tax bill - what can I do?

worriedsick82

Hi folks,

I have been hit with a 6k tax bill. I won't go into details but basically I cant afford to pay it in one year. It will hit my take home pay by £600 per month based on the tax code they have sent me.

I am already in a lot of debt which I am working on repaying (30k)

Do you think that they will let me spread it over 2 -3 years? I feel sick as a dog. It is also sunday so I can''t do anything today

runforlife

Try not to worry. There are mechanisms within HMRC that allow for debt repayment over time. You will need your current budget / statement of affairs before you contact them. Make sure you compile one before you speak to them.


Here is their Manual Of Guidance that tax officers follow when dealing with debt. Remember this is guidance for tax officers when dealing with members of the public but equally as useful for members of the public to be aware.


There is a lot to read so grab yourself a cup of tea, some paper and a pen! Good luck.
Index - Debt Management and Banking Manual: Introduction: Main Contents
http://www.hmrc.gov.uk/manuals/dmbmanual/index.htm


Time to Pay
http://www.hmrc.gov.uk/manuals/dmbmanual/DMBM800000.htm


Debt and return pursuit
http://www.hmrc.gov.uk/manuals/dmbmanual/DMBM514000.htm


Debts collected through the tax code
http://www.hmrc.gov.uk/manuals/dmbmanual/DMBM802205.htm


Time to Pay requests: debts less than £250000
http://www.hmrc.gov.uk/manuals/dmbmanual/DMBM802210.htm

Above three months

You need to ask questions based on the Individual Debt Negotiating Framework (PDF 21KB) to help you decide whether TTP is appropriate.
TTP arrangements exceeding 12 months are exceptional and you must be satisfied that any arrangement exceeding 12 months is necessary and that the customer is able to adhere to the arrangement and its terms. In some cases where over 12 months is required you may need more information than on the Debt Pursuit Negotiating Framework. If this is the case you should obtain the details on the Income & Expenditure Form (Excel 63KB).

Note that whilst it says exceptional you should be able to achieve an extended period of time. We did. However be willing and negotiate to a solution that will suit yourself and appease the taxman.

pathtofreedom

If it was me I'd just phone them and ask for a payment plan and see over how many years you can get. If it was a smaller amount they'd adjust your tax code to take it that way, but 6k would be too much to do that in one year unless you're a very high earner.

worriedsick82

runforlife wrote: »

Try not to worry. There are mechanisms within HMRC that allow for debt repayment over time. You will need your current budget / statement of affairs before you contact them. Make sure you compile one before you speak to them.

Note that whilst it says exceptional you should be able to achieve an extended period of time. We did. However be willing and negotiate to a solution that will suit yourself and appease the taxman.

Thank you so much x

worriedsick82

I have just worked out that I actually owe about 4K but they have amended my tax code to k678. Doesn't this mean that they will take an extra 6780 tax from me? I don't owe that much???

Jon_B_2

Pop your tax code into Martin's Income Tax Calculator http://www.moneysavingexpert.com/tax-calculator/

That should tell you what your take home will be.

runforlife

Is the K code not a temporary tax code?