Summary warrant

jennifernil

Has he got a P2 Notice of Coding to explain why his Tax Code is different from the standard one? From your previous post, he appears to have an extra £2770 of allowance, does he have job expenses or something like that?

I will leave the experts to go over the payslip, but I see the "gross for tax" is higher than the "gross pay" on this payslip, but not in the running totals. And a deduction for pension of £11.80 is very low, is this a non-contributory scheme? Not that it matters for tax.

Haven't got my calculator here, but on a normal 747 tax code, the annual tax on £90k would be about £26/£27k.

Rates here.....

http://www.hmrc.gov.uk/rates/it.htm

If you are willing to post the details off the letter/calculation he got, someone might be able to make sense of it for you. I know these statements are not easy to understand!

Have you compared their figures to those submitted on the SAs? That would be my first action.

Purdy2011

He contacted the tax office when he handed back the car years ago and this is the code they put him on and they have never made contact to change it - we assumed this was the correct one as they decided on it. The only expenses he gets are if he uses his own fuel for work and he puts in an expense claim form and it is reimbursed. This can amount to a few hundred ounds a month but never thousands The letter we got just lists all the sa balancing charges and they are the same each year but they dont match the SA form he filed. I am getting so confused with it all and panicking about it.

jennifernil

I know it must be stressful getting such a huge bill, but I really cannot see that this much could be due over only 5 years.

Has he been submitting SAs all that time? Is he sure there are no mistakes in the figures submitted? Did he receive a tax calculation from each one?

Can you dig out the income figures for each year, get paper and calculator, use the correct figures for the tax allowances and bands for each year, ( don't forget to add the car benefit to the correct year ), and work out what the correct amount of tax was for each year. It is quite easy to do if you are methodical. Ignore the tax code, and ignore NI deductions.

Ignore the fuel expenses unless he has been paid more than the allowed amounts (you need to check that). You also need to add in the BUPA and anything else given on each P11D.

Then compare your results with what they are saying, tick off what you agree with, circle any wrong amounts. I would then ring HMRC once they open again and query these amounts. I know they were not helpful before, but they must be able to justify their figures before demanding the tax!

You said your OH had been in discussion with them before and agreed (?) the roughly £7000 payment, so it is strange that they suddenly come up with this.

Even being on a wrong code for 5 years could not amount to £70k underpaid, even with interest. The penalties could mount up, but unless he has submitted wrong figures, or not submitted on time, or not paid when requested, there should not be penalties IMO. It sounds like they are assessing him on income he does not actually have, or they may believe he has not declared everything and are making their own estimates.

Purdy2011

ok i wil ask hin to bring home the forms for me to look at. I dont know all the answers to your questions and he is at work (!) i will email him though and hopefully i can sit down and try and make sense of it - the only thing that wasnt paid on time was the £7000 but he was discussing this with HMRC so would penalties still be applied?
IMO the £14k annual amount is their assumption based on his car etc but he has filed SA forms stating what benefits he does and does not get.
when his accountant looked over the files he agreed with the tax office before xmas that he owed £7k, we cant get in touch with the accountant as he is on holiday.
how do i find out he tax allowances and bands for each year? excuse my ignorance but this really isnt my area of expertise which is why I am so worried about it.

The reason is has dragged on is also because the tax office lost his file so he had to resend all his SA forms which he did via his accountant and they were sent recorded delivery it took them a month to find the delivery and the whole thing has been one thing after another and now this bill arrives during the holidays - Why would they have put him on a differant code in the first place and was it his job to keep asking if it was the right one?

jennifernil

Some historical figures here if you need them.....

http://www.taxfix.co.uk/tax-rates.html

antonic

Has he been paying the amounts due under SA everytime he has been submitting returns ?.

If he hasnt this will be why he has balancing charges on his SA statement.

jennifernil

Yes, they might well add interest to the unpaid £7000 amount, not sure about penalties, but it would not surprise me!

Re the code number.......he should have had a P2 Notice of Coding that explained why he had the particular code, and as it was not the normal one, possibly a new P2 each year as the allowance generally increases each year. Is there a letter after his code number?

It is the taxpayer's responsibility to check the code is correct and contact HMRC if it isn't. So he should have read what the P2 said and queried anything he did not understand or agree with. There would be notes on it explaining various abbreviations.

ceeforcat

Yes - but the op has mentioned that the BC are £14000 plus with POA each year of £7000 - interest or penalties would have no effect on these figures. The question remains as to how we have an underpayment of £14000 each year.

ceeforcat

Mikeyorks wrote: »

How can we be? We haven't a clue what has been going on since 2006.

If the OP suggests they've just had the figures together with an imminent threat ....... you can guarantee we only have the tip of the iceberg. HMRC do not move that quickly.

I was only referring to the conversation that the op husband had with HMRC. The fact that the staff member, these days, appears to know absolutely nothing regarding the individuals tax affairs is par for the course.

Purdy2011

i cannot get through to him on his telephone to ask him these questions but if the accountant agreed he owed £7000 it would seem he has paid the correct amounts for subsequent years since the company car year?