Urgent help, filled in tax return wrong and owe tax

ironman1

Hello all,

Hopefully someone can help me. I have just received a letter from HMRC saying I am being looked into due to a tax return I sent them last May. (Year 2010/11).

Basically for the first time ever I filled my return out online with help from a friend. I only worked 3 months of the year self employed so thought it would be easier than paying an accountant and alot of builders I know do the same.

Anyway it appears that I didnt put the figures down that I earned from my employer, only putting the figures from self employment. I honest 100% didn't realize this at the time and have no reason why i wouldn't do so.

The letter from HMRC says something along the lines of-

Name of payer/figure from YOUR return £0/ figure from payer £15,500. Tax from YOUR return £0, tax from payer £. Then it states the differences.

Basically I haven't put the Wages I received from my actual employer from when I was on the cards. It's not as if I could hide this info as I did pay the tax, well the firm did anyway.

On the back of the letter it says if the info is correct I will have to pay something like £1400 plus interest on unpaid tax?

I honestly cannon understand why this info was missing.

I have learnt a harsh lesson here and will always use an accountant from now on. But is there ANYTHING I can do? It's not as if I was hiding my earnings from self employment. My company from when was on the books clearly sent the figures from what I earnt and paid tax.


Thanks for any help you can give but it seems obvious I will have to pay £1400+ for this error, but it is a genuine mistake.

ironman1

Also it says 'additional tax to be paid' on the letter. but I did actually pay the tax, it was taken weekly out of my wages when i was on the books. Im so confused

agrinnall

You need to give us more information.

How much did you earn through self employment?
Was all of this declared on the return?
How much did you earn through employment?
How much tax did you pay on this?
What was your tax code?
What was the result of doing your SA online - did you have to pay tax or get a refund?

ironman1

Hi, sorry i don't have all the information on me as I have given the letter to my old accountant (who used to sort out my old firms taxes etc).

I earned something like 4,000 over the three months of self employment.
I declared all this and put my expenses etc in too.
I earned something like £14,000 through employment and paid around £1700 tax on that.
My tax code - 647L

When I completed the online assessment I received a £1505 refund.

The letter from HMRC hasn't even mentioned the self employed bit though, just from when I was employed through a completely different company on their books.

Hope this helps, I'm really worried to be honest

Mikeyorks

ironman1 wrote: »

When I completed the online assessment I received a £1505 refund.

Therein lies the whole problem. When you completed the Return did it not strike you that an overpayment of £1505 was wrong?

But you do need to look at your data as if you didn't enter the tax paid on the employment (£1700) ...... there would have been no refund due? So something doesn't compute? If you entered the tax from employment then how could you enter £zero of pay?

If you say how much profit (earnings less expenses) your self employment was .... and an accurate figure (you say £14k but then quote £15.5k from the HMRC letter) of the employment pay and tax - someone will do a basic computation.

ironman1

I didn't think £1505 was wrong as quite a few people told me that if you earned something like less than £5k in a year (through self employment) you get all tax paid back?

The 15k earned was through EMPLOYMENT not my self employed earnings.

I have the actual figures now.

The letter from HMRC says -

Name of payer (my EMPLOYMENT COMPANY)
Figure from your return £0
Figure from payer £13,505
Difference £13,505
Tax figure from return £0
Tax figure from payer £ £1660
Difference: £1660

So it seems that I didn't put my earnings from when I was employed. I am convinced I did but then again I thought the self assessment was due to me becoming Self Employed.

There is no reason for me to lie on here and I would not bother completely ignoring what I earned through employment. I paid the tax.

I can't believe this has happened to be honest

By the way my Self Employed earning for the 3 months was £4752. I paid £950 tax on that

chrismac1

I think you need to get an accountant on board. Issues to consider:

1. You may not in fact owe that much tax. if you got one box wrong, you could easily have got others wrong. Did you claim all expenses such as mileage, telephone, use of own home, protective equipment and any CIS deducted from you, for example?

2. Your submission in any case in my view is a clear-cut case of "failing to take reasonable care" or "careless error" hence any fine must - MUST - be at the lowest possible level. The maximum is therefore 30% of tax due, and I would be aiming for 15% by putting things right before the end of May. Clearly any legitimate steps you take to get the tax due down also get the penalty down too.

3. You are still within the time limit for a re-submission, though obviously cannot claim this has arisen because you spotted you got it wrong.

Gather together your source records, find an accountant who will quote you a fixed fee and who will commit to getting the ball back in HMRC's court by 31 May. if he or she does a good job, go back next year.

ironman1

Thank you for the reply. Made me feel a bit better. Do you know why they are saying I owe tax, are they claiming I never paid the tax from when I was employed?

I was about to send my return for last year (through an accountant) then get this letter

Mikeyorks

ironman1 wrote:

I didn't think £1505 was wrong

That only makes marginally more sense, I'm afraid. As if you didn't enter either pay or tax from your employment - where did the £1505 refund come from? As that isn't possible if you only suffered tax of £950 on the self employment. You can't get back more than you (stated you) paid - if the refund was fairly rapid after the Return.

However - someone will do a quick computation if you provide the profit figure (earnings less expenses) from the self employment.

Mikeyorks

ironman1 wrote: »

Do you know why they are saying I owe tax,

Simply - because you had a refund of £1505 that you were mainly not entitled to. Because the Return was wrong?

ironman1

By the way you are replying it seems that you believe I tried to get away with lying about earnings. All I can say is I didn't.

4 either didnt put my employment earnings or it didnt go through on the computer. My company gave my earnings and paid my tax so it's not as if I could somehow hide it