They giveth, and they taketh away

magicbobson

Grrr!!!

My wife received a tax rebate of £1974 during this tax year (not sure which year it was for, she got a couple). We thought "great" and cashed the cheque. It's gone now.

Today we received a letter saying she has underpaid by £2000 for the year 2010-11. The rebate of £1974 is shown as -1974 under the "tax paid" column.

Obviously this is maddening - and quite damaging to our finances. Are we stuck with it, or is there anything we can do?

Thanks in advance for any advice.

xylophone

Have you checked that HMRC are correct? Find your wife's tax returns for all the years in question and do the calculations - if HMRC are correct she'll have to pay up, but possibly by adjustments to her tax code rather than lump sum? http://www.hmrc.gov.uk/incometax/code-underpayments.htm

magicbobson

She doesn't do tax returns - she's a full time employee. She got made redundant a year ago, then started a new job a couple of months later. The redundancy money probably complicated things.

Mikeyorks

magicbobson wrote: »

Today we received a letter saying she has underpaid by £2000 for the year 2010-11. The rebate of £1974 is shown as -1974 under the "tax paid" column.

Unusual if, as you imply, the £1974 related to years other than 10-11. As they would normally re-open those years as an 'over repayment'.

http://www.hmrc.gov.uk/manuals/pommanual/PAYE90015.htm

All you can do is check all the figures for all the affected years. If they've got it right - you can ask they Code it out over > 1 year.

If you think you can't afford to pay the amount you owe or paying it through your tax code over one year would cause you financial difficulty, contact HMRC using the address or telephone number shown on your P800 Tax Calculation to discuss options for paying. You might be able to spread the payments over two or three years.

BoGoF

There's just not enough info to give any advice.

You need to dig out the original paperwork relating to the £1974 overpayment and tell us what year it was for, what income was included and if it was for 10-11 tell us what is different in the recent calculation showing the underpayment.