Ways to pay Tax Underpayment???

jimmo

An R37! That takes me back but that may provide a clue.
Going back more years than I care to admit to myself, in PAYE cases there were Schedule E Assessments and informal repayments.
If somebody was overpaid then, in a straightforward case, we could make an informal repayment using an R37. In less straightforward overpayment cases, and certainly in all underpayment cases, we had to issue a formal Notice of Assessment on form P70.
If somebody we had repaid informally thought the repayment was insufficient we could negotiate but if we could not agree there was no appeal process available. That would then require a formal Notice of Assessment, an appeal and a Commissioner's hearing.
When Self Assessment came into being that marked the end of the line for formal Schedule D, Schedule E and Capital Gains Assessments. From then on, the only formal assessment is a Self Assessment. However HMRC do have the ability to make a Determination but that is another animal.
On that basis a P800 is an informal calculation of an overpayment or underpayment. Whilst the Taxpayer concerned can negotiate with HMRC there is no formal Appeal procedure if the Taxpayer objects and no enforcement procedure if the Taxpayer does not pay up voluntarily.
So, its one thing or the other, pay up voluntarily or get dragged into the S A system.
You may think that is irrational, and I wouldn't disagree but, putting words like tax and logic in the same sentence, to use some famous words, is novel and contentious.

Mikeyorks

jimmo wrote: »

When Self Assessment came into being that marked the end of the line for formal Schedule D, Schedule E and Capital Gains Assessments..

I think that's the bit I'm neglecting. And tending to forget that PAYE assessments are informal and the old Sch 'E' Assessment / net underpayment was the formalisation.

It's still strange - however - that the 'voluntary' payment (P254 / P211) aligns very much with the old legacy systems. You don't expect to see it being trotted out again in relatively large numbers, given its cumbersome design.

picardygirl

picardygirl wrote: »

Thanks Gas Powered Toothbrush, the underpayment is £2700 so it wont go through the code.

We have just managed to get through on the phone (didnt think they would be open on a Saturday, and was in a queue for under 10 mins!), my OH spoke to a couple of very helpful people.

It was agreed over the phone we could pay back the debt over 36 months which is a huge relief, not trying to dispute the payment as already said ..... OH has two PAYE jobs, and the second one should have been taxed fully at 40%, which from April 2010 he has been, so this cant happen again!

They have said we would get another call at some time to confirm it and to set up payments etc but hopefully this is all sorted now.

We received another letter from HMRC this weekend, saying please pay full amount by 11 March ........ so my OH rang them up and said he called and arranged a payment plan with them back in January, to start from April 2011 and to await a further phone call ........ after being put on hold for a couple of minutes, the person came back on the phone and said yes can see the payment plan on your file and if we (us) dont hear anything by 6 April to phone back and sort it out then ......... has this happened to anyone else? Did it all work out ok, bit worred OH is going to receive a revised tax code for the year starting April 2011 to repay the whole amount in 12 months!

Gas_Powered_Toothbrush

The 'pay in full' letter will have been issued by one of the processing offices, who have a delightful habit of taking action without having read the notes on the taxpayer's file.

ladybez

Tell me about it!! On behalf of my daughter, a repayment schedule was set up to clear her tax arrears, AFTER the IR, sorry HMRC, suggested she took out a loan to cover it. 2 payments have already been made and upon return from holiday she received a letter asking for the full amount to be paid immediately. Man I spoke to was appologetic but apparently one side of their computer system cannot correspond with the other!! Bring back manual records!! I feel several phone calls will be made this year!

picardygirl

Just to update this thread ..... OH hadnt heard anything by 6 April so tried constantly for a week to get through to the tax office, when he eventually got through he was told, we tried to get in touch with you, but have been unsuccessful so have sent you a DD mandate out for completion.

As arranged, OH can pay back the underpaid tax over 3 years starting from 1 May 2011, direct debit has now been set up. Roll on April 2014 when its all paid off!