Tax underpayment help

missimaxo

My husband has received a letter stating that he has underpaid tax for 2009/2010.

In the year he was both employed and self employed, therefore in Jan 2011 I submitted a tax return for him. The self employment made a loss and that loss was carried forwards for furture years, ie. should not affect the tax calculation.

In that year, he had 3 jobs however, we forgot one of the jobs when completing the return. Over that and the previous year, he had a lot of unemployment and temporary (cr*ppy) jobs with poor employers. The one in question we thought he had left in 2008/2009, and whilst working for them he never got a payslip and when he left he never got a P45 (or P60 for the previous year!). When I completed his 2008/2009 tax return, I contacted HMRC and they issued a letter stating what he was paid and what tax was included and I used this on his tax return instead. When it came to 2009/2010 I did the same (as the employer afterwards was equally cr*ppy and we had no P45!) I have the letter from HMRC dated Jan 2011 stating what he had earned that year and they missed off the first employer, hence it was missed by me on completing the return.

Because the employer was missed, he received a tax rebate of £500 that year.

The letter from HMRC states that he has underpaid tax by £200 ish and also must repay the rebate of £500. I contacted them (and they breached DPA but I only found this out when I called them back) and they gave me the information from the company's return. I have then obtained copy bank statements and compared what the company have said to what he received and it is completely different.

So far, I have responded to HMRC enclosing the copy bank statements showing what he received. I have also enclosed their copy letter showing they made the mistake in telling me what he earned. We can't afford to repay the £700 they are incorrectly asking for let alone the £500 rebate. On my calculations, they owe us £50 for the period of employment which would offset against the rebate, but we would still owe £450. Is there any way I can get this written off as I used the info from them when doing the return.

Thanks

Xutl

missimaxo wrote: »

My husband has received a letter stating that he has underpaid tax for 2009/2010.

In the year he was both employed and self employed, therefore in Jan 2011 I submitted a tax return for him. The self employment made a loss and that loss was carried forwards for furture years, ie. should not affect the tax calculation.

In that year, he had 3 jobs however, we forgot one of the jobs when completing the return. Over that and the previous year, he had a lot of unemployment and temporary (cr*ppy) jobs with poor employers. The one in question we thought he had left in 2008/2009, and whilst working for them he never got a payslip and when he left he never got a P45 (or P60 for the previous year!). When I completed his 2008/2009 tax return, I contacted HMRC and they issued a letter stating what he was paid and what tax was included and I used this on his tax return instead. When it came to 2009/2010 I did the same (as the employer afterwards was equally cr*ppy and we had no P45!) I have the letter from HMRC dated Jan 2011 stating what he had earned that year and they missed off the first employer, hence it was missed by me on completing the return.

Because the employer was missed, he received a tax rebate of £500 that year.

The letter from HMRC states that he has underpaid tax by £200 ish and also must repay the rebate of £500. I contacted them (and they breached DPA but I only found this out when I called them back) and they gave me the information from the company's return. I have then obtained copy bank statements and compared what the company have said to what he received and it is completely different.

So far, I have responded to HMRC enclosing the copy bank statements showing what he received. I have also enclosed their copy letter showing they made the mistake in telling me what he earned. We can't afford to repay the £700 they are incorrectly asking for let alone the £500 rebate. On my calculations, they owe us £50 for the period of employment which would offset against the rebate, but we would still owe £450. Is there any way I can get this written off as I used the info from them when doing the return.

Thanks

The difference between normal PAYE calculations and Self Assessment is that the onus is on you (when Self-Assessing) to accurately tell HMRC about your income. If you miss off an employer and get a repayment, but that error is subsequently picked up then you are if nothing else morally obligated to repay the money. If I'd earned the same salary as you and paid £500 less in tax I'm sure you'd want me paying my due.

Similarly HMRC send out a disclaimer with any request for P60 information, which they state may not be a complete picture of your income as they rely on your employers to send the details to them.

It's clear this was no conscious attempt to defraud the public purse but it was you who made the error and therefore you who should 'make-right' the error by repaying the tax due.

It sounds as though a compliance officer has discovered the error and supplied what HMRC believe to be the accurate amounts. Your bank statements would be of some help in arguing your case but they only show the net amounts received. The gross pay and tax deducted could be anything. Payslips would be more useful in arguing your case, even if you only have a couple.

I know the above really isn't what you want to hear but I think frank honesty is better than false hope.