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How to get help with your tax problems
I have a problem with the Inland Revenue, which states briefly that I owe about £1,100 tax that I did not pay for two years in 2009 and 2010.
If the figures are correct, I am in no position to dispute them and will pay whatever it is my duty to do so.
All my working life I paid my taxes under the PAYE system. Then on retirement I took a part-time job for 11½ years and this small salary was also paid each month under PAYE.
Each year I would receive a P60 from my employers and pension providers, and details of my state pensions with copies were always sent to HMRC so it could calculate my tax coding.
When I received RF’s letter, I actually felt that he was expecting answers to his problem too quickly.
For instance, after the intervention of his MP, he reported that he had received a signed letter from HMRC and wrote back two weeks before his letter to me, which he sent because he had expected a reply by then.
Given the timescales and the fact that he has already involved another party I will not get deeply involved in this. However, for what it is worth, I am happy to provide a few suggestions.
Explaining the origin of the problems there have been over tax coding, HMRC says it used to have a number of computer systems to work out tax codes.
In the Seventies, when memory on computers was more limited, it had 12 different databases. This was OK when people had one job for life but became less efficient as different working and pension patterns developed. More job mobility from the Eighties put the HMRC system under strain.
A new all-in-one computer system came on stream early last year and there have, HMRC admits, been a few issues. In future, however, it sees this as being far more reliable than what there had been in the past. Having all the information at its fingertips should prevent problems arising from it not identifying an individual’s different sources of income and putting them together.
Part of the element of surprise in all this is that people supposed HMRC already had easy access to this information and that it was all factored into its tax demands. People on PAYE particularly expect that, once tax has been deducted, they have paid their full due.
However, the new system identified problems such as personal allowances having been set against two sources of income.
A charity worker reported to me that some scenarios this has thrown up can be quite distressing. This is especially so where people have recently stopped working and find themselves suddenly confronted with an unexpected demand. On the restricted income they now have, they may barely if at all be able pay.
HMRC assures me that it will listen sympathetically to people finding themselves in such a position and that payment by instalments may be negotiated. Even so, there remains the problem for some that these may still not be affordable.
Also HMRC tells me that, where it has been provided with information and failed to act on it within the usual time window 12 months from the end of the tax year in which the information is received it may write off the liability. This could apply, for instance, where it had been told about a pension but had failed to factor it into its calculations. A strong proviso is that the taxpayer has to have had a reasonable expectation that their affairs are in order.
HMRC says it is prioritising refunds of any overpayments made by people on lower incomes.
After MK wrote to me a couple of months before this was resolved, he took the matter further under his own steam through the HMRC complaints procedure. He heard in May that, under the “extra-statutory” powers that allow a relaxation of the rules for the reduction of tax, HMRC is not, after all, asking for the money back. It is also refunding the amount already taken. HMRC accepts that it had received the information to work out MK’s new tax code but had failed to act on it. Others may take heart from this outcome and keep persevering.
Those in similar situations might first talk to their tax office and, failing that, then write to it. Should they still be unhappy. they should go through HMRC’s internal complaints procedure. Find information about this via www.hmrc.gov.uk then go to the quick links on the left-hand side and look for Complaints Appeals.
If the desired result is still not achieved, providing of course the case has some substance, there is an independent adjudicator who can be found at The Adjudicator’s Office, 8th Floor, Euston Tower, 286 Euston Road, London NW1 3US (0300 057 1111 or 020 7667 1832; www.adjudicatorsoffice.gov.uk ).
Don’t overlook the help that is available from the Citizens Advice Bureau or, if there is one locally, an HMRC inquiry centre.
Also for pensioners who really are struggling and who have household incomes of less than £17,000 a year, there is TaxHelp for Older People (TOP). Call 0845 601 3321 or 01308 488066 or write to Pineapple Business Park, Salway Ash, Bridport, Dorset DT6 5DB. The website www.taxvol.org.uk is also helpful.
For anyone, regardless of age, who is at the end of their tether after doing what they can to help themselves and who cannot afford to pay a tax adviser or accountant, there is TaxAid, a small but busy Lottery-funded charity. As a guideline, the maximum income of anyone applying for its help would be around £300 a week for a single person. Its helpline is on 0345 120 3779 for calls between 10am and midday on weekdays and its website, www.taxaid.org.uk. again can be helpful not only to those fitting into the charity’s income limits.
Consider carefully before taking up the time of either of these charities as they are, unsurprisingly, very much in demand.
Tips on this subject are also available on www.ageuk.org.uk/money-matters/income-and-tax. Its helpline is on 0800 169 6565. I am told the charity will not ask callers what age they are so it could be a case of being as old as you feel. More practically, grandchildren may, for example, be calling in for their grandparents.
As with any entrenched tax problem, depending on its magnitude, it might be worth employing an accountant. Ask about fees first, though.
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