Inland Revenue Debt of 133,914.43 ********Resolved********* ***

[Matt63]

Been earning via PAYE only for the last five years.

 

Had tax returns to fill in and found them too complicated. Couldn't work out where you had to calculate the tax that you owed. Arranged an appointment with local HMRC office 30th September, was told I had got the forms mostly correct. Photocopied the forms and posted them off to HMRC by recorded delivery.

 

They say they have not received them. I have told them when and where and they say they have still not received them.

 

Today I received a bill from the tax office for 133,914.43. I am paying £5 a month to my other debts. That's all I can afford. Do you think the Revenue will accept £5 a month?

 

Advice please?! Please help!

 

Thanks

 

Matt

[ims21]

Hi

 

If you have a tax bill of £133k for five years then you are an extremely high earner if your tax is paid under PAYE and you end up with a bill of that amount

 

Something not right here.

 

I think much more detail is needed on this

 

ims

[Matt63]

I wish I was a high earner! Sadly that is not the case but I did have employment from 4 different companies, one where I got my allowance, one on "BR" and the other two on "D0". I am convinced that the PAYE is correct, but I did find the forms confusing but the lady in the tax office said my forms were basically correct. But there was no where on the forms to put how much tax you thought you owed. But if tax was deducted at source then it has to be OK, right?

[ims21]

You need to check the calculation notices, which you would have received from the Revenue, against your P60s to confirm that the gross earnings figure each year is correct.

 

£133K over 5 years averages at an annual tax bill of £26k.

 

Given that you will have paid tax under PAYE already, the logic would suggest that this is a £26k underpayment each year on average which in turn would suggest that you are on "A hell of a salary".

 

Or the calculations are wrong.

 

Something isn't right

 

ims

[Guest]

matt

 

what were you doing prior to the last 5 years paye. self employed? is this an accumulated tax liability for the years before? that is/was not to be collected via paye? or is there an error somewhere?

Edited November 5, 2011 by Ford
typo

[caro]

You say you copied the forms. Can you take them another copy?

 

As Ford suggests this could be to do with the time before you were employed. If your code was BR then you didn't receive a tax allowance on your PAYE and paid 20% on your full salary.

 

Tax code D0 is for second jobs or pensions and you'll have been paying 40%. HMRC explains it here. http://www.hmrc.gov.uk/incometax/check-multiple-codes.htm#2

[Matt63]

Thanks Caro that's a good link. Thanks to the others for their comments. Am pretty sure there is no back tax, and having read the link, am pretty sure that I don't actually owe anything as it should all have been sorted out by the PAYE. Will phone them and see why they have sent this demand.

[caro]

Let us know how it goes Matt.

[Matt63]

Well I called them on Saturday, waited on hold for half an hour but could not get through, tried Sunday and they were shut, eventually got through today, all on an expensive 0845 number. Turns out they have a 4 week turn round on paper returns, and in the absence of having "processed" my paper returns they have decided to "estimate" (i.e. guess) my tax and then imposed late payment surcharges and interest on these estimates. What a wonderful system!

[caro]

Oh for goodness sake. Maybe if they didn't mess about guessing and got on with the paperwork they'd get more done!!

 

So what happens now?

[Matt63]

Well today I received a notice that they had "surcharged me" an extra £6,750 because I hadn't paid their incorrect estimate within 28 days. Phoned them up and to ask if they had received my tax returns yet and a pre-recorded message informed me that they were currently taking 5 weeks to process correspondence including tax returns. What a wonderful system they operate!

[rebel11]

You could consider visiting one of their centres, if there is one near you.

 

http://www.hmrc.gov.uk/enq/main.htm

[Matt63]

After six weeks they have finally processed two of my five outstanding returns. Guess what, they owe me about a thousand pounds for each of those years!

[rebel11]

Hi matt

 

That is good news, only 3 to go:-)

[caro]

Let's hope they owe you for the other 3 years too!

[jdes26]

Yep the local tax office are wonderful people

But looks like there gona make you very happy for Xmas with those refunds

[Matt63]

All the returns have now been processed. The total they now say they owe me is about £3,900. But they have decided they won't pay it until they carry out "security checks" which can take "several weeks". Great!

[rebel11]

Hi matt

 

Thats excellent news, well done.

[cerberusalert]

The IR has a cheek, they send you an erroneous bill then add penalty charges. They then realise that it is them at error and then make you wait for your refund because of security checks. Makes me wonder what these security checks may be.

 

Personally I would be getting in touch with my MP, although unfortunately they are all on holiday now for 28 days.