Back Tax Demand

rollon65

Good evening Jem16,

The P800 03/13 Leaflet gives 4 suggestions and the most likely, as you say is tax owed from a previous year (but why should we be left to guess?).
The hints for the future are really useful and we shall bone up on those areas in order that we are not so naive hereafter.
Your continued patience with our somewhat feeble knowledge of our tax affairs has been exemplary and much appreciated as has the amount of time you have devoted our cause.
We shall assume for this thread to be closed now then.

Kind regards - rollon65 (and Mrs rollon65!).

John_Pierpoint

The age related personal allowance used to apply to the tax year in which the tax payer became 65, is it possible that the chancellor could not change the rules until he had got the tax bill through parliament ?

jem16

John_Pierpoint wrote: »

The age related personal allowance used to apply to the tax year in which the tax payer became 65, is it possible that the chancellor could not change the rules until he had got the tax bill through parliament ?

The OP was entitled to it - just got his dates mixed up.

rollon65

Hello jem16,

No - we didn't give up - far from it!

Subsequent to advising them that we had approached The Adjudicator's Office for a ruling, my wife has just received a letter from HMRC saying that she should never have been sent a "Final Demand" letter re her tax situation and that not only does she not have to pay the amount requested, but they would be sending a cheque for £50 in respect of the costs incurred in pursuit of making her point.

Ultimately, the points we made were as follows:

The first was based on the misinformation factor involved.

We researched the fact that significant changes were applied to State Pension legislation for the tax years in question, which prompted us to have concerns about how well the staff on the ground at HMRC had taken these changes on board.
We were still adamant that she was told that the decision over which tax year to take the deferred pension lump sum was purely academic as there was no difference in her income tax situation.
Even though HMRC had singularly failed to come up with the audio record of that conversation, we were still of the conviction that the individual concerned had quite simply looked at the two gross income options available to her and had seen both as being over the taxable income threshold and therefore made that statement.
What was missing from their calculations was that the ruling is/was that her income tax application should be made at the prevailing rate, ie: 20% on all earnings above that threshold for the tax year 2010-2011 for part of which she was still working; or 0% for the tax year 2011-2012 when her only income was her State Pension of £6,320, which is quite clearly under the threshold level of £7,475.
Even though we knew this to be the case, how could it be proven when they had not come up with the audio record of that conversation? It was just their word against hers. Somebody had made a quite simple mistake and they were not prepared to own up to it on the basis of looking after their own.

The second issue was that of permitted notification timescales.

HMRC has to notify the tax-payer within 12 months from the end of the relevant tax year if it receives any information upon which that persons income tax liabilities are re-assessed.
They missed the mark by two months.

Best regards - rollon65.

jem16

rollon65 wrote: »

Subsequent to advising them that we had approached The Adjudicator's Office for a ruling, my wife has just received a letter from HMRC saying that she should never have been sent a "Final Demand" letter re her tax situation and that not only does she not have to pay the amount requested, but they would be sending a cheque for £50 in respect of the costs incurred in pursuit of making her point.

Glad to see that it's all worked out for you and your wife in the end. Looks like it has paid off going down the appeal route.

Hopefully with your newly gained knowledge you will be able to keep on top of your tax affairs and prevent this from happening again.

I assume you have thoroughly checked your tax code for 2014/15?

rollon65

hello jem16,

Yes - we have checked our current tax demands, but my wife will now have to be re-assessed.
In my own case, I am waiting for April 5 2015, because by then I shall have paid off my own back-tax owings and as a result, no longer having to shell out for that will mean a bit more cash in my pocket.

Thank you once again for your help.

Kind regards - rollon65 (over . . . and out, at last!).