Owe tax from previous years - help!

[Stevo985]

After some help please guys.

My mom has just got a letter through from HMRC saying she's been fined £600. She's investigated and they've told her she owes tax from 2016 and 2017, £799 per year!

They were sending letters to her old address hence why she hasn't known about it and has now been fined.

She was working at the time so her tax was paid through PAYE but apparently her employer used the wrong code.

 

Is there anything she can do about this? She's retired now so can't afford to pay out £2,200! I guess fair enough if she owes the tax she owes the tax, but it all seems a bit unfair that none of it was her fault and she not only has to pay it all back but has to pay £600 on top of it

[limpid]

Speak to them. The worst thing to do is not speak to them.

[Stevo985]

8 minutes ago, limpid said:

Speak to them. The worst thing to do is not speak to them.

She has done. All the letter said was she owed a £600 fine.

She spoke to them and all they told her was it was from 2016 and 2017 and it was £799 per year and she has to pay it all back and the fine or she'll be fined again.

I've told her to speak to TaxAid who are a charity who give free tax advice to those on low incomes so hopefully they can help. But wanted to try the oracle that is VT Off Topic as well

[Rodders]

When I had to pay back about £900 in tax ( I was working two jobs and hadn't sorted it properly so my fault ) they let me repay it over 3 years, so at the very least that should be any option if you can't get it cancelled.

[Wainy316]

If the employer had her on the wrong tax code then shouldn't HMRC have sent them an updated one to reclaim the underpayment amount?  If so, wouldn't it be the employers fault for not applying it?

[stuart_75]

Must be able to setup a repayment plan with HMRC

[Stevo985]

19 minutes ago, Wainy316 said:

If the employer had her on the wrong tax code then shouldn't HMRC have sent them an updated one to reclaim the underpayment amount?  If so, wouldn't it be the employers fault for not applying it?

That's what I thought but it might be because she retired shortly afterwards that they weren't able to change the code to recover it

[Designer1]

48 minutes ago, Rodders said:

When I had to pay back about £900 in tax ( I was working two jobs and hadn't sorted it properly so my fault ) they let me repay it over 3 years, so at the very least that should be any option if you can't get it cancelled.

Had a similar thing about ten years ago when I was struggling to pay one of my self employment tax bills (completely my own fault as I hadn't put enough aside) and they offered me the option to pay back over a number of months.

Luckily enough the bank of Mom and Dad sorted it for me but the option was definitely offered .

[Genie]

About 10 years ago when I was self employed / contractor HMRC told the accountant I’d overpaid tax by £2k at my previous PAYE job and asked if I wanted it back… yes of course.

Then about a month later they said it was right after all and they wanted it returned. I was unemployed at the time (2008/9 crash) so I said no and agreed to return it via tax code instead.

Basically HMRC hadn’t realised initially the tax paid was for a company car.

Edited September 14, 2021 by Genie

[tonyh29]

she could try calling Payment Support Service (PSS) 0300 200 3835 , rather than HMRC , they might work out a payment plan with her 

(check that number though as i think that could be a 10p a minute rate ) 

 

 

2 hours ago, Wainy316 said:

 If so, wouldn't it be the employers fault for not applying it?

the answer to that is no  , the tax code is the responsibility of the employee not the employer even though they are the ones that apply it ( daft as that sounds) 

[Mandy Lifeboats]

@Stevo985

First things first, is this a scam? Ignore any emails, websites or phone numbers on the letter.  Contact HMRC and check if they issued the letter. 

 

[Xela]

Or create a Government Gateway account for her. Can view all manner of HMRC stuff in there from memory (been a while since I logged into mine)

[ferguson1]

5 hours ago, Stevo985 said:

After some help please guys.

My mom has just got a letter through from HMRC saying she's been fined £600. She's investigated and they've told her she owes tax from 2016 and 2017, £799 per year!

They were sending letters to her old address hence why she hasn't known about it and has now been fined.

She was working at the time so her tax was paid through PAYE but apparently her employer used the wrong code.

 

Is there anything she can do about this? She's retired now so can't afford to pay out £2,200! I guess fair enough if she owes the tax she owes the tax, but it all seems a bit unfair that none of it was her fault and she not only has to pay it all back but has to pay £600 on top of it

Hi Steve, has your mom or better still yourself thought about writing/emailing her local MP? The relevant MP is obligated to assist their constituents when help is requested. 

MP correspondence takes priority, usually a quite stringent deadline is set to reply (30 working days or less?).  Depending on how the error occurred and length of time passed, it may get written off (best case scenario) or at least a reasonable repayment plan agreed (worst case scenario). The fact that your mom is retired and depending on her age/health, the MP can stress how this matter is now affecting her mentally and physically. 

The MP is much better at fighting these things and can even involve the Parliamentary Ombudsman is they’re not satisfied with how your case is handled. Personally, I would go down this route as the MP can insist the case is put on hold (no more fines etc) until the case is fully investigated. 

Hope it gets sorted quickly and you get a positive outcome .  

Edited September 14, 2021 by ferguson1

[Rugeley Villa]

She’ll obviously have to pay the tax but it can be spread over X amount of years. It sounds like the fine is unfair but was there any reason she could have let HMRC know she had changed address? If not then maybe challenge the fine. When I move I always change my address with HMRC just in case I get any letters that are important .

[Stevo985]

5 hours ago, Mandy Lifeboats said:

@Stevo985

First things first, is this a scam? Ignore any emails, websites or phone numbers on the letter.  Contact HMRC and check if they issued the letter. 

 

First thing I asked

I said ignore the number on the letter and call them directly by googling their number. Unfortunately it's legit

4 hours ago, Xela said:

Or create a Government Gateway account for her. Can view all manner of HMRC stuff in there from memory (been a while since I logged into mine)

Been trying that but having issues verifying her identity (long story. Basically my mom unofficially changed her name so half her stuff is in one name and half in the other)

[Stevo985]

3 hours ago, Rugeley Villa said:

She’ll obviously have to pay the tax but it can be spread over X amount of years. It sounds like the fine is unfair but was there any reason she could have let HMRC know she had changed address? If not then maybe challenge the fine. When I move I always change my address with HMRC just in case I get any letters that are important .

I'm not sure to be honest. She set up a forwarding address for 12 months but nothing came through

[Genie]

1 minute ago, Stevo985 said:

I'm not sure to be honest. She set up a forwarding address for 12 months but nothing came through

I wonder how she’d get on if she asked for proof they sent them out the letters?

[Genie]

Citizens advice another worthy place to put a call in and ask for err, advice

https://www.citizensadvice.org.uk

[rjw63]

She should be able to repay any outstanding sum over a decent period.

Some years ago I used to get working tax credit, and I didn;t realise when I should stop claiming it.

Unusually HMRC didn't either. When they found out they said I owed about £3500 back to them.

I paid it back at £50 per month. Took me over seven years!

[Mandy Lifeboats]

Now it’s been confirmed as legit there are 3 points that have already been raised in other posts that are (in my opinion) excellent pieces of advice /information.

1.  Query the matter via her local MP.  It will be quicker and easier. As @ferguson1rightly say, an MP enquiry goes to the front of the queue and is looked at by experienced staff. 

2.  It doesn’t matter whose fault it is.  HMRC will hold the tax payer responsible.  There’s not much you can do.  

3.  Any repayments must be at an affordable rate.  No sensible offer will be refused.  
 

There is only 3 more  things I would add. 

Ask the MP to obtain a simple timeline of events that led to the problem.  For instance “April 2019:  the Tax Code used by the employer was……” Stress to the MP  that this needs to be in plain English.  

Ask the MP to obtain the calculation used to raise the debt.  Again, ask for it in plain English. 

MPs do not deal with these matters.  It’s going to be a researcher/aide/secretary at the MPs office.  They spend most of their day dealing with angry and insulting constituents.   Give the MPs office a call and make an effort to be really friendly.  I deal with various MPs offices and the staff are (on the whole) just normal people doing a difficult job.  Get on good terms with the staff and you will have a powerful ally who can help sort this out.