HMRC checking 11/12 tax return

bitsandpieces

HMRC have written to me to say they're checking my 11/12 tax return. They think (based on info from an employer) that I had an additional payment from that employer which wasn't declared on my return, and the extra tax due would be just under £1k.

Of course, if I've underpaid I'll cough up. I'll check with the employer next week (can't find my P60 and P45), but the numbers on my tax return look right to me.

If I have underpaid, though, might either of these be seen as a reason to waive interest/penalty?
- I was getting cancer treatment at the time I did the return, so not at my best organised with paperwork etc.
- the figures I put on my return were those given to me by the employer.

PlutoinCapricorn

Just out of curiosity, why do you fill in tax returns?

Did you copy the figures from a P60 into the employment section?

bitsandpieces

I'd lost the P60 but copied the figures the employer told me had been on the P60 (I have a paper trail for this).

I have a bad habit of earning £50 or so from freelancing every year. I think that's why I have to do a return

PlutoinCapricorn

Extra untaxed earnings would explain why you need to complete a return. What about payslips? The final one should have the totals.

I am still confused: surely your employer taxes everything at source? Even if you forgot to put a special payment on your return, it will have already been taxed?

bitsandpieces

PlutoinCapricorn wrote: »

What about payslips? The final one should have the totals.

To be honest, my paperwork from that year's in a mess - was in hospital for a lot of it. Will dig out what I can to check, and the employer should have a copy of things.

I am still confused: surely your employer taxes everything at source? Even if you forgot to put a special payment on your return, it will have already been taxed?

Yes, I'm in PAYE. The payer/employer has told HMRC I've paid some tax on earnings; HMRC doesn't seem to think this was enough, though. It does seem a fairly big discrepancy

PlutoinCapricorn

In your position, I would sit down with as much paperwork as I could find, including bank statements. Get the personal allowance for the relevant tax year. Use a spreadsheet if necessary. Work out yourself how much you think you should have paid, and see if there is a difference.

If you post figures on here, people can help if necessary.

Did you work for the same company between April 6th 2011 and April 5th 2012? Did you get any pay rises or was the salary the same throughout?

PlutoinCapricorn

The PA for 2011/12 was £7,475 - assuming that you were under 65 at the time. You should have paid 20% on anything over that - unless you were a higher rate tax payer?

bitsandpieces

Thanks. I think first plan is to get copy of P60, and then dig through the figures in more detail if that doesn't resolve any questions. The easiest thing for me would be if the employer just gave inaccurate info to HMRC, but I suppose that's unlikely

I did get a small redundancy payment from this employer, but these aren't taxable. Wonder if is is what has confused matters...

I'll post back when I've more info - thanks!

PlutoinCapricorn

Didn't HMRC provide a breakdown of their figures? Perhaps phoning them at a good time might be best, but only after you have assembled all the evidence. HMRC seem to be scratching around for possibly unpaid tax, and they have made some mistakes.

Was the redundancy payment £5,000?

bitsandpieces

Thanks again for the help. I've now got the correct figures from the employer - I see how HMRC calculated the underpayment. Entering the incorrect figures that this employer previously gave me onto my tax return meant the tax return form calculated that I'd made an overpayment of approx £500 where there was actually an underpayment of about that amount - hence the total now due to HMRC. I'll check whether these numbers include a redundancy payment of £1,500 or so - which should be tax free, I think? - but either way I will owe HMRC some money.

Once I've got my figures and evidence together, is it just a matter of phoning HMRC to apologise and confirm what I owe them? Is it also worth telling them that my error was due to inaccurate docs from my then employer (though of course I should have double-checked myself), and that I was ill at the time - in terms of mitigation?

PlutoinCapricorn

You have nothing to lose by explaining all the problems you had. So you are absolutely sure now that you really do owe them this money?