Undepaid tax.

Katykat

I havn't paid tax on my pension since 2010 due to being under the personal allowance threshold. I was appealing an ESA decision which I won and received a lump sum back pay. Although I received the back pay in 2012, it covers the period 2010-2011. This has now triggered a letter from IR to tell me i owe them £600. I phoned them and they told me that as this years tax code has already been sent to me, which doesn't take the under payment into account, then the repayment should begin next April. I told the guy that by then my only income will be a small privte pension and he told me that I might be able to pay it off over a longer period than 1 year. My question is, how long is the longest time I can pay it off?

Dazed_and_confused

Assuming the letter you got is a P800 calculation then it looks like you might have up to three years

http://www.hmrc.gov.uk/incometax/p800.htm#3

System

The 10/11 underpayment has to be collected in full by the end of 2014/2015 so you will not be able to have it included in your tax code over more than 1 year.
If your private pension is too small then they might not be able to include it in your code at all. In this case you would have to negotiate with the Underpayment Specialist Team who will arrange direct debit payments with you.

John_Pierpoint

Beware of the situation my late uncle got into in similar circumstances.
HMRC had loaded him with a "K" code against his pension; but that could only deduct a maximum of 50% out of his £1,000 a year private pension; as this was not enough, he was also being hassled with self assessment forms and payments demanded via that route too.
Recoiling the situation annually was a nightmare.