Tax underpayment

rhubarb22

Hi, my husband has received a demand from the tax office for approx £2500 in underpaid tax, due to his second job, and not getting the tax codes sorted out properly. Both the employer knew but never sorted it out until a few months ago. He does not dispute that he owes this money, however, we have no way of paying the amount back immediately, and would like to know how much the tax office can take back per week, and is there any way tell them how much we can afford to pay back per week, and can we dispute the amount if we feel its more than we can afford. Thanks in advance
By the way, this goes back to 2008

Mikeyorks

Read the 'What Happens Next' leaflet enclosed with the P800. Your options are fully explained there.

msunmy

hi,

I'v just found this site by luck. I'v received tax underpayment to the tune of 600+ for the y/e 04/09, this has been added to the y/e 04/10 to give total underpayment of 1900+ !.

I noticed from the y/e 2009 calculation that all income/taxes from previous years (don't know precisely) to 04/2009 had been summed up to arrive at a figure that even got my 'personal allowance' down to the limited limit of 6035 before 'BR' basic rate of 20% is then applied!

My query is that why would they applied 'BR' for all the years under their calculation when the 10% free tax for low income earners, like us took effect (then by labour, as i think on /04/08). Obviously, my previous earnings had taken cognisance of the 10% then before arriving at my lower taxable income. If the 10% had been applied there is noway my underpayment would have been that high, except that the tax rule is retrospective. Please, guys correct me if i wrong.

Thanks

Mikeyorks

msunmy wrote: »

when the 10% free tax for low income earners, like us took effect (then by labour, as i think on /04/08).

The 10% tax rate had disappeared by 08/09 .... basic rate was 20%.

There is a 10% rate on Savings interest (applies only to personal allowance + £2440) ...... but this doesn't apply to earned income.

http://www.hmrc.gov.uk/rates/it.htm
(see note at very bottom re 10% rate)