Underpaid Tax Demand....Slightly Worried!

waribai

I hope I have posted in the right forum. I have basically received a demand for £2100 in unpaid income tax from HM Customs & Revenueunder their P800 tax calculation. Essentially, I have paid all my tax for 2009-2010 at Basic rate when I should have paid higher rate on about £5000. No real arguments about this except that I pay everything via PAYE.
I think the problem stems from the fact I had three jobs simultaneously so two of them deducted tax at basic rate and the other one used the BR code.
This has come at the worst possible time as I am dealing with a family emergency at the moment which is consuming a great deal of cash.
My questions are: How much of this is my fault? Should I have informed the taxman that I think I am not paying enough tax? For me £2000 is a lot of money to pay back in one go! Do I have any grounds on which to appeal?

Any advice would be most appreciated!

Mikeyorks

waribai wrote: »

Do I have any grounds on which to appeal?

Not really. If it was an earlier year you might just have some options ..... but not for 09-10. Unless you have specifically given them information they haven't acted upon.

The main thing is to get it resolved for the current year if the circumstances are still the same - otherwise you're accruing arrears still. As the underpayment is over £2k they won't code it out and will contact you after 31st Dec. Likelihood is they will cut it across to SA to create a specific due date .... very likely to be 31st Jan 2011. Which should give you some time to resolve the family issues?

jem16

waribai wrote: »

I think the problem stems from the fact I had three jobs simultaneously so two of them deducted tax at basic rate and the other one used the BR code.

One job should have had your tax code allocated to it and the other 2 jobs should have used the BR code.

What codes were allocated to each job and how much was the gross income on each?

Should I have informed the taxman that I think I am not paying enough tax?

Yes you should have realised, especially if as you say only one of your 3 jobs had a BR tax code.

Do I have any grounds on which to appeal?

Unlikely unless you can prove that you had informed HMRC of your 3 jobs and made an effort to get the tax codes sorted.

waribai

I see. Thanks for the advice.

The taxable grosses were:

Job 1 £27660 (647L)
Job 2 £12313 (647L)
Job 3 £7954 (BRC)


So should I even try to appeal/claim hardship or could that make matters worse?

Thanks.

Murdina

It's virtually impossible to argue that the concession A19 can be applied to 2009/10.
Even then HMRC would say surely you noticed you were getting 2 personal allowances.
As stated above, first off check things are right for this year.
Then when HMRC actually ask for the money see if you can arrange time to pay.

The only other option might be to ask HMRC to push it back at the employer with whom you started the second job on which the personal allowance was given on the grounds they did not operate PAYE correctly. That employer should have given you a form P46 (maybe they did and you did not fill it in - but even then they should default to using basic rate). However, if you are still working for them it might put you in an awkward position.

Also even if the second employer had used BR you would have owed some higher rate tax. So prob not much mileage in that one either. The system is changing from April 2011 to try and avoid the problem of people liable at higher rates only have tax taken off at basic rate, but it will still not be a perfect solution.

Pennywise

What was the position for earlier years? Did you have three jobs for 08/9 and earlier? Your only hope for the ESC concession is that the situation giving rise to the underpayment existed for earlier years as well - which brings in the "repeated" part of the concession which if applies would apply to 09/10 also. So, basically, if you'd had three jobs for earlier years and HMRC havn't got your tax codes right for those, then there may be a chance of you claiming the concession on the "repeated" grounds because HMRC havn't acted on information they've been given in prior years.

antrobus

In the circumstances outlined it would be entirely normal for HMRC to issue a demand for the higher rate tax due at about this time. If you have three jobs then HMRC would not have been in a position to know that you were liable for HRT until each of your employers had submitted their 2009/10 returns in May 2010. It's nobody's fault, you just owe HMRC £2100.

waribai

Pennywise wrote: »

What was the position for earlier years? Did you have three jobs for 08/9 and earlier? Your only hope for the ESC concession is that the situation giving rise to the underpayment existed for earlier years as well - which brings in the "repeated" part of the concession which if applies would apply to 09/10 also. So, basically, if you'd had three jobs for earlier years and HMRC havn't got your tax codes right for those, then there may be a chance of you claiming the concession on the "repeated" grounds because HMRC havn't acted on information they've been given in prior years.

Thanks for the advice so far. It is much appreciated.


Yes, the same situation did exist in 2008/2009 but I think the big difference then was that I did not earn as much as I started working in July 2008 after returning from abroad.
I could mention the 2008/2009 year to them but am I not possibly opening a can worms?

antrobus

If you started work in July 2008 after returning from abroad then you would have had only 9 months of income in 2008/09, so you wouldn't have hit HRT even if you were earning at the same level as 2009/10. There's unlikely to be any further liability, but it confirms that ESC 19 is a red herring. I'm afraid you will just have to make arrangments to pay the £2100 that you owe.

jennifernil

If the OP had 3 jobs in 08/09, and similar tax codes for them, then he has had 2 personal allowances in that year too. There would not be Higher Rate liability, but he will still have underpaid.

waribai

Thanks for the advice. Yes, it looks like I'll have to pay. I'll write and see if they will let me pay over the year. Wish me luck!