Should I Pay HMRC? (06/07)

Touch79

Dear all,

I currently owe HMRC just under £4000 for the tax year 06/07, and had intended paying it within the next couple of months.

This debt was caused by a previous employer undertaxing me on company vehicle/fuel.

I have recently learned that HMRC are writing off debts owed from 06/07 as they are unable to pursue them after April 2011, therefore would like advice on whether I should pay this or hope that it is written off (if that info is correct).

HMRC haven't really been chasing me for this money, save for bi-annual self-assessment statements.

If the advice is not to pay it, how would I stand in relation to other payments I might make to HMRC? For example I will need to pay them in January 2011 for the 09/10 year and, presumably, they would be able to apportion some of this to 06/07 should they wish.

Thanks in advance for your help.

Mikeyorks

Touch79 wrote: »

I have recently learned that HMRC are writing off debts owed from 06/07 as they are unable to pursue them after April 2011,

That will be a surprise to HMRC. As the due date - for SA - would be Jan 08. Not 'out of time' by any rules.

Where did you get the (mis)information from?

Touch79

It was from this link (remove the space)
www. walletpop.co.uk/2010/11/12/2m-have-income-tax-debts-cancelled/

I'll admit it surprised me if true, and, although I intended paying up, I'd feel rather foolish if I did so just as the debt was about to be written off.

It was this paragraph in particular that caught my attention 'Legislation means that tax underpayments cannot be pursued more than four years after the relevant tax year, except where they involve illegal activity'.

John_Pierpoint

Touch79 wrote: »

Dear all,

I currently owe HMRC just under £4000 for the tax year 06/07, and had intended paying it within the next couple of months.

This debt was caused by a previous employer undertaxing me on company vehicle/fuel.

I have recently learned that HMRC are writing off debts owed from 06/07 as they are unable to pursue them after April 2011, therefore would like advice on whether I should pay this or hope that it is written off (if that info is correct).

HMRC haven't really been chasing me for this money, save for bi-annual self-assessment statements.

If the advice is not to pay it, how would I stand in relation to other payments I might make to HMRC? For example I will need to pay them in January 2011 for the 09/10 year and, presumably, they would be able to apportion some of this to 06/07 should they wish.

Thanks in advance for your help.

I am confused by your posting.
The background to this is that HMRC got into serious arrears with their reconciliation, when struggling to implement a new computer system. They are now catching up and sensibly concentrating on the more recent years first.

You do self assessment, so in theory you should not have undeclared sources of income or benefit in kind.

Are you saying "I have now noticed an error made by a former employer and was thinking of reporting it" or are you saying "HMRC have noticed the error BUT if I sit on my hands until next April, will it get written off from appearing on my SA statement?"

John_Pierpoint

Touch79 wrote: »

Dear all,

I currently owe HMRC just under £4000 for the tax year 06/07, and had intended paying it within the next couple of months.

This debt was caused by a previous employer undertaxing me on company vehicle/fuel.

I have recently learned that HMRC are writing off debts owed from 06/07 as they are unable to pursue them after April 2011, therefore would like advice on whether I should pay this or hope that it is written off (if that info is correct).

HMRC haven't really been chasing me for this money, save for bi-annual self-assessment statements.

If the advice is not to pay it, how would I stand in relation to other payments I might make to HMRC? For example I will need to pay them in January 2011 for the 09/10 year and, presumably, they would be able to apportion some of this to 06/07 should they wish.

Thanks in advance for your help.

I am confused by your posting.
The background to this is that HMRC got into serious arrears with their reconciliation, when struggling to implement a new computer system. They are now catching up and sensibly concentrating on the more recent years first.

You do self assessment, so in theory you should not have undeclared sources of income or benefit in kind.

Are you saying "I have now noticed an error made by a former employer and was thinking of reporting it" or are you saying "HMRC have noticed the error BUT if I sit on my hands until next April, will it get written off from appearing on my SA statement?"

Mikeyorks

Touch79 wrote: »

It was this paragraph in particular that caught my attention 'Legislation means that tax underpayments cannot be pursued more than four years after the relevant tax year, except where they involve illegal activity'.

The whole article you point to is misleading. As the source is 'The Sun' perhaps unsurprising.
At the moment HMRC are issuing automated reconciliation statements for 08-09 and 09-10 ........ the first time this has ever been done. But it will be an annual exercise from now on. What the article is saying is that they will not go back to 06-07 and it will just 'lie on the file'. As far as I can determine - the same will apply to 07-08.

All of this is PAYE ...... not SA.

Touch79

John_Pierpoint wrote: »

I am confused by your posting.
The background to this is that HMRC got into serious arrears with their reconciliation, when struggling to implement a new computer system. They are now catching up and sensibly concentrating on the more recent years first.

You do self assessment, so in theory you should not have undeclared sources of income or benefit in kind.

Are you saying "I have now noticed an error made by a former employer and was thinking of reporting it" or are you saying "HMRC have noticed the error BUT if I sit on my hands until next April, will it get written off from appearing on my SA statement?"

I haven't just noticed an error, I was aware of it some time ago, as were HMRC. The only reason it hasn't been paid so far is that I haven't had the means to do so, and, as I mentioned, I intend paying this balance off in full within the next two months or so.

Had I not seen the article linked I wouldn't have even considered that it might be about to be written off, and the reason for my post was to ascertain whether the information was correct or not.

It also crossed my mind that if the information was correct, it might in some way explain why HMRC have not taken any kind of steps to try and recover this money.

Touch79

Mikeyorks wrote: »

The whole article you point to is misleading. As the source is 'The Sun' perhaps unsurprising.
At the moment HMRC are issuing automated reconciliation statements for 08-09 and 09-10 ........ the first time this has ever been done. But it will be an annual exercise from now on. What the article is saying is that they will not go back to 06-07 and it will just 'lie on the file'. As far as I can determine - the same will apply to 07-08.

All of this is PAYE ...... not SA.

I am aware that the current HMRC issues relate to PAYE, but if the statement was correct about them being legally unable to collect underpaid tax after a certain point, then it wouldn't matter.

During the whole of 06/07 I was PAYE, but was later required to submit SA also which is how the error came to light.

Mikeyorks

Touch79 wrote: »

During the whole of 06/07 I was PAYE, but was later required to submit SA also which is how the error came to light.

Fine. But also bear in mind that any due date is then created by SA ..... the earliest of which will be 31st Jan 08, for that year.

Later ....... because you mentioned 'unable to pursue' initially ...... I hadn't really connected that this really relates to the retraction of the current 6 year period for claiming refunds. And it hadn't clicked until I read this later thread. I've posted a bit from HMRC that's relevant :

https://forums.moneysavingexpert.com/discussion/2870068