud to do this.

I may have misread the original question but I took it to mean the tax due had been agreed but not paid. This is merely a collection matter. Where small amounts are owing they are often not chased but remain on the account and can be deducted from future repayments. I don't know why Tippie's debt has not been chased - I just doubted it would had been written off without the taxpayer knowing about it.

Tippie

Thanks for the replies that has helped me a lot. I need to inform the one agency that I need to be taken off the books so I can get my P45 and sort it out from there.
Thanks again