Tax Chat

Here we go again!

Tax Chat – Monday 31 October

Approximately 6 million people are set to receive repayments from HMRC.  The repayments relate to the tax year 2007/08 and individuals affected should hear from HMRC by December 2012.

However, nearly 1.2 million people will also receive letters from HMRC informing them they have underpaid tax for 2010/11.   Underpayments on average will be between £500 and £600 pounds.

If you receive notice of an under or over payment please make sure that you check it carefully to ensure that HMRC are correct.  As we are sure you will appreciate HMRC are not always correct.

Also remember that HMRC do have to observe certain time limits – if you provided them with all of the information to get your tax position correct, they should have used this information within 12 months of the end of the tax year in which it was received.  If this time limit was not observed then HMRC may be out of time.

For instance, if your tax demand relates to benefits in king for the tax year 2007/08 and your P11d form for 2007/08 was submitted during 2008/09.  HMRC have until 5 April 2010 to use this information.  If they are issuing tax demands using this information now, then you may be able to appeal against the tax demand raised.

If the under payment is correct then you will be pleased to hear that you will have the option of spreading what is  owed over a period of time, by having the under payment included in your PAYE tax code.  This enables you to pay the tax you owe on a monthly basis interest free.

We understand that the notices that have been issued to date do not include this option as a matter of course and so it will be necessary to call HMRC to get your tax code amended.