Underpayment of tax

m150984

Back in June I got a letter from HMRC saying I had over paid £3313 tax for 17/18 and that I was due a refund which I was over the moon about, months before I had downgraded my company car which was an high emissions car to a electric car so assumed it was to do with that. This week I got another letter from HMRC saying I owe them £2734 for under paying my tax during 17/18 which needs to be paid by Feb 19. I cannot afford to pay this to them and I’m actually so annoyed as to why they gave me a refund in the first place. Its actually all I can think about because I literally live month by month waiting for payday so I can live for a week before I’m broke again. I work for an large firm who do all my payroll and this tax stuff to me is a minefield. When I ring either HMRC or my payroll, both fob me off to the other. I’m starting to feel sick with worry that I’ll lose my house if I can’t pay.

Dazed_and_confused

months before I had downgraded my company car which was an high emissions car to a electric car so assumed it was to do with that.

Why assume anything? Did you check the calculation to see if it matches the P60 and P11D from your employer?

I cannot afford to pay this to them

What's happened to the £3313 you received? They only want part of it back.

I’m starting to feel sick with worry that I’ll lose my house if I can’t pay

This seems highly unlikely as you don't seem to be trying to evade paying tax. The tax was deducted by your employer. You got it back by mistake and now have to return it to HMRC. Unless you bury your head in the sand you won't have any reason to lose your house. Why not contact HMRC and see if they will let you pay it back over the a few months? Ignoring it is really the only way you could end up homeless as a result of this.

And in future keep a closer eye on your tax position, it's your responsibility, not just your employer's and HMRC.

chrismac1

Apart from the good advice about contacting HMRC for payment terms, the last post was really poor on a number of fronts:


1. The tax system in the UK is ridiculously complex. It is the longest tax code in the EU, most PAYE folk have no need to get into the details and when they do the HMRC webiste is so rubbish they usually end up more confused than when they started.


2. The culprits here are HMRC with 95% probability. Every week I get information from their database which is just drivel, the last time was just yesterday when a client's pension for 2017-18 downloaded totally the wrong numbers from the HMRC database. Real Time Information has turned out to be what we all said it would be, namely Real Time Misinformation. The employer has probably done everything right, on time, and HMRC has messed up.


3. The reason why people get worried is the nasty nature of the letters HMRC write and the things Debt Management say on the phone and in person. In the worst case of this, in a meeting where I was present and HMRC person said "You can lose your house over this." I replied "No, she can't. This VAT debt is in the name of her limited company, the house is hers personally so is not at risk." That's just one example but I can quote many others.


The fact is that we have a really rubbish tax service in this country, compared to other countries and compared to what we had in the 1990s before 2 dismal Chancellors - Brown and Osborne - totally wrecked it.


This poster has every sympathy. Any accountant will tell you that they deal with cases like this all the time.

Pennywise

chrismac1 wrote: »

The fact is that we have a really rubbish tax service in this country, compared to other countries and compared to what we had in the 1990s before 2 dismal Chancellors - Brown and Osborne - totally wrecked it.

100% agree with this. It's hard for younger people (who know no difference) to understand, but back in the 80's and 90's, our tax authorities and tax systems were actually very good. They were on top of things. People got their PAYE codes on time (usually correct) and people got their annual tax demands on time (usually correct) - if something was wrong, you could actually speak to the real person who changed the code or raised the demand to either find out why or get it changed/corrected.

The amalgamations made by Brown, together with his master plan of closing down local officers and using dumbed down call centres instead has been an unmitigated disaster. Added in to that were his, frankly weird and unfathomable, tax changes which made things far more complicated than ever before. What a master stroke, make tax more complicated, make experienced staff redundant and close offices, and hand it over to a dumbed down call centre to run instead - what could possibly go wrong???

And yes, Osborne was also a complete and utter waste of oxygen as he, too, was completely out of his depth, not helped by the meddling of the LibDems so we had conflicting tax policies that were never going to work.

The only half decent Chancellor of the last 20 years was Alistair Darling who at least tried to understand the job and tried to repair some of the damage. Jury is out on Hammond as it's too early to tell, but so far, signs aren't looking good in respect of simplification and making HMRC fit for purpose!

nick74

I agree completely with the above. I was an accountant in practice for 20+ years from the mid 1990s until a couple of years ago and it was quite shocking how badly the service provided by HMRC deteriorated over that time period. When I first started, querying a tax code change usually meant walking to your local tax office and speaking face to face with the person who'd calculated it. Now it means waiting on the phone on hold for ages to speak to a badly trained individual with an attitude problem, in a huge call centre at the other end of the country.

Ronald Reagan once said 'The most terrifying words in the English language are: I'm from the government and I'm here to help.'
The UK version should be 'I'm the Chancellor of the Exchequer, and I'm here to simplify the tax system.'

chrisbur

To start with I would suggest that you make sure you do actually owe this money.
If you put up the full details of the two letters and then your P60 details, your car details and details of any other taxable income, these can be checked.

m150984

I have a copy of the letter they sent saying I owe tax, my P11D, my P60, but I cannot find the letter which they sent when they refunded me. Is this enough?

Dazed_and_confused

It's a start.

You also need to confirm which country you were resident in for tax purposes in 2017:18 (presumably either Scotland or rest of the UK?)