Underpaid tax-will the taxman go back more than last 2 years in due course?

jennifernil

Some people do have complicated tax, but for most of us it is just a matter of adding up our income, deducting our tax-free allowance and working out the 20%. The use of a simple calculator is an option for anyone who needs it.

There were no calculators when I was at school, but nowadays all pupils get taught how to use one.

jimmo

Believe it or not, I’m with you and kellyshay on this.
As a career taxman I was frequently amazed by people's ignorance of their own tax affairs and, quite frankly, somebody who receives a taxable works pension and taxable state benefits, pays little or no tax and doesn't realise that something is wrong, absolutely astounds me.
However, thinking about it, way back in the 1960s, when I joined the Inland Revenue, it was probably fair to say that the vast majority of people didn't have a clue about tax and put their trust in the taxman. At the time, it was probably right for them to do so because we really were good at looking after people's tax affairs.
Way back then, if you were a Civil Servant, you were a person who commanded respect.
Just as example of nowadays, a little while back on this forum, kellyshay packed it all in because another poster (indirectly) called her a Muppet.
Actually the same person also saw off fengirl, a poster I admired and respected but didn't always agree with.
However, back to the point. If I have read this correctly, johnsmi has been underpaying tax since 1997. You and I probably think that he should suffer the consequences of his failure to appreciate that fact until now but, on the other hand, the taxes equivalent of a no win, no fee lawyer would make mincemeat of HMRC's attempts to recover the underpaid tax.
I would far sooner help johnsmi directly than see him pay some rip off merchant to achieve the same result.

johnsmi

Thanks to everyone for their advice. When talking to the taxman on the phone I asked him to send me the details of how I can pay the £2100 off immediately as I don't like these things hanging over me. I know I could wait to after christmas as indicated in their letter, but maybe better now to get it done with.

But if they start to go back further years then I probably would think about fighting it.

John

Tarasam

jimmo wrote: »

Believe it or not, I’m with you and kellyshay on this.

Just as example of nowadays, a little while back on this forum, kellyshay packed it all in because another poster (indirectly) called her a Muppet.
Actually the same person also saw off fengirl, a poster I admired and respected but didn't always agree with.

Thanks, I struggle to advise on here now due to the level of this sort of abuse I could receive whilst sitting in the comfort of my home, lord knows I get enough at work. (Yes I work for HMRC in the Contact Centres), its awful BUT I have a job and i'm grateful for that.
BUT saying that I cant condone ignorance, yes there are a lot of genuine cases (school leavers, pensioners, etc and I do sympathise with the genuine cases) but when you can see that someone is swinging it and they are daft enough to say something to that point prior to putting the phone down (all the calls are recorded until I hang up) then I've no sympathy at all. Its normally the abusive callers that are the latter, they seem to think that by swearing and making threats / personal comments to the staff that any problems will disppear. I dont know about anyone else but do you want to help someone who is unneccesarily nasty, think it through before becoming abusive.
God this is turning into a rant!!! Sorry.

PS to add this is my opinion and not aimed personally at anyone on this post.

Kellyshay

Tarasam

johnsmi wrote: »

Thanks to everyone for their advice. When talking to the taxman on the phone I asked him to send me the details of how I can pay the £2100 off immediately as I don't like these things hanging over me. I know I could wait to after christmas as indicated in their letter, but maybe better now to get it done with.

But if they start to go back further years then I probably would think about fighting it.

John

They should be sending you out a voluntary payment slip, you should have that sooner rather than later.

You're the 1st person I know of to be paying it now. Consiering how many taxpayers I speak to in a week thats amazing.

chrismac1

I am not condoning chancers. But I can still - just! - remember when I was 17. I had 2 bar jobs and a job in the local C&A too. I had faith in the payroll system and the local tax office to sort this lot out, which they did. I had zero understanding of the UK tax system despite having on paper the best education in my school, plus an interest in finance which led to me in time being a qualified accountant. So you'd think that out of all the 17 year-olds in my school I was the one most likely to work out tax codes, and I didn't bother. I was more interested in my next drinking session or tennis match, and when the pub wasn't busy I was busy snogging the hot barmaid I'd managed to pull. Tax codes - who needs them?

In my client staff base, the people with more than one job are almost all at this sort of stage in their lives. The only real difference is that when I was 17 the UK tax system worked and now it's a mess.

Mikeyorks

johnsmi wrote: »

When talking to the taxman on the phone I asked him to send me the details of how I can pay the £2100 off immediately as I don't like these things hanging over me.

I would seriously reconsider that. First of all - it doesn't come close to 'money saving'. Tuck the £2100 away in an easy access account (possibly there already?) and pay it after they contact you following 31st Dec (as it's over £2k).
The 2nd - and major - reason is that it will be a 'voluntary direct payment (VDP)' at this point and they follow a complex route within HMRC systems and accounting. I can't guarantee they will do it differently ......... but I suspect that after 31st Dec they will turn these cases into formal assessed underpayments. At that point it will be both more sensible and safer to pay it.

johnsmi

Thanks Mikeyorks for that advice, which I will take. In case they may think I'm flush with savings which I'm not, your advice is the best course of action for me to take.

Thanks again
John

Mikeyorks

johnsmi wrote: »

In case they may think I'm flush with savings which I'm not, your advice is the best course of action for me to take.

It doesn't work like that. But - whichever - I'm please I've influenced you.

I've seen the inside of their accounting and voluntary payments are a nightmare of manual steps which dramatically increase the risk of things going wrong. I think they will create formal assessments (with a due date etc) after 31/12. Far more automated and much less prone to human error ....... hence my suggestion to leave until then.