Inland Revenue demand for £8997

MartyBoy

Hi All,

I am hoping someone can help me. 3 months ago, I became aware that the Inland Revenue are claiming they did not receive a Self Assessment declaration from me for 2003/2004. They made a determination against me for £500 and now with interest and charges I owe nearly £9,000. I was not aware of this until 3 months ago. I submitted Self Assessments for all following years and the Inland Revenue (despite clearly knowing my address) have never made me aware of either the original determination or the interest and charges being added every year.

I have appealed to the relevant Tax Office but the Debt Management arm of HMRC has now issued Court Proceedings against me. It takes 3 months for the Tax Office to respond to a letter and when they do, they only address 10% of the points I have raised. The phone lines are continually engaged.

Does anyone have any advice? Should I offer to compromise and pay them £4,000 (all my savings) as a final settlement or should I pay the debt off in instalments? Or go to court and have my day?

Any advice would be appreciated.

Martyn

antonic

Can you clarify the following before we can try & help

1) How did you become aware of this debt from 2003/4 ?
2) Have you had a visit from a Field Force Agent, or was it done by post ?.
3) Court proceedings USUALLY start after a visit from a Field Force Agent who has decided you have insufficient assets to pay this debt.
4) Did you appeal the original determination as a determination is USUALLY issued when there is a missing return
5) If they are threatening Court Proceedings the debt will be dealt with by the Enforcement & Insolvency Service in Worthing NOT your the Debt Management Unit.
6) The EIS office MAY accept a repayment plan BUT all returns must have been filed.

Hope this helps

chrismac1

I recommend getting some sort of representation. For a start, HMRC had 3 years - now 4 - to make a determination on a 2003-2004 return, so that expired on 31 Jan 2008. If you can access your account online via your UTR, you can identify from the statements exactly when they first made a determination. Also there have been two Tribunal cases in the past year which could help you:

1. Poor communication by HMRC led to a big reduction in the final bill for one taxpayer.
2. There was another one where the level of interest and charges was out of all proportion to the tax due and the Tribunal quoshed most of this.

Tribunals are not legally binding, but are independent of HMRC and often take a very dim of view of the general incompetence and unreasonable behaviour - not to mention lack of integirty at times - with which HMRC often pursue people in your situation. Pay them nothing. If you are going to make them an offer I'd suggest whatever you think is the right amount of tax for 2003-4, plus interest at 5%.

So let's say you agree the £500. Offer £703.55 which is £500 plus 7 years' interest at 5%. You've then made them a reasonable offer and the boot is on their foot to either accept this, make a counter offer, or carry on being silly and going for the £9k.

MartyBoy

Thanks so much antonic and chrismac1

MartyBoy

antonic wrote: »

can you clarify the following before we can try & help

1) how did you become aware of this debt from 2003/4 ?
I became aware of it via a letter from the inland revenue debt collection department in bradford. This letter was generated as a result of me realising that i had incorrectly stated my income in my 2005/2006 return and requesting a refund of overpaid tax.
2) have you had a visit from a field force agent, or was it done by post ?.
Via post.
3) court proceedings usually start after a visit from a field force agent who has decided you have insufficient assets to pay this debt.
I have not received any visit from any agent.
4) did you appeal the original determination as a determination is usually issued when there is a missing return.
I did appeal but have not received any reply.
5) if they are threatening court proceedings the debt will be dealt with by the enforcement & insolvency service in worthing not your the debt management unit.
They have already added court costs of £95. Perhaps the bradford debt management and enforcement unit is the equivalent northern office.
6) the eis office may accept a repayment plan but all returns must have been filed.

Hope this helps

- thanks so much!

MartyBoy

chrismac1 wrote: »

I recommend getting some sort of representation. For a start, HMRC had 3 years - now 4 - to make a determination on a 2003-2004 return, so that expired on 31 Jan 2008. If you can access your account online via your UTR, you can identify from the statements exactly when they first made a determination. Also there have been two Tribunal cases in the past year which could help you:

1. Poor communication by HMRC led to a big reduction in the final bill for one taxpayer.
2. There was another one where the level of interest and charges was out of all proportion to the tax due and the Tribunal quoshed most of this.

Tribunals are not legally binding, but are independent of HMRC and often take a very dim of view of the general incompetence and unreasonable behaviour - not to mention lack of integirty at times - with which HMRC often pursue people in your situation. Pay them nothing. If you are going to make them an offer I'd suggest whatever you think is the right amount of tax for 2003-4, plus interest at 5%.

So let's say you agree the £500. Offer £703.55 which is £500 plus 7 years' interest at 5%. You've then made them a reasonable offer and the boot is on their foot to either accept this, make a counter offer, or carry on being silly and going for the £9k.

THANKS SO MUCH - I will make a written offer.

BoGoF

I think we're missing an important point here, the determination was for £500. Even though this would have generate payments on account of £250 each for the following year there is no way the interest on that balance would take it to nearly £9000.

You need to give us a more detailed breakdown of the charges as there appears to be more than this than a case of a £500 determination.

chrismac1

I've assumed that most of it will be penalties.

MartyBoy

Thanks chaps. The latest letter from HMRC does state that the £500 has turned into nearly £9000 with interest and penalties. There are no other charges added to it. I will make them an offer.

BoGoF

Two x £100 penalties plus the £500 determination plus the POA's of £250 each = £1200......seems a helluva lot of interest to make it £9k? Ask them for a latest statement of account.

Have you actually sent in a 2003-04 Tax Return yet?

MartyBoy

BoGoF wrote: »

Two x £100 penalties plus the £500 determination plus the POA's of £250 each = £1200......seems a helluva lot of interest to make it £9k? Ask them for a latest statement of account.

Have you actually sent in a 2003-04 Tax Return yet?

I've asked the Newcastle Office if I can submit one. It's taken 5 letters and 4 phone calls and I still don't have an answer.

I sent a written offer via recorded delivery this morning. I will keep you guys up to date with progress. Thanks once again!