Tax calculation mistake
I employed a tax specialist to submit my tax return because there were several elements to it and I wanted it to be done correctly.
HMRC have retrospectively conducted a "Discovery Assessment" and conclude that I have underdeclared my earnings by £30,000. They want the tax, plus interest on that amount.
After several hours of pouring through my tax return, I believe I have found the problem, but would need this confirming before I go back to my tax advisor, who is being difficult about the whole thing.
Hypothetically then, If say a taxable gross earning was £100K (on the P45) and the redundancy payment was within that total, I guess you could only subtract the amount after the first £30K from the gross taxable earnings figure to arrive at an "Earnings" figure.
The redundancy can then be split out on the tax return as £20K taxable and £30K tax-exempt, as the redundancy totalled £50K.
On that basis you cannot subtract tax-exempt earnings from taxable earnings. I can see that he has deducted the whole redundancy payment of £50K, when I suspect he should have deducted only £20K.
Am I right?
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