They sent my tax back! Why?

Badger_Lady

This was my first time submitting a tax return. I gave up work in February 2012 and went off travelling, returning for 12 weeks in the summer to do a spot of freelancing. I'd been planning this for a while so had plenty of savings to live off of. At the time I also rented out a room in my house, under the 'rent a room' scheme.

In October 2012 I dashed off to Australia, and in 2013 I started renting my old house out to multiple occupants again. I no longer qualify for 'rent a room' scheme, but the rent they pay me only just covers the mortgage and bills anyway so there's no taxable income.

I submitted my tax return online on 29th January 2014 for the year 2012-13 and calculated that I owed just over £1,500. I used my UK bank account to send it same-day (paying an extra £25 to do so), to avoid any late payment fines.

But today I logged into my online banking and found that the full amount had been returned! It just says 'INVESTIGATIONS' next to the credit amount.

Why could that possibly be? My first thought was that they decided to further investigate my tax return, maybe being suspicious of the short period of work, but if so would they really send all the money back first?

Or have I made a horrible mistake somewhere along the way?

agrinnall

I can't help with the reason for the return, but I really don't understand why you felt you had to pay £25 to make a payment of £1500 when a free transfer would have had exactly the same effect.

xylophone

but the rent they pay me only just covers the mortgage and bills anyway so there's no taxable income.

This needs to be declared anyway?
Perhaps they have returned your cheque pending an investigation into exactly how much HMRC think you need to pay?

zygurat789

Badger_Lady wrote: »

. but the rent they pay me only just covers the mortgage and bills anyway so there's no taxable income.

QUOTE]

The mortgage is not a deduction from rental income, ONLY the motgage interest.

Badger_Lady

zygurat wrote:

The mortgage is not a deduction from rental income, ONLY the motgage interest.

Yeah, I only pay mortgage interest

And I know it needs to be declared, but only for 2013-14. I was still under 'rent a room' for 2012-13. Which I declared.

xylophone that was my first thought too - but then I thought it was a bit strange to refund pending investigation, when they could just as easily keep hold of the money pending investigation. After all, isn't there a risk that they'd never get the full amount again?

I had to pay for a same-day CHAPS transfer to avoid late payment fines - the receiving bank account doesn't support Faster Payments so it would have taken 3 working days under the old, slow transfer process.

Mikeyorks

Badger_Lady wrote: »

My first thought was that they decided to further investigate my tax return, maybe being suspicious of the short period of work, but if so would they really send all the money back first?

No - they wouldn't do that. It's far too quick to have come back from HMRC - the last minute filers / payers tend to clog the suspense account up with missing / incomplete reference numbers and it takes weeks to work through. In any event HMRC have a firm policy of not rejecting money sent in 'conditionally' ...... so they certainly wouldn't reject a payment because they thought it inadequate for any reason.

I strongly suspect the CHAPS payment you made didn't get to HMRC and has bounced back because of incorrect detail. Check with your Bank and they may be able to tell you what 'Investigations' means. It's not a term HMRC would add to a repayment.

Mikeyorks

Badger_Lady wrote: »

I had to pay for a same-day CHAPS transfer to avoid late payment fines - the receiving bank account doesn't support Faster Payments so it would have taken 3 working days under the old, slow transfer process.

Indeed it does. The conspiracy of SA and VAT payments virtually took Faster Payments out of the water on the 31st. So I strongly suspect you aimed the payment (my earlier post) at the wrong account?

The HMRC links for the SA account are a bit of a dog's breakfast - but this is the link for Shipley based accounts. (It works for Cumbernauld as well - so totally unsure why HMRC don't say that!)

http://www.hmrc.gov.uk/tools/bankaccounts/s/selfassessment-shipley-uk.htm

comeandgo

I take it you did use the proper HMRC site and not one of the other advertised sites?

Badger_Lady

Mikeyorks wrote: »

Indeed it does. The conspiracy of SA and VAT payments virtually took Faster Payments out of the water on the 31st. So I strongly suspect you aimed the payment (my earlier post) at the wrong account?

Hmm. It was carefully copied from the Giro slip on my letter from HMRC... unfortunately it's Saturday morning here in Australia and I'm about to go off for a weekend's holiday, so I shall continue to be flummoxed until I can call the bank on Monday!

Thank you for your insights :beer:

scragend

Badger_Lady wrote: »

Yeah, I only pay mortgage interest

And I know it needs to be declared, but only for 2013-14. I was still under 'rent a room' for 2012-13. Which I declared.

xylophone that was my first thought too - but then I thought it was a bit strange to refund pending investigation, when they could just as easily keep hold of the money pending investigation. After all, isn't there a risk that they'd never get the full amount again?

I had to pay for a same-day CHAPS transfer to avoid late payment fines - the receiving bank account doesn't support Faster Payments so it would have taken 3 working days under the old, slow transfer process.

The only "late payment fines" you would have incurred if the payment had been a couple of days late would have been a few pence of interest. Certainly less than the £25 it costs for a CHAPS payment.

jennifernil

Badger_Lady wrote: »

Hmm. It was carefully copied from the Giro slip on my letter from HMRC... unfortunately it's Saturday morning here in Australia and I'm about to go off for a weekend's holiday, so I shall continue to be flummoxed until I can call the bank on Monday!

Thank you for your insights :beer:

You need to turn it over and read the "ways to pay" on the back, it tells you there the correct account to pay into (as linked to above) and it does accept FPs.