Inland Revenue & Tax Errors

Sonea Fifer

Sonea Fifer

Sonea Fifer

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Hi there,

My OH and I went round to visit relations yesterday and the mood was some what sombre given they'd received a letter from the Inland revenue demanding just under £4000 in undercharged tax from two years ago :eek:

I'm sure we've all heard that the Inland Revenue has mistakenly undercharged 1.4 million people in income tax, from what I can gather on line the majority of the British public are of the opinion that people should not have to pay back the shortfall in tax, as it was not the individuals’ fault and would therefore be unfair. Now I can understand why the Government maintains that the recovery of these funds are crucial given our current economic crisis. Today it seems that only those with more than £300 to pay will have to foot the bill, the outstanding balance has been calculated at an average of £1,430 per underpaying taxpayer and will need to be paid over a maximum of three years.

Apparently our relation had queried the tax code given at the time, he called Inland Revenue and received confirmation that this was correct. He's planning on talking to CAB and Inland Revenue first thing Mon morning but is understandably worried about potentially having to find up to an extra £300 PM in order to resolve this error! I'm wondering if anyone else has been effected by this and received a tax demand as well? Also, given that they're allowed up to 36 months to pay this back, is interest charged on the outstanding amount?
 
Does seem very unfair to start demanding a large sum of money when it was not the persons fault but the fault of the taxman puting said person in the wrong tax bracket.

I recently got a letter off the Taxman but was fortunate enough to be given a tax rebate/refund of £400+ which was nice, I always thought i was paying to much tax and im hoping that i will get more back as the rebate i was given was for 2008 to 2009
 
For that sort of amount, I am sure if they can show genuine hardship caused by paying back the money at £300 p/m that they can negotiate a longer time to pay. Unfortunately, it is the burden of the tax payer to ensure they're paying the correct tax at all times. There may be mileage in arguing that he double-checked, and then itcould be argued that there should not be a requirement to pay.

That would rely on the tax man finding the recorded conversation which occurred whenever (this is gonna be next to impossible without dates/times etc) though.

I think longer to pay without penalties will be the best option.
 
He can negotiate the amount he has to pay back each month if he can't afford it, he won't have to pay an extra £300 per month, but this obviously requires him being able to agree a payment plan with HMRC. £125 per month should do it.

If he should have paid the tax originally it will definitely have to be paid back at some point. He does technically owe it after all.

I'm unsure about the interest he might have to pay but knowing HMRC I wouldn't put it past them.
 
£300 a month would pay it off in just over 1 year not in 3, how did you arrive at the £300 a month figure?

Other matter is, it is tax he owes. It hasn't been paid, and it is due to be paid. He should pay it, like everyone else does, just negotiate a rate of payback which he can cope with.
 
Sonea Fifer said:
Hi there,

My OH and I went round to visit relations yesterday and the mood was some what sombre given they'd received a letter from the Inland revenue demanding just under £4000 in undercharged tax from two years ago :eek:

I'm sure we've all heard that the Inland Revenue has mistakenly undercharged 1.4 million people in income tax, from what I can gather on line the majority of the British public are of the opinion that people should not have to pay back the shortfall in tax, as it was not the individuals’ fault and would therefore be unfair.
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While it's not the individuals fault they were given an incorrect tax code, it's their responsibility to make sure they're paying the correct amount of tax. Surely for a £4,000 underpayment (£2,000 each year) they should have noticed not enough tax was being withheld? £2,000 is a minimum of £10,000 taxable income, or £20,000 at a 40% rate. There's loads of websites out there which help you calculate your monthly net based on your gross so if it was no where near this figure, they should have really fought with HMRC to get the correct tax code. I do think they should be given 3/4 years to pay it back interest free but I also think they should have to pay the amount due.
 
While Kemik is right that it's the individuals responsibility to check their tax code, I imagine most people would struggle to distinguish a tax code from a car registration number.
 
While it seems demoralising, one gets a long while to claim(or get notified) for overpaid tax back so getting the same treatment for underpayments(when asked and proven to be the case) should only be fair.
 
vonhelmet said:
While Kemik is right that it's the individuals responsibility to check their tax code, I imagine most people would struggle to distinguish a tax code from a car registration number.
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True but if, for example, I'm earning £30k a year and only have £270 of tax coming out of my wage each month I'd wonder why I'm not paying anywhere close to 20%, even taking into account a personal allowance.

People should look at their wage slip and ask themselves if that sounds about right. The first thing I done when I got a full time job was go on one of those tax calculation websites to work out my net salary so I knew how much I could afford for a flat and things like that. If I received £160 more than that I'd question where it was coming from.

HMRC need to sort themselves out, but people also need to use some common sense, especially when it's your money. Fancy if they'd been on a BR code and HMRC never told them they weren't getting their PA for months or even years? They wouldn't have been receiving enough net and would never have known.
 
Good luck getting it written off, let us know if you do :)

My Dad was hit by this (or something similar, it was tax ****-up related) a few months ago, Inland Revenue demanding about £4000 back at something around £170ish per month...he is on incapacity benefit, he can't leave the house and he would be on the streets if I was not helping him with his rent because of this, he is even having to skip meals...********. They are utterly heartless, we have tried many methods via CAB and gotten nowhere :(
 
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Hikari Kisugi said:
£300 a month would pay it off in just over 1 year not in 3, how did you arrive at the £300 a month figure?

Other matter is, it is tax he owes. It hasn't been paid, and it is due to be paid. He should pay it, like everyone else does, just negotiate a rate of payback which he can cope with.
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Who the ____ has £300 spare to pay back a **** up?.
 
I was under the impression that assuming the taxpayer had given the taxman the correct information about their income then these back claims weren't enforceable more than a year after the occurence?
 
Kemik said:
http://listentotaxman.com/
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Thanks for that link - I'll pass it onto him.

Rroff said:
Does he have evidence that he queried the tax code?
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Unfortunately not, no :(

Jokester said:
I was under the impression that assuming the taxpayer had given the taxman the correct information about their income then these back claims weren't enforceable more than a year after the occurence?
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That was my thought as well, we'll see what CAB has to say tomorrow though. I take it no one else reading this thread is part of the X amount of other people being effected by this? I recall reading on line this would effect one in eight people!
 
Government agencies aren't responsible for their own incompetence and poor processes, no actual company would be able to behave the same way.

Sadly I'm not sure how much can actually be done about it.
 
If this had of happened to the Frenchists, would they be pleased to be working out easy repayment terms. I suspect Mr Sarkozy would be feeling the heat of a few molatov cocktails hurled at him and a national strike!
 
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