tax owes me money but now taken back??

carole.uk

this is for a friend of mine not sure if anyone can help but any advice would be much appriciated
my friend recieved a £8,000 tax bill claiming he owes it to them because he was self employed and had not paid any tax.
Because he has never been self employed he ended up spending weeks in the local tax office and on the phone trying to sort it out. they then agreed after collecting all the paper work that he was not self employed and stated he not not owe this money but they owed him just over £1,000
he rang up today and was told yes we owe you money but because your self tax returns were late we fine you, so we are keeping the money to pay this. he stated how can i send self returns when i work for a company and they do all the tax , the tax people agreed that it was unfair but he still had to pay it! this all seems crazy to me are they allowed to do this? any advice anyone

youngbutwise

I'm sorry I can't give you advice on this but it does sound like they are completely out of order here since your friend is not self-employed.
Maybe Citizens Advice Bureau could help but I don't know for sure.
I hope he gets the money in the end.

Pennywise

Regardless of whether he is employed or self employed, HMRC have issued tax returns and presumably your friend hasn't filled them in and sent them back, hence the late filing penalties. As soon as they do complete and submit the returns, if no tax is owed, the penalties will be waived and he'll get his refund.

Doing tax returns is not limited to the self employed. Some employees and pensioners get them also. Once they have been issued, they have to be filled in and sent back, even if entries are mostly zeros or HMRC already have the same information elsewhere, hence the phrase "self assessment" - the legal onus is for each taxpayer to complete and submit tax returns as required.

All your friend needs to do is complete the forms and send them in, and then it will all be over and the refund will come through. They needn't waste time with CAB or anyone else - the end result is the same - the forms need completing and submitting.

chappers

If he is basically employed but recieving tax returns he can usually get them to take him off of the self assesment roll, but as pennywise says if he has been recieving returns he is legally obliged to return them.
Some starnge things happen in that black hole that is HMRC. When i first went to sign on as self employed in 1991 they told me I was already signed on as self-employed as a travelling artist.

carole.uk

thanks everyone for your advice, just on an update he never recieved the forms or he would ave told them straight away they had been sending them to an old address and only found out about the situation when he was made unemployed for a short while. he has filled all the forms in and also information from his previous employer this is how the tax people came to the conclusion they owe him money, i just thought it was out of order then expecting him to pay for not submitting the forms that he never recieved and it was there mistake,
thanks for taking time to read and answer

ctm_2

carole.uk wrote: »

i just thought it was out of order then expecting him to pay for not submitting the forms that he never recieved and it was there mistake

Did your friend actually tell HMRC that he had moved? It is his responsibility to do this, HMRC will not accept this information from thrid parties.

HMRC won't accept an appeal against penalties because they were sent to what they thought was the correct address, as the individual has not told them otherwise.

As much as people think it isn't, almost everything with our tax system places the onus on the individual to ensure things are correct and up to date. Assuming it is all fine and ignoring it all is really not a good idea.

spanishfly15

the penalties for late filing will stand if your friend owe's tax at the end of each year. If his liability is nil then the £100 penalty will be wiped out, similary if his outstanding liability is less the £100 the £100 penalty will be reduced accordingly, BUT interest will also be added for the time it has taken for your friend to complete and return the form, like CTM said, if your friend didn't tell HMRC that he's moved it's not really their fault that the forms were sent to an old address. If you friend is still in any doubt or confusion ask him to book an appointment to see a face to face advisor in his nearest local tax office, they really are the best people to explain it fully. CAB won't have any access to his records.

carole.uk

thanks again i will advise him to do that