MSE News: Tax chaos Q&A: How to fight HMRC demands

19lottie82

A few years ago I worked a second job and I have just had a notice from the tax office telling them that I owe them £2700 in underpaid tax.

I have read online that if you owe over £2k then they will demand it all back in one payment.

I am starting to panic as I have no savings, my income after tax is £1300 but my outgoings are £1157 a month, which leaves me (not including clothing, any entertainment or unexpected costs such as household or car repairs)…….

As you can understand, I am in no position to pay it back, either in a lump sum, or even over 12 months. I am starting to panic slightly!

Has anyone got any advice before I call them up to discuss the money owed? Thanks!

Mikeyorks

Check it ruthlessly first - using your P60(s) and/or P45. If it's OK ....... ask them to allow payment over a longer period. They can go up to 3 years.

Look at the main body of this :

http://www.hmrc.gov.uk/p800/paye-tax-calcs.htm

stooklie

I have just received a notification of underpayment for the year 2007/08. I retired in December 2007 and it would appear that there was glitch at the changeover to my employee pension scheme.
As a result my pension was put on to week1 basis and basic rate was applied. HMRC say part of it should have been taxed at higher rate .
My pension provider informed me that the full details of my total income and tax (P60 information) were provided to HMRC in April 2008 after the end of the financial year.
Having enquired about the provisions of ESC A19 HMRC say that P60 information is not information in terms of this rule as it was received after the end of the tax year and therefor they could not take any action on it during the year in which I underpaid.
Has anyone else any knowledge of this and any views would be appreciated.

































nf

mad01

Hope this is the right place to post - desperately need advice.

In December 2010 I received a letter saying that I had underpaid £789.12 for the 2008-09 tax year. as i am a pensioner with a number of small pensions from different providers and believed that HMRC knew everything about each, I queried the underpayment. after referral to a supervisor the chap I spoke to said he couldn't make sense of it then and there. He said that a full breakdown would be sent to me in January 2011 after they had investigated further on 'other years'.

After a chase up in January they confirmed that I would definitely get a written update before 14 February 2011.

Well it arrived today and I nearly choked as they have uncovered unpaid tax from 2007-08 with a mind boggling amount of £19489.00.
It seems that one of my previous employers had applied an incorrect tax basis to the sale of a share issue in June 2007. Tax applied at 22% rather than 40%. they had also deducted their own NIC charges of over £20K. As the total deductions were 37.5% I assumed everything was in order.

I was initally told on the phone that I must pay immediately or that they might 'generously' allow me two months of instalments. As I was unable to speak at this point, she passed me on to the much more helpful Instalments Team. They offerred payment over 36 months at £540 per month. this from my Pension!!!!

Eventualy was referred to the ESPA 19???? department who took all details again but then advised that it could take up to four weeks for me to here if there was anything they could do.

I only have my pensions and Long Term Incapacity Benefit to live on - had to take early ill health retirement because of a neurological condition. My 80 year old dad lives with me but has no capital and the house is in negative equity against the mortgage balance. Had to remortgage to 'pay off' my ex husband.

Should I just sit and wait for their decision or can anyone advise something proactive I could do in the meantime.

Am going out of my mind and feel totally powerless. Have always been employed and paid via PAYE so genuinely assumed that all was in order.

Mikeyorks

mad01 wrote: »

Eventualy was referred to the ESPA 19???? department who took all details again

It's ESC A19 ..... read the first link on here ('HMRC delays in using information') for detail :

http://www.hmrc.gov.uk/p800/paye-tax-calcs.htm

Get an accountant to help you with this. Worth a £200 or so for expert help and guidance? The value involved, of the underpayment, is a bit heavy for CAB etc ..... and the underlying cause is out of their comfort zone.

HMRC will usually respond to the effect that ESC A19 does not apply .... you need some help to 'appeal' that decision. A good accountant will give you the help you need - and take the pressure off.

mad01

thanks. Have followed the link and found some other stuff which might help too on mental health issues through MALG.

Mikeyorks

mad01 wrote: »

thanks. Have followed the link and found some other stuff which might help too on mental health issues through MALG.

That's good. But I would tend, nevertheless, to get an accountant (probably on a negotiated fixed sum) to help you out with this. It's going to be worth it ... as there is a serious amount of money involved.

sunrise27_2

I just wanted to say that while this isn't exactly what this thread is about I too have been treated very badly on a thread that I posted here on this site a few months ago
I posted on here for some help naively thinking that help is what I would get but how wrong I was , I was in my opinion treated very badly by some members and was really upset over it.
I stuck to my guns and fought for something I believed in and to a certain extent I was able to come to some agreement and sort things out with very little help or support from the members on here
I do think this site is brilliant and I have also had a lot of useful advice from it but there are some people who just want to cause trouble which I think is a shame
anyway back to the original thread
although fingers crossed we haven't underpaid tax we could have quite easily over paid had I not been completely on the ball
my husband got a company car last year and we duly informed the tax people , we were sent a new code which I knew was wrong - they wanted to charge us double the tax we should have been
I went on their website and used their online calculator and worked out the figures - I then had to ring them and tell them how to work it out which I thought was very bad
when I did ring them they realised they were wrong - after using their own online calculator !! they had got a lot of the information on my husbands employment wrong which again is very worrying
this year we got my husbands tax codes through again and he was going to be taxed 40 % on his second job - both jobs together he doesn't earn anywhere near the allowance for paying 20% tax - when we rang them they had estimated that he was earning £62000 in his main job ( if only !! ) he has never earnt or is never like to earn anywhere near that
what do they do just pick some numbers out of a hat !!
I think its disgusting that I have to do all the work for them and prove that their figures are wrong

cymruamb

hi my OH is a retired police officer with a pension and a second job. We made the common mistake of no notifying tax man of 2 incomes and had to pay back tax. OH changed jobs and we notified taxman of 2 incomes, 1 charged at 40%, 1 at lower rate.
OH has just had letters saying he owes over £2,000 from 2008/9 amd 2009/10. is there anything that we can do?
To all the cynics etc on the site, we had told tax man of 2 incomes, 1 was being paid at higher rate so as far as we knew we had done everything right.

Gas_Powered_Toothbrush

mad01 wrote: »

I only have my pensions and Long Term Incapacity Benefit to live on

What happened to all the shares that caused the underpayment? Can you sell them to pay off the debt?