HMRC Underpayment of tax and Payment Plan

Justiceforme

I have just been notified that I owe £800.00 in unpaid tax, this is due do to the bereavement of my late husband in 2022 and other circumstances. I believe the amount owing is correct but don't have much experience in taxation. 
I have been advised to pay as much as can I each month until Jan 2024, then a payment plan can be set up. They cannot collect the tax by changing my tax code because I'm a pensioner and my income is too low. Any advise on how to lawfully pay less tax in future and how HMRC tax payment plans work would be very much appreciated. Thanks in advance.

Dazed_and_C0nfused

Is the £800 a Simple Assessment bill?

If so just pay what you can between now and January and then offer what you think is reasonable to clear the balance.

As a widowed pensioner there probably isn't a huge amount you can do to reduce any tax liability, the most obvious thing would be if tax was going to be due on interest from non ISA bank/building society interest?

If so and you haven't used your cash ISA allowance then consider if moving some funds to a cash ISA might give you a better overall return.

For example 5.5% after 20% tax would be 4.4% net but 5.0% in a cash ISA would be tax exempt so you get the full 5.0%.

eskbanker

Justiceforme said:

I have just been notified that I owe £800.00 in unpaid tax, this is due do to the bereavement of my late husband in 2022 and other circumstances. 

Are you sure that this is a liability for you personally or is it his debt, to be met from his estate (or written off if insufficient funds there)?

Justiceforme

Its a simple tax assessment, so I'm responsible, there are no debts left to pay. Thanks

jem16

Justiceforme said:

It’s a simple tax assessment, so I'm responsible, there are no debts left to pay. Thanks

Yes but I think the question is, was the simple tax assessment based on your tax affairs or based on your late husband’s tax affairs? If yours then of course you have the liability but just not sure what the bereavement has to do with it unless you received either Breavement payments or your state pension increased. 

Justiceforme

It was based on the my tax affairs, after I inherited his part pension. So my income was increased thats what caused the underpayment.  Thanks